Coin360 Daily Dispatch | Crypto Market Updates & Highlights | January 3, 2024

Bitcoin's Sharp Drop on Genesis Day

Bitcoin experienced a significant drop on its 15th genesis day, plummeting from an intraday high of $45,600 to as low as $40,700 before recovering to around $43,000. This sharp decline erased most of its 30-day gains. The crypto market witnessed a flash crash, with $100B wiped from its market cap in just three hours, bringing the total to $1.72T. 

Over $500 million in crypto trades were liquidated in this period, with speculation about insider knowledge of the crash. Matrixport's report, suggesting the SEC's likely rejection of Bitcoin spot ETF applications, is believed to have influenced the market. 

However, some analysts argue that the crash was part of standard Bitcoin bull market behavior rather than solely due to the ETF news. Despite Matrixport's bearish outlook on ETF prospects, they remain confident about other crypto operations in 2024. Meanwhile, Bitcoin has outperformed Ethereum for four successive quarters, reflecting its dominant market cap growth.

Matrixport's Bearish ETF Outlook vs. Bitcoin's Performance

Matrixport analyst Markus Thielen predicts the SEC will reject all Bitcoin spot ETF proposals in January, citing political dynamics and compliance concerns. Despite potential short-term volatility, Thielen remains bullish for 2024. 

Meanwhile, Bloomberg analysts Eric Balchunas and James Seyffart express confidence in ETF approval, questioning the source of rejection reports. The SEC is reportedly finalizing comments on Spot Bitcoin ETFs with stock exchanges, with potential approval imminent. CBOE anticipates that approving Spot Bitcoin ETFs will attract institutional investors, boosting investments. 

BlackRock plans to acquire $10 million worth of BTC as initial funding for its potential spot Bitcoin ETF, signaling a significant move in the crypto market.

Changes in Ethereum's Supply Since The Merge

Ether's supply increased by 3,051 coins since a post-merge low on Dec. 30, with 54,000 ETH added in Sep. and Oct. but 86,825.5 ETH removed from Nov. to Dec. 30. Since The Merge, 337,333 ETH has been removed. The burn rate post-merge is 2.5 times less than pre-merge, with gas fees dropping and Layer 2 adoption increasing.  

Arbitrum's Dominance in Ethereum Layer 2 TVL

Arbitrum One, an Ethereum Layer 2 network, surpassed $10.22 billion in Total Value Locked (TVL), leading the sector with 48.03% of Ethereum Layer 2 TVL. It offers low transaction costs, attracting 470+ dApps, and holds a diverse asset portfolio. The ARB token surged 17.3% to its new all-time high over $2 and serves as a governance token, empowering user engagement.  

Tech Transformation at Square Enix

Square Enix is restructuring to prioritize AI, blockchain, and Web3. President Takashi Kiryu aims to aggressively apply AI and cutting-edge tech to content development. The company intends to embrace generative AI such as ChatGPT and integrate blockchain and Web3 in its products, evident in the launch of the "Symbiogenesis" NFT-based project.  

2024 Crypto Market Predictions by The Block Research

In 2024, crypto experts at The Block Research predict rising prices, a Bitcoin ETF approval, and a bullish market. Expectations include the dominance of Ethereum, strong performances by Coinbase and AI-related projects, and increased adoption of Ethereum-based rollups. Major narratives revolve around decentralized infrastructure for AI, scaling solutions, DeFi innovation, and stablecoin market dynamics.  

IRS Rule 6050I Tightens Crypto Transaction Reporting

New IRS rule 6050I obliges U.S. businesses to report crypto transactions exceeding $10,000 within 15 days or risk felony charges. Recipients must disclose counterparties' details. Challenges persist in reporting block rewards and decentralized exchange transactions. U.S. Treasury Department targets crypto, sanctioning North Korean criminal entities, while Senator Warren pushes for stringent KYC regulations on web3 users.  

