Coin360 Daily Dispatch | Crypto Market Updates & Highlights | December 18, 2023

Bitcoin's Cooling Rally and Rising Fees

Bitcoin's value dipped to slightly over $41,000, signaling a cooling rally, with rising transaction fees due to Bitcoin Ordinals' popularity causing network congestion. The Coinbase Premium Index indicates decreasing bullish sentiment among professional traders. Trading volume has significantly dropped as the holiday season nears, with a 60% decrease last week and a decline in Bitcoin inflows to exchanges. Bitcoin transaction fees hit a record high of approximately $24 million on Dec. 17, 2023.

Ethereum Whales' Diverse Strategies and Market Movements

Ethereum whales have made contrasting moves; some accumulated 100,000 ETH to support its price, while another sold off holdings after a year's dormancy. Concurrently, Bitcoin's transaction fees exceeded Ethereum's for a 3rd consecutive day, driven by unique BTC inscriptions hype. Solana DEXs’ trading volume briefly outpaced Ethereum's due to a surge in memecoin and stablecoin trading. Galaxy Digital also transferred $24.3 million worth of ETH to Binance. 

MATIC's Price Dip Amid Market Challenges

Polygon's native token MATIC experienced a 8% price decline, trading at $0.780306. Large whale transactions, a significant drop in holders profiting, and concerning on-chain metrics contributed to the downturn. Two substantial MATIC transactions, totaling 17,299,458 tokens, were unloaded on Binance, sparking investor anxiety. Technical analysis indicates a potential breakout opportunity within a symmetrical triangle pattern, suggesting a bullish scenario if MATIC can sustain a price range from $0.55 to $1.  

Crypto Funds' Inflow Streak Ends with Significant Outflows

The market has seen the end of an 11-week inflow streak for crypto funds, with net outflows of $16 million. Bitcoin-based funds experienced the most significant outflows, amounting to $32.8 million. Despite this, trading activity remained high. The outflows coincided with a drop in Bitcoin's price and were attributed mainly to profit-taking in the U.S. and German markets. 

In contrast, Switzerland and Canada saw inflows. Ether and Avalanche also witnessed outflows, while Solana, Cardano, XRP, and Chainlink-based funds saw inflows. Additionally, blockchain equities reported positive sentiment, with inflows of $122 million.

Avalanche's Fee Surge and Token Burn Spike

Over the past week, Avalanche users have experienced significant financial activity. Users paid $13.8 million in fees for inscriptions in just five days. Simultaneously, a striking $16.7 million worth of AVAX, the network's native token, was burned, marking a tenfold increase from the previous week. 

This surge in burned fees is largely attributed to the rising popularity of inscription-based transactions, which constitute 75% of the transaction fees on Avalanche. This activity has led to the highest level of AVAX burning observed to date, reflecting a dynamic shift in network usage and economic activity.

Voi Blockchain: Algorand's New Community-Centric Project

Voi is a new blockchain based on Algorand's technology, aimed at aligning incentives with its community. Led by Chris Swenor, it designates 75% of its market cap for ecosystem growth and targets a smaller application vertical. Original Algorand investors support Voi, perceiving it as complementary to Algorand. It aims to connect back to Algorand's mainnet for asset exchange.  

Aurory Gaming's Liquidity Crisis Post-Hack

Aurory gaming on Solana suffered an 80% liquidity loss in the AURY-USDC pool due to a SyncSpace bridge hack. Approximately 600k $AURY tokens were withdrawn to Arbitrum and sold. The team quickly disabled SyncSpace, stabilized the market by repurchasing tokens, and promised a security analysis. AURY token value dropped by 17% but later recovered.  

Crypto-Based Loans Rebound Despite Market Fluctuations

In 2023, crypto-based loans rebounded by over 55%, reaching $581 million, yet still below the 2022 peak of $1.5 billion. Blockchain protocols charge less than 10% for loans, contrasting with double-digit rates by traditional providers. The increased transparency and liquidation mechanisms on-chain have reduced lending risks, leading to lower borrowing rates.  

Arweave's AR Token Drops Amid Hard Fork Debate

Arweave's AR token faced a 13.06% drop to $8.9 at one point, amidst a hard fork debate. Founder Sam Williams accused Irys of planning an unethical fork for greed. Arweave urged Irys users to migrate, alleging censorship. In response, Irys defended its commitment to user choice and data accessibility, while emphasizing its development of new features.  

