Coin360 Daily Dispatch | Crypto Market Updates & Highlights | November 13, 2023

Bitcoin Stability Amid Solana's Decline and Mining Revenue Record

Bitcoin's stability contrasts with Solana's cooling rally, as Bitcoin mining hits a record $44 million in daily revenue. Investors' cautious stance ahead of U.S. inflation data led to 30,000 BTC moving to exchanges. CEXs saw a 57.5% spike in spot trading volume. Bitcoin fund holdings reached an all-time high of over 863,000 BTC, amid ETF anticipation.

THORChain's Trading Volume Surpasses Curve Finance

THORChain's trading volume hit $1.32 billion last week, overtaking Curve Finance as the third-largest DEX by weekly volume, as per DefiLlama data. RUNE, its native token, surged 56.6% weekly, reaching a yearly high of $5.31 before dropping back to $4.86 today. THORChain also eclipsed PancakeSwap in 24-hour volume, showcasing its unique value in direct BTC swaps without intermediaries.

Celestia Outshines Bitcoin and Ethereum

The crypto market has seen Celestia (TIA) outperform Bitcoin and Ethereum, with substantial gains of over 20%. Celestia's rise can be attributed to its innovative modular blockchain network approach. Additionally, other notable gainers in the market include MovieBloc, Filecoin, Sei, Optimism, Cosmos, Wrapped Matic, Polygon, and 0x, each presenting unique value propositions. 

Institutional Inflows Boost Bitcoin and Other Cryptocurrencies

Bitcoin (BTC) and other cryptocurrencies have witnessed a significant surge in institutional inflows, surpassing $1 billion in less than two months. This growth is partly fueled by the anticipation of the United States' first spot exchange-traded fund (ETF) approval. Since November 2022, the total crypto market cap has increased by $600 billion. 

Bitcoin, Ether (ETH), and Solana are leading this trend, with Bitcoin ETPs alone registering $240 million in inflows. Ether funds experienced their largest inflows since August 2022, adding $49 million, while Solana-based funds saw inflows of $12.4 million. The assets under management (AUM) for crypto exchange-traded products (ETPs) have nearly doubled since the year's start, reaching $44.3 billion, the highest since May 2022. 

Regionally, Canada, the U.S., Germany, and Switzerland are leading in inflows. Additionally, blockchain equity ETFs have seen their largest inflows since July 2022, totaling $14 million. 

Cryptocurrency Theft via Fake Skype App by Chinese Hackers

A user lost their cryptocurrency funds after unknowingly using a fake version of Skype. The attackers, believed to be Chinese hackers, used a phishing strategy to steal the funds. The fake app uploaded personal information and tracked users' message history to detect crypto transfers and replace destination addresses. SlowMist, the blockchain security firm, blacklisted the addresses and warned users to stick to official download channels.

Coin Cloud's Security Breach Exposes Customer Data

Hackers have breached the backend system source code and sensitive customer data of Coin Cloud, a prominent Bitcoin ATM operator. Around 70,000 client selfies and personal details of approximately 300,000 individuals have been exposed. The hackers are discussing their actions on secret channels, leading to concerns about the public release of the compromised database. 

The incident highlights vulnerabilities in digital currency operations and the need for robust cybersecurity measures. Coin Cloud's response to the breach will be crucial in restoring confidence in its operations and the broader cryptocurrency ATM market.

Hackers Misuse Create2 Code for Crypto Theft

Hackers have been stealing over $60 million worth of cryptocurrency by misusing a piece of code called Create2, which allows them to bypass security alerts and gain access to private keys. By exploiting Create2, hackers can create temporary wallet addresses to receive funds after users click on a malicious signature. These incidents highlight the prevalence of cryptocurrency-related hacks and the need for improved security measures.

Binance-Linked Wallet Hack: A $27 Million Heist

A Binance-linked wallet was compromised, resulting in the theft of $27 million, primarily in Tether (USDT). The stolen funds were swiftly converted to Ethereum (ETH) and then to Bitcoin via various platforms, including FixedFloat and ChangeNow, using THORChain. The wallet had received $27 million from Binance a week before the heist and was reportedly connected to a Binance smart contract deployer. 

This incident highlights the increasing security breaches in the Web3 space, with a total loss of over $699 million in Q3 2023 alone. The crypto community is now debating the safety of storing large sums in hot wallets and the need for enhanced security measures.

BitgetX HK to Shut Down Amid Hong Kong's Crypto Licensing Changes

BitgetX HK, a crypto exchange unit of Bitget in Hong Kong, will cease operations on Dec. 13 and will not pursue a local crypto license. The platform, which began operations in April, enabled spot trading and P2P transfers. 

However, users can now only withdraw assets as it prepares to shut down. BitgetX HK has decided to permanently withdraw from the Hong Kong market due to business and market-related considerations, forgoing the application for a Virtual Asset Trading Platform (VATP) license. 

Hong Kong's new licensing regime for crypto asset service providers, allowing retail trading, has seen approvals for firms like Hashkey and SEBA under the Securities and Futures Commission (SFC) regime.  

Foresight Ventures Acquires Majority in The Block

Singapore-based fund Foresight Ventures has acquired the majority of shares in crypto news and data provider The Block at a valuation of $70 million. The company plans to expand into Asia and the Middle East and develop new products. Former CEO Mike McCaffrey's stake was bought out, and the funds were also used to address a leadership shake-up and layoffs earlier this year.

