Coin360 Daily Dispatch | Crypto Market Updates & Highlights | February 7, 2024

Bitcoin's Rebound: Volatility, Liquidity, and Future Moves

Bitcoin's recent rebound above $43,000, despite macroeconomic concerns and volatile price action, resulted in over $66 million in leveraged position liquidations. Analysts highlight the upcoming halving and potential Federal Reserve rate cuts, yet caution that macro conditions could dampen the halving's impact. 

Meanwhile, volatility data suggests a significant BTC price move is imminent, with the market bracing for a potential correction as the anticipated rate cut delay by the Fed is not yet factored in. Despite this, Bitcoin's price has remained relatively stable, with predictions suggesting it may stay flat until summer. This stability comes amid shifting market expectations following hawkish signals from the Fed, challenging earlier predictions of imminent rate cuts.

Ethereum's Path: Dencun Upgrade and ETF Delays

Ethereum's Dencun upgrade, on its final testnet phase, introduces "proto-danksharding" to reduce transaction costs and enhance data availability, signaling a mainnet launch soon. Meanwhile, the SEC delays the decision on an Ethereum ETF by Invesco and Galaxy, seeking public input on Coinbase's surveillance integration, hinting at further postponements. 

Dymension's Market Debut: Highs and Lows

Dymension's launch was a rollercoaster, hitting a $5.2 billion valuation despite early hiccups like transaction errors and consensus issues, mainly due to Chorus One's node troubles. Despite these challenges, DYM's airdrop to Solana, Ethereum, and Celestia users totaled $390 million, showcasing its ambitious rollup platform. 

However, the spotlight also fell on "Big Brain Staking," which quickly amassed over 35% of staked DYM, raising concerns over network influence and decentralization. Trading volumes soared to $511 million on its first day, with the token price jumping 58%. Yet, the concentration of power with one validator and the initial technical difficulties underscore the teething problems of launching a complex blockchain project.

MicroStrategy's Continued Bitcoin Accumulation

In Q4 2023, MicroStrategy acquired 31,755 BTC for $1.25 billion, bringing its total holdings to 190,000 BTC at a cost of $5.93 billion. The current market value of its Bitcoin holdings is approximately $8 billion. The firm's Q4 total revenues were $124.5 million, down 6% year-over-year, with MSTR stock up 1.51%.  

Crypto Investors Bounce Back: From Losses to Gains in 2023

In 2023, crypto investors saw a significant improvement, averaging $887 in realized gains, a contrast to 2022's $7,102 losses. CoinLedger's data from 500,000 users indicates a market resurgence. Ether sales led 2022's losses. Bitcoin holders showed more retention. The U.S. dominated user base, but international data was also included.  

BlackRock and Fidelity Lead in Bitcoin ETF Inflows

Seventeen days post-launch, BlackRock's iShares Bitcoin Trust (IBIT) ranked as the fifth top ETF of 2024, with $3.2 billion in inflows, trailing only behind giants like iShares and Vanguard's S&P 500 and total stock market funds. Fidelity's Wise Origin Bitcoin Fund (FBTC) also made the top 10, with $2.7 billion in inflows. 

Despite these achievements, the overall investment into new spot bitcoin ETFs has seen a slowdown, with IBIT experiencing its smallest net inflow of $45 million recently, marking a cooling off in its growth. Yet, IBIT and FBTC remain the only funds with consistent positive flows since their market debut.

Ripple's Ongoing Battle with the SEC

Ripple requests an extension until Feb. 20 to produce heavy SEC document demands, citing the need for additional time. The company aims to supply contracts related to XRP sales over a three-year period. This request follows a recent court ruling in favor of the SEC, prolonging the ongoing legal battle between the two entities.  

Thailand Boosts Crypto with Tax Waiver

Thailand's Ministry of Finance has waived the 7% value-added tax on cryptocurrency gains, aiming to bolster the country's position as a digital asset hub. The tax exemption became effective on Jan. 1, 2024, with no set expiration date. The move applies to regulated brokers and dealers in the crypto space, attracting global exchanges like Binance.  

Hong Kong Proposes Yuan-Backed Stablecoins

The Hong Kong Chamber of Commerce proposed issuing yuan-backed stablecoins and creating a "Virtual Asset Connect Scheme" to promote RMB adoption and facilitate international trade transactions. The Chamber also suggested a daily limit of HKD 20 billion for the scheme. Hong Kong has been exploring stablecoin regulation, considering its potential as an interface between traditional finance and the virtual asset market.  