Coinbase's Commodity Classification Request Denied by SEC

The largest US crypto exchange, Coinbase, had its petition to treat certain crypto assets as commodities rejected by the SEC. SEC Chair Gary Gensler cited existing laws' applicability to crypto markets, timing concerns, and the Commission's discretion. Coinbase's Chief Legal Officer challenged the decision in court. Regulatory uncertainty affects crypto firms operating in the US. 

FTX's Bankruptcy Exit Plan and Controversy

FTX has filed a reorganization plan to exit bankruptcy, aiming to restructure and potentially resume operations. Meanwhile, crypto influencer Martin Folb raised concerns about the published liquidation data of FTX's assets, questioning its accuracy. 

He criticized the liquidation process, suggesting it might be one of the "most idiotic financial exercises in history." Folb also accused SEC Chairman Gary Gensler of protecting certain individuals or groups, urging SEC Commissioner Hester Peirce to disclose more details about the liquidation.

Solana Saga Phone's Price Surge Fueled by BONK Token

The Solana Saga phone experienced a significant price surge on eBay, with some units selling for as much as $5,000, largely due to the growing hype around the BONK meme token. The sealed and unopened phone boxes, which contain an airdrop of 30 million BONK tokens, have revived the previously dismal sales of the Saga phone. 

This surge coincided with the BONK token's rapid popularity in the blockchain community, where it saw a 110% increase in a single day and over 700% in 30 days. Initially priced at $1,000, the price of the Saga phone was reduced to $599 earlier this year. Despite earlier uncertainties about its future, the phone has now sold out in the U.S. and the European Union.

Tether's USDT Faces Discount Amid Market Growth

Tether's USDT stablecoin shows a discount on major exchanges, trading at $0.99911. Its rapid growth led to a $90 billion market capitalization, surpassing rivals. The stablecoin issuer's cooperation with U.S. authorities involved freezing $435 million to combat illicit use. This move drew criticism, with some comparing Tether to a Central Bank Digital Currency (CBDC).  

MetisDAO Launches $100 Million Ecosystem Development Fund

MetisDAO creates a $100 million Ecosystem Development Fund (Metis EDF) with 4.6 million METIS tokens for decentralized sequencer mining, project deployment, and more. Funds to be distributed in Q1 2024, incentivizing NFTs, DeFi, smart contracts, and blockchain security in the Metis ecosystem. The fund will transition to a community-managed entity.  

Helium's MOBILE Token Skyrockets Amid Market Volatility

Helium's MOBILE token surged over 60% in a day, accompanied by a 821% increase over the week. HNT rose by 2.4% before dropping, and IOT increased by 11%. Helium Mobile offered a low-cost smartphone plan and has gained 12,500 subscribers. Solana Saga smartphones, including BONK airdrops, sold out. Solana and BONK declined amid the wider market.  

Solana Trader's Massive Profit from Meme Coin Investment

A trader profited nearly $1.5M from a $226,000 investment in the Solana meme coin WIF. Despite a portfolio dip to $1.1M, they hold their highly volatile assets. In the Solana ecosystem, meme coins like Bonk surged, and another trader made over $1M trading Helium Mobile. Caution is advised due to extreme volatility.  

Cardano Rejects XRP Partnership Amid Community Hostility

Cardano's founder, Charles Hoskinson, rejects an XRP partnership due to ongoing community hostility and perceived lack of technical alignment. The historical dispute between Cardano and XRP has been marked by public disagreements, personal attacks, and dismissals of collaboration prospects. The incompatibility of visions and ongoing feud further compounds the uncertainty of any potential reconciliation.  

Circle's EURC Stablecoin Launches on Solana

Circle deployed EURC, a euro-backed stablecoin, on the Solana blockchain to enhance foreign exchange transactions and remittances. EURC is now supported by Solana-based DeFi apps and digital wallets. It aims to be a regulated e-money token under EU's upcoming digital asset regulations, MiCA. EURC's market cap is currently at approximately $55 million.  

Top Altcoin Gainers and Losers

Gainers:

Stacks STX (+11.66%)

Injective INJ (+9.55%)

WOO Network WOO (+5.36%)

Losers:

Bonk BONK (-14.80%)

Internet Computer ICP (-12.91%)

Celestia TIA (-12.63%)