Former FTX Executives Launch Backpack Exchange

Former FTX executives, including key witnesses against Sam Bankman-Fried, have formed a new cryptocurrency exchange called Backpack Exchange. Led by Can Sun, the exchange aims to address the challenges that led to FTX's downfall and provide a transparent and trustworthy experience for users. The company has secured a license to operate in Dubai.

Amber Group's OP Token Withdrawal Boosts Optimism

Cryptocurrency firm Amber Group's withdrawal of OP tokens from Binance has caused a surge in trading volume and token price for Optimism. This has also led to a significant increase in Optimism's total value locked (TVL), as it aims to establish itself as a leading Layer 2 protocol for fast and low-cost Ethereum transactions. The OP token has experienced a price rally and increased activity, reflecting optimism about its growth prospects. However, it has recently given up most of the gains.

Polygon's MATIC Hits 5-Month High

Polygon's native cryptocurrency, MATIC, has surged by 20% in the past week, reaching a 5-month high of $0.86. As per Nansen, the increase was driven by increased trade activity and positive sentiment in the broader crypto market. The upcoming developments, including Polygon 2.0, could further drive the rally. 

Polygon has shown network resilience and a developer-friendly environment, and its daily gas fees and transaction counts have been volatile throughout the quarter. Tether and USDC have the highest user engagement on the platform, while Chainlink has recorded the highest transaction volume. 

Polygon Labs is focusing on ZK research and is set to launch Polygon Miden, a ZK-rollup, on a testnet in Q4. Yesterday, a mysterious wallet transferred $14.7 million worth of MATIC tokens into Coinbase, causing the price of MATIC to rise above $0.80 for the first time since July.

Cardano and Kraken Eye Layer-2 Network Partnership

Cardano founder Charles Hoskinson is interested in partnering with Kraken to develop a Layer-2 (L2) network. Kraken is currently searching for L2 network partners, and Hoskinson's direct approach signifies a turning point in this search. 

The potential partnership could have a similar impact to Coinbase's launch of its L2 network, Base, which has been successful in enhancing the performance and user experience of Ethereum-based decentralized applications. Collaboration between established companies is becoming crucial in the cryptocurrency sector to drive technological advancements and shape the future of digital finance.

Bithumb Prepares for IPO on South Korea's Kosdaq

Bithumb, a major South Korean cryptocurrency exchange, is preparing for an initial public offering (IPO) on the Kosdaq, South Korea's equivalent of Nasdaq, with a target date in the second half of 2025. The company has selected Samsung Securities as its underwriter. This move is seen as a strategic effort to maintain market share against Upbit, South Korea's largest crypto exchange. 

Bithumb's former chairman, Lee Jeong-hoon, has rejoined the company as a registered director, amidst ongoing investigations into alleged bribery and other legal issues. Bithumb, founded in 2014, currently holds a 24-hour trading volume of around $580 million. This IPO would mark Bithumb as the first digital asset company to go public on the South Korean stock market.

Spain's CNMV Cracks Down on Illegal Crypto Promotions

Spain's financial regulator, CNMV, is taking a firm stance against fraudulent cryptocurrency promotions. They've initiated legal action against Miolos, a tech provider, for unauthorized crypto ads lacking risk warnings. This move is part of Spain's broader plan to implement the EU's MiCA framework ahead of schedule, aiming to ensure legal clarity and investor protection in the crypto market. 

CNMV's head, Rodrigo Valbuena, highlighted the illegal use of Spanish actors and media identities in deceptive crypto ads on social media, stressing the risks to investors and the market's integrity. The CNMV plans to increase its staff by 15% to better address crypto-related violations, emphasizing its commitment to rigorous enforcement and investor safety.

IRS's Crypto Tax Proposal Faces Industry Backlash

The IRS's digital asset tax proposal, drawing over 120,000 comments, faces industry backlash over privacy concerns and its broad broker definition, potentially impacting various blockchain participants. Meanwhile, there's advocacy for the IRS to provide free tax tools for DeFi users, leveraging blockchain data, while focusing regulation on centralized exchanges.

Bybit Fintech Faces $1 Billion Lawsuit from FTX

Bybit Fintech and affiliated entities, including Mirana Corp., face a $1 billion lawsuit filed by FTX Bankruptcy to recover approximately $953 million in assets allegedly withdrawn from FTX just before its Chapter 11 bankruptcy filing. 

The lawsuit, heard in a Delaware Court, also accuses Mirana Corp. of exploiting VIP benefits to withdraw substantial assets. FTX, under new management, intensifies efforts to reclaim funds and navigate Chapter 11 complexities.  

New Research on zk-SNARKs for Ethereum Privacy

New research explores the use of zk-SNARKs to enable private transactions on the Ethereum blockchain using Solidity. The research aims to bring privacy-enhancing functionality to the Ethereum base layer without the need for layer-2 blockchains. However, there are technical barriers that need to be addressed, such as introducing multithreading to Ethereum and ensuring auditability. 

If successful, this research could enhance privacy, improve MEV resistance, and optimize blockchain performance. The research is open-source and the author hopes to attract venture capitalist interest to further develop the findings.

Cboe to Launch Bitcoin and Ether Futures

Cboe is set to launch margined bitcoin and ether futures in January