Coin360 Daily Dispatch | Crypto Market Updates & Highlights | January 23, 2024

Bitcoin's Multi-Factorial Price Drop

Bitcoin's fall below $39,000 before a slight recovery is driven by multiple factors. Grayscale's GBTC saw over $640 million in outflows, the largest yet, totaling $3.45 billion. The spot Bitcoin ETFs' approval led to a 'sell the news' event, with GBTC experiencing significant outflows. Short-term holder profits have sharply declined, increasing the risk of further corrections with critical support at $38,000 and $36,000. 

Whale activity, including a $3 billion sell-off, hints at a potential further drop. Despite China's $278 billion market stimulus, Bitcoin remains unaffected, indicating its price movements are more influenced by crypto-specific developments rather than external economic factors.

Mt. Gox's Progress on Repaying Creditors

Mt. Gox, once a leading crypto exchange, is progressing in repaying creditors from its 2014 hack. The trustee is verifying identities for disbursing 142,000 BTC, 143,000 BCH, and 69 billion yen by October 2024. This follows the loss of 850,000 BTC, impacting Bitcoin's supply dynamics amidst market shifts and the upcoming Bitcoin halving. Confirmation emails are being sent to creditors.

FTX's Fallout Impacts Crypto Landscape

FTX's bankruptcy led to a $1 billion liquidation of its Grayscale Bitcoin Trust (GBTC) shares, erasing its stake. GBTC's balance dropped by 12%, losing about $3.5 billion in seven days. Market turbulence intensified with FTX's legal woes and the shift of GBTC outflows partly into USD, impacting the broader crypto landscape. 

Meanwhile, FTX faces increased claim prices ahead of an estimation hearing. Creditors seek "in-kind" cryptocurrency repayments based on token numbers, not market prices. Over $3 million in FTX claims have surged by 80%. 

Celsius's Large-Scale Ethereum Transactions

Celsius, amid bankruptcy, transferred 13,000 ETH to Coinbase and 2,200 ETH to FalconX, and sold over $125 million in Ethereum, holding a $1.3 billion reserve. Concurrently, an Ethereum whale moved $46.02 million in ETH across exchanges and staked with Lido. These actions led to a drop to $2,200 in ETH value and $53.78 million in liquidations, reflecting market volatility.

OKX Token's Dramatic Market Shift

OKX exchange's OKB token experienced a 48% flash crash, leading to a $6.5 billion loss in diluted market capitalization before swiftly recovering. OKX will compensate users for abnormal liquidation losses, with a specific plan to be launched within 72 hours. Crypto markets saw significant swings, partly due to Grayscale Bitcoin Trust's sale of BTC to meet investor redemption demands.  

SEC's Security Breach Affects Crypto ETFs

The U.S. Securities and Exchange Commission (SEC) faced a security breach when a hacker executed a "SIM swap" attack on the agency's cell phone, leading to false tweets about the approval of spot bitcoin ETFs. The SEC had deactivated its multi-factor authentication, and the incident is under investigation by law enforcement and oversight agencies.  

Polymer Labs' Significant Series A Funding

Polymer Labs secures $23M in Series A funding led by Blockchain Capital, Maven 11, and Distributed Global. Notable investors include Coinbase Ventures, Placeholder, and Digital Currency Group. The company aims to address Ethereum interoperability challenges with its layer 2 network utilizing Inter-Blockchain Communication. This funding will advance the development of their Ethereum-based interoperability hub.  

Taurus Gains FINMA Approval for Tokenized Securities

Swiss fintech firm Taurus, backed by Deutsche Bank, has obtained approval from Switzerland's Financial Market Supervisory Authority (FINMA) to offer tokenized securities to retail clients. Taurus' TDX trading marketplace will allow both institutional and retail users to access tokenized assets. The firm has also attracted several new issuers to trade their digital securities on TDX.  

Socket's ETH Recovery Post-Exploit

Socket recovers 1,032 ETH worth $2.3 million after exploit. Bungee bridge protocol exploit led to an estimated $3.3 million in damages. The exploit involved incomplete user input validation, allowing theft via over-approvals. Over $3.3 million was stolen, but Socket's recovery demonstrates potential mitigation. Security improvements in crypto protocols show promise for the future.  

Rising Phishing Attacks in Crypto Projects

Multiple crypto projects including Token Terminal, De.Fi, and WalletConnect have reported phishing attacks. Users are advised to avoid interacting with suspicious emails promising airdrops. The fraudulent emails direct recipients to link their wallets, leading to theft. The attacks seem to have targeted project email domains, raising concerns about potential impact on other projects.  

New macOS Exploit Targets Crypto Wallets

Kaspersky warns of a new macOS exploit targeting Bitcoin and Exodus wallets. The malware uses DNS records to deliver its malicious Python script and replaces authentic wallet applications with infected versions to steal cryptocurrencies. Users are advised to update their operating system, use anti-malware software, and download apps only from official stores.  

TrueUSD's Market Struggles Amidst Volatility

TrueUSD (TUSD) fell further below $1 amidst market volatility, prompting liquidation to USDT. Issues include community mining and low liquidity on Uniswap. Challenges include ownership controversies and supply decline. Meanwhile, FDUSD grew $800M in 2024, reaching $2.65B market cap, benefiting from Binance's support and setbacks of other stablecoins.  

EigenLayer's Innovative Shared Security Model

EigenLayer implements a shared security model, pooling over $1.7 billion in staked ETH to economically protect protocols. It allows ETH stakers to opt into additional slashing risk for securing Ethereum ecosystem services, earning yields. The project closed a $50 million Series A funding round and aims to enable other projects to launch using the shared security mechanism.  

Cosmos Community Rejects Proposal 868

The Cosmos Hub community rejected Proposal 868 to reduce the minimum ATOM inflation rate from 7% to 0% if two-thirds of the supply was bonded. Notable validators like Everstake and Cosmostation opposed the proposal, raising concerns about security implications. Proposal 868 aimed to address inflationary pressures on the ATOM token.  

JPMorgan's Coinbase Outlook for 2024

JPMorgan downgraded Coinbase to neutral, citing potential disappointment in 2024 due to the impact of spot bitcoin ETFs' approval. With Bitcoin's price already under pressure, JPMorgan anticipates a deflation in cryptocurrency enthusiasm, potentially affecting token prices, trading volume, and ancillary revenues for firms like Coinbase. The report notes the approval's impact on the cryptocurrency sector and Coinbase's role in potential Ether ETFs.  

Top Altcoin Gainers and Losers

Gainers:

Sui SUI (+7.45%)

Chiliz CHZ (+7.04%)

Blur BLUR (+6.59%)

Losers:

Ordinals ORDI (-12.66%)

Optimism OP (-9.98%)

OKX OKB (-9.93%)