Dogecoin Faces Network Congestion

Dogecoin's ecosystem is experiencing a surge in wallet growth with over 413,800 new wallets added in two weeks. However, the network is facing congestion issues due to inscriptions clogging the system, leading to exchanges reporting Dogecoin as "jammed/unresponsive." This congestion has spiked transactions to 1.9 million in 24 hours, overshadowing genuine fund transfers. Additionally, a significant transaction saw 100 million DOGE moved to Robinhood, showcasing the network's dynamic nature.  

BlockFi and 3AC Reach Settlement

A sealed settlement resolved the $129 million dispute between crypto lender BlockFi and defunct hedge fund Three Arrows Capital. The settlement—a result of Judge Kaplan's approval—remains undisclosed. BlockFi can now distribute assets to its creditors. 3AC co-founder Su Zhu was arrested in Singapore while attempting to flee and faces a four-month prison sentence for contempt of court.  

Pyth Network's Token Airdrop

Pyth Network's second phase retrospective token airdrop allocates 100 million PYTH tokens, worth about $47 million, to 167 eligible dapps. Phase one involved distributing around 255 million PYTH tokens to over 90,000 wallets. The airdrop aims to boost on-chain governance and transition Pyth Network towards a decentralized mainnet. PYTH token has gained over 45% since its launch.  

Friendzone's Social Platform on Polygon

Friendzone is a social platform set to launch on the Polygon PoS blockchain on Feb. 26. Co-founded by early members from Band Protocol, Synthetix, and Koinly, it aims to enhance social connections and enable developers to create new apps utilizing its social data. The platform saw a 600% user surge from December to January and 10,000 completed user quests in January alone.  

OKX's Dual Front: Regulatory Scrutiny in South Korea and Expansion into Argentina

OKX is facing scrutiny in South Korea for allegedly promoting its Jumpstart program without proper registration, potentially leading to a probe by the Financial Intelligence Unit. Simultaneously, OKX has expanded globally by launching exchange services and a crypto wallet in Argentina, providing non-custodial web3 wallet services and a peer-to-peer trading platform with local payment options and Spanish-language support, marking a strategic move into Latin America.  

Crypto Dominates Canada's Fintech Scene

In 2023, the crypto and blockchain sector dominated fintech investments in Canada with 31 deals, surpassing other verticals. Investor interest was partly driven by the anticipation of a US Bitcoin ETF. A significant investment went to a blockchain infrastructure firm, signaling growing interest in the technology.

Ondo Finance Expands to Sui Blockchain

Ondo Finance's USDY stablecoin, backed by the US Treasury, is expanding to Sui's Layer 1 blockchain, marking the first dollar-denominated token on Sui. Ondo's COO, Justin Schmidt, believes yield-bearing stablecoins may overtake the market for regular stablecoins. Sui's high performance aligns with Ondo's need for fast and efficient transactions, making it an ideal fit.  

Ransomware's Billion-Dollar Crypto Impact

In 2023, ransomware attacks led to over $1 billion in cryptocurrency payments, targeting high-profile institutions and infrastructure. Chainalysis reported 538 new ransomware variants, showcasing a variety of criminal strategies. CL0P and Phobos were notable groups, with CL0P exploiting the file transfer software MOVEit and accumulating over $100 million in ransom payments. Criminals utilized various methods to launder the stolen cryptocurrency funds.  

CleanSpark Expands Bitcoin Mining Operations

CleanSpark announces acquiring four Bitcoin mining facilities, expanding into Mississippi and Georgia. The acquisition involves a $19.8 million cash deal, with the Mississippi facilities expected to have a combined hashrate of 2.4 EH/s. CleanSpark aims for 20 EH/s with the acquisitions and anticipates a total hashrate of 50 EH/s with new mining machines.  

Surge in Trump-Related Tokens

Several Trump-related tokens have seen a 100% surge in value at one point within 24 hours. Mechanism Capital invested in these assets, particularly the TRUMP memecoin. The TRUMP token's market cap exceeds $100 million, with a trading volume of $6.05 million in the past 24 hours. Nonetheless, risks include the potential for Trump to divest his holdings, similar to other meme coins.  

VanEck Investigates Solana's Outage

VanEck's post-mortem on Solana's outage suggests a critical bug was overlooked and raises the possibility of intentional network disruption. Researcher Matthew Sigel unveiled the oversight in deploying a protocol upgrade, potentially indicating foul play. Solana is investigating the incident and plans to release a public report on the outage's root cause.  

Top Altcoin Gainers and Losers

Gainers:

Dymension DYM (+33.90%) 

Monero XMR (+13.94%) 

Kaspa KAS (+13.36%) 

Losers:

Frax Share FXS (-7.47%) 

Ethereum Name Service ENS (-7.41%) 

Ronin RON (-4.84%)