Coin360 Daily Dispatch | Crypto Market Updates & Highlights | December 25, 2023

Japan's Crypto Tax Reform

Japan plans to revise its tax system for corporate cryptocurrency holdings, deferring taxes on unrealized gains until assets are sold, aiming for implementation in April 2024 pending legislative approval. The proposed reform aims to facilitate Web3-related ventures. There's a notable rise in cryptocurrency-related tax violations, although undeclared holdings' average value decreased.  

Opposition to Digital Asset Anti-Money Laundering Act

The "Stop The Crypto Ban" petition opposes the Digital Asset Anti-Money Laundering Act supported by 19 senators, including Elizabeth Warren. It emphasizes concerns about stifled innovation, job losses, and privacy infringements. The petition has garnered nearly 10,000 signatures, urging senators to reconsider their support and consider the long-term implications on innovation and economic growth.

BlackRock's Bitcoin ETF Ambitions

BlackRock is seeding a Bitcoin ETF with $10M, aiming for a January approval, though immediate SEC approval is not guaranteed. The SEC has set a December 29 deadline for final amendments to S-1 filings by spot Bitcoin ETF applicants, crucial for early January approvals. 

Former BitMEX CEO Arthur Hayes warns that ETF success, especially if cash-settled, might harm Bitcoin's value, favoring physical-settled ETFs. Meanwhile, industry leaders see Hong Kong as a potential hub for Bitcoin ETFs, with its crypto-friendly policies and positive regulatory environment, distinct from mainland China's strict approach.

Solana's Network Activity and Price Rally

Solana has recently set records in the number of new and active addresses, showing a marked increase in network activity and user engagement. This trend coincides with a notable price rally for Solana's cryptocurrency, SOL. 

Concurrently, there's speculation about a potential downturn, highlighted by a significant transaction where $23 million in SOL was moved to the Binance exchange, possibly indicating a sell-off. This event, combined with certain market indicators, suggests that Solana's price rally might be approaching its end.

Bitcoin's Market Performance

Bitcoin's price fluctuated, notably dipping below $43,000 before recovering but remaining attractive for investment. It experienced a 160% rise, outperforming other assets alongside Nvidia stock. Bitcoin's network growth and miner profitability surged, with macroeconomic factors influencing its trajectory. Remarkably, about 70,000 new Bitcoin millionaires were created, underscoring its significant value appreciation.

Ethereum's Market Correction

Ethereum's price is experiencing a correction from the $2,350 resistance, trading near $2,275. Since the Merge, about 339,121 ETH coins have left circulation, with deflation accelerating recently. The number of active ETH validators increased by 58% post-Shapella, boosting staking activity. 

However, this surge poses challenges, potentially degrading network performance. ETH's price has underperformed compared to other major cryptocurrencies like BTC and SOL, increasing only by 90% this year. It broke out above a 550-day resistance in December, suggesting a potential rally.

DeFi Projects' New Ranking Metrics

In 2023, alternative metrics such as revenue are proposed to rank DeFi projects, overshadowing Total Value Locked (TVL). MakerDAO leads with $95.91 million in revenue, leveraging US Treasury bonds. Lido, PancakeSwap, Convex Finance, and GMX follow, with revenue figures ranging from $37.52 to $55.79 million, reflecting their unique DeFi offerings.  

Crypto Investment Products' Inflows

Last week, crypto investment products received $103 million in inflows, bringing the year-to-date total to almost $2 billion. Bitcoin products saw the most inflows at $87.6 million, with anticipation for a spot Bitcoin ETF driving this trend. Additionally, Ethereum, Solana, and Cardano also experienced considerable inflows, while Short Bitcoin products saw $400,000 in inflows.  

ZachXBT's Social Media Exit Impact

ZachXBT's temporary exit from social media caused a surge in unauthorized memecoins, despite his explicit disavowal of any such tokens. The crypto community reacted strongly, praising his contributions. Over 180 memecoins were created across multiple blockchains, capitalizing on ZachXBT's popularity, with one memecoin on Solana experiencing a 13,000% surge in value.  

Curve Finance's Exploit and Response

In July, Curve Finance suffered a $73.5 million exploit, resulting in a $42 million reimbursement to affected users and a $94 million loss. The community voted to refund stolen funds and compensate for missed CRV emissions. The incident also underscored the need for enhanced security measures to prevent future attacks.  

Litecoin's Network Activity vs. Price Growth

Litecoin (LTC) experienced a significant surge in network activity, marked by a drastic increase in new addresses and daily active addresses. However, this positive momentum failed to translate into price growth, as market indicators turned bearish. Factors such as low liquidations and stagnant price volatility led to a slowdown in LTC's growth.    

Polygon's Challenges and Comeback Plans

In 2023, Polygon faced challenges, with layoffs at Polygon Labs and MATIC struggles. Co-founder Sandeep Nailwal sees it as a time for a comeback. Despite a $250 million cash reserve and 1.9 billion MATIC, market skepticism remains due to burning through $200 million and MATIC's muted performance, trading just above $0.86.  

MEXC Exchange Addresses Rumors

MEXC Crypto Exchange addressed concerns about the deletion of an account labeled as their CEO's amid withdrawal issues. They emphasized that the account was not officially related to their CEO and urged calm among users. Additionally, they rejected claims of freezing user assets as baseless, stressing their commitment to operational integrity and customer asset security.

Binance's Market Share Decline

According to a Kaiko report, Binance's spot volume market share fell 18% to 43.8% amid increased regulatory actions by the CFTC and SEC due to customer migration accusations and wash trading. Binance's market share dropped from 62.3% to 43.8%, while other centralized exchanges grew from 37.7% to 56.2%. Moreover, Binance faces legal scrutiny and its former CEO pleads guilty to money laundering violations.  

Bitfinex's Crypto Market Outlook for 2024

As per Bitfinex, in 2024, the crypto market is poised for significant growth with an expected market cap of $1.6T to $3.2T and global owners projected to reach 850-950M. Bitcoin's bull run, fear and greed index, upcoming halving, and increasing institutional investments are critical metrics. Additionally, global adoption is set to surge with innovative initiatives in various countries.  

Top Altcoin Gainers and Losers

Gainers:

Ordinals ORDI (+36.80%)

Axie Infinity AXS (+20.26%)

Quant QNT (+19.77%)

Losers:

THORChain RUNE (-5.73%)

PancakeSwap CAKE (-4.76%)

WOO Network WOO (-3.30%)