Coin360 Daily Dispatch | Crypto Market Updates & Highlights | January 4, 2024

Bitcoin's Resilient Recovery Amid Market Fluctuations

Bitcoin's recovery above $44,000, a 4% increase in 24 hours, follows a plunge below $41,000, resulting in over $500 million in liquidated leveraged positions. This uptick aligns with expectations of a spot Bitcoin ETF and the Federal Reserve's minutes.  Today’s stock market decline is attributed to uncertainty from the Fed about potential rate cuts in 2024. 

The December Federal Open Market Committee minutes indicated the possibility of three cuts, but the timing remains uncertain based on economic developments. Fed Funds Futures anticipate six 25 basis point cuts starting in March 2024. However, CryptoQuant warns of price correction risks due to high short-term unrealized profits and a bearish signal in perpetual futures markets. 

Goldman Sachs Influences Bitcoin ETF Landscape

Goldman Sachs is set to play a key role in BlackRock and Grayscale's proposed Bitcoin ETFs. Fidelity Investments has registered its shares as securities on the Cboe BZX Exchange, a step towards launching a spot Bitcoin ETF, though SEC approval is still pending. The crypto community is rife with speculation ahead of the SEC's decision. 

Tuttle Capital proposes six leveraged Bitcoin ETFs. Experts express mixed views on Bitcoin ETF approval chances, with some remaining optimistic despite market volatility and regulatory hurdles. Issuers have addressed key SEC concerns, including adopting a cash model for ETFs and managing hard forks and airdrops.

U.S. Funds Increasing Bitcoin Allocation Signals Bullishness

In response to growing institutional interest, several U.S. funds are reportedly amending prospectuses to allocate up to 15% of their assets to Bitcoin. This move signifies increasing bullishness among institutional investors and could pressure the SEC to approve spot Bitcoin ETFs. Analysts are closely monitoring institutional investment trends amid potential market implications.  

dYdX's Platform Compromised by Leveraged Attack

In November 2023, dYdX's v3 platform suffered a $9 million loss due to an attack using leveraged positions in YFI-USD, leading to a 215% price spike and a subsequent 30% drop. The attacker, now identified, employed over 100 wallets. dYdX responded with enhanced monitoring and a new v4 chain. Customer funds were safe, and legal actions are being considered.

China's Stance on Cryptocurrency and Blockchain

The Legal Daily, a CCP publication, urged for a crackdown on cryptocurrency as a means of bribery and corruption. Legal scholars emphasized the use of virtual currencies for illegal activities and argued for enhanced legal and regulatory measures. Despite China's ban on cryptocurrencies, the country has embraced blockchain technology and is piloting a digital yuan.  

South Korea's Proposed Crypto Credit Card Ban

South Korea's Financial Services Commission proposed a ban on using credit cards for cryptocurrency purchases to limit trading on foreign exchanges. The amendment aims to address concerns about illegal fund outflows, money laundering, and speculative behavior. Public feedback is being gathered until Feb. 13, with implementation targeted for the first half of 2024.  

Binance Considers Delisting Privacy Coins?

Binance flagged privacy coins including Monero, Zcash, Horizen, and Firo with a "monitoring tag," indicating potential delisting due to higher risk and volatility. Users must take a quiz before trading these tokens. The exchange's decision aligns with regulatory pressures, including extensive monitoring by U.S. regulators, tied to a multi-billion-dollar settlement with Binance.  

Arbitrum's Orbit Platform Innovates with Gas Tokens

Arbitrum's Orbit platform now supports custom gas tokens, enabling Orbit chains to use select ERC-20 tokens for transaction fees. This development allows Orbit chains to create utility for their own tokens and grow their ecosystem. Projects like Xai Gaming, Caldera, and Celestia will leverage this feature. Arbitrum One has about $2.5 billion in total value locked.  

Starknet Community Votes on Mainnet Upgrades

Starknet has initiated a vote on transitioning upgrades to mainnet. The v0.13.0 upgrade enables fee payments in STRK and ether. The community can participate in the vote until Jan. 8. The vote relies on delegates, not token holders, and aims to involve the entire Starknet community in the decision-making process.  

Controversy Surrounds UniSat's Proposed Upgrade

The proposed Ordinals Jubilee upgrade by UniSat for the BRC-20 protocol has sparked controversy, with creator Domo expressing concerns over potential centralization and lack of community testing. UniSat asserts the upgrade will benefit both Ordinals and BRC-20, prioritizing seamless interaction with other protocols. The situation remains contentious and ongoing.  

Tether's Strategic Bitcoin Accumulation

Tether's Bitcoin wallet, possibly holding over $3 billion worth of BTC, has accumulated over 66,465.2 bitcoins amid rising prices. Tether plans to invest in Bitcoin using 15% of its net profits. The firm backs its stablecoins with cash and U.S. Treasury bills, maintaining a different system from traditional banks. Bitcoin's price has recently surpassed $45,000 amid ETF speculation.  

Crypto Investment Products See Tripling Inflows

In 2023, inflows into crypto investment products tripled to $2.2B compared to 2022. Assets under management rose by 129% to $51B, with a focus on bitcoin products accounting for 87% of net inflows. ProShares led as an issuer, with its bitcoin futures ETF attracting $640M in net flows, despite potential competition from spot ETFs.  

Ether's Price Volatility and Market Dynamics

On Jan. 3, Ether's price plummeted as much as 14%, wiping out $100 million in long future contracts. Analysts attribute the flash crash to excessive leverage and overconfidence in the market. However, swift recovery to $2,230 suggests a weakening of the panic selling. Derivatives data also indicates that overconfidence prevailed, but the market's health remains intact.  

Gamma Strategies Hit by Security Breach

Gamma Strategies, a DeFi protocol, suffered a $469,000 exploit involving 211.9 Ether. They confirmed a potential security incident and urged users to withdraw funds. The company is investigating the matter and plans to disclose further details. Additionally, a fake X account aimed to deceive users, emphasizing precautionary measures and official communication channels. 

Huobi Korea Pauses for System Upgrade and Rebranding

Huobi Korea will end local virtual asset trading on Jan 29 due to industry concerns, emphasizing system upgrades and brand renewal. The move aligns with a shift in ownership and a solid proof of reserves at 101%. Customers can withdraw assets without interruption. The exchange plans to return with new blockchain services. 

Solana Foundation's Expansion Plans in Brazil

The Solana Foundation plans to expand to Brazil, investing over $10 million in Web3 fields such as tokenization, AI, and art. The foundation aims to establish a local team and empower the Brazilian community to lead Solana's future growth. SOL, Solana's token, experienced substantial growth and surpassed Ethereum in decentralized exchange volumes in 2023.   

Top Altcoin Gainers and Losers

Gainers:

Beam BEAMX (+37.52%)

Celestia TIA (+32.08%)

Aptos APT (+20.31%)

Losers:

Mantle MNT (-3.97%)

Mina MINA (-3.73%)

Ordinals ORDI (-2.95%)