USDC Stablecoin's Temporary Depegging Incident

USDC stablecoin briefly depegged to $0.74 on Binance due to a market sell-off related to Bitcoin ETF uncertainty. Despite three temporary drops, USDC quickly rebounded to $1. The USDC/USDT pair on Binance displayed a skewed market depth and $6.2 million followed by $4.3 million in volume at 12:10 and 12:21 UTC, respectively.  

Flash Loan Attack Impacts Radiant Capital

Radiant Capital paused its lending and borrowing markets on Arbitrum after a reported $4.5M flash loan attack. The incident exploited a known rounding issue in the codebase, resulting in a $4.5M Ether siphon. The protocol reassured investors that no additional funds are at risk and promised a detailed postmortem. Radiant Capital currently has around $315M in total value locked.  

Etherscan Acquires Solscan to Broaden Scope

Etherscan acquires Solscan, expanding beyond EVM to Solana. Solscan offers detailed address, token, and transaction information for the Solana network. The acquisition aims to enhance exploration and analysis capabilities across both platforms, elevating user experience. Solana's value surged significantly since Sept. 2023, reflecting a resurgence in the Solana ecosystem.   

ENS Token's Significant Rise Post-Buterin Endorsement

ENS token surged over 50% after Vitalik Buterin endorsed it as "super important." It reached its highest level since April at $12.54 with a 600% increase in volume. ENS aims to improve the user experience in DeFi by integrating with layer-2 blockchains. Currently, there are 2.1 million registered ENS domains with 800,000 unique participants.

RNDR Token's Price Fluctuation and Migration

The Render Foundation covers gas fees for RNDR to RENDER token migration until January 31, 2024, incentivizing holders with 1.14 million RENDER. RNDR's price rallied by 32% in the last month due to Solana network migration but declined by 6% in the last week. Metrics like CMF, MACD, and Aroon indicator confirm a decline in bullish momentum.  

Wemade Faces Tax Challenges with WEMIX Tokens

Wemade, a Korean gaming firm, owes $41M in unpaid taxes for WEMIX tokens issued from 2019 to 2022. The tax debt amounts to approximately 10% of the company's equity, with a penalty of up to $38M imposed by local authorities. WEMIX tokens, launched in 2020, have seen a 635% return and currently trade at $2.64 with a diluted market cap of $2.5B.  

CoinDCX Clarifies Recent Fraud Allegations

CoinDCX clarifies recent fraud allegations, attributing them to a fake website scam, and affirming no security breach occurred on its platform. It emphasizes user education and collaboration with law enforcement to combat such scams. The company's proactive approach, including reporting suspicious activities, underscores its commitment to user safety and platform security.  

2023's Surge in Cryptocurrency Investment Inflows

In 2023, cryptocurrency investment products saw total inflows of $2.2 billion, with Bitcoin accounting for 86% of the inflows. Solana and Multi-Asset followed with $167 million and $320 million in inflows, respectively. This marked a significant increase from 2022. The market saw a shift from outflows to inflows during the year.  

Jupiter and Dymension Plan Major Token Airdrops

Jupiter, a decentralized trading aggregator on Solana, plans a JUP token airdrop by late January. This event, involving nearly 1 million Solana wallets, will distribute 40% of JUP's total supply. It's seen as a stress test for both Jupiter's trading infrastructure and the Solana network. 

Meanwhile, Dymension, a layer-1 blockchain built on Cosmos, announced a "genesis rolldrop" of DYM tokens, targeting over a million crypto users across various chains. This airdrop, excluding U.S. residents, offers 70 million DYM tokens (7% of the total supply) until January 21. Eligible participants include those who staked TIA tokens, users of Ethereum layer-2 networks, Cosmos Hub, Stride, and Osmosis DEX users, as well as over 500,000 Solana users. Additionally, owners of specific NFTs on Ethereum, Solana, and Cosmos-based Stargaze chain can claim DYM tokens.

Top Altcoin Gainers and Losers

Gainers:

Arbitrum ARB (+17.13%)

Lido DAO Token LDO (+12.66%)

Maker MKR (+10.67%)

Losers:

Terra Classic LUNC (-14.92%)

Conflux CFX (-14.84%)

Bonk BONK (-14.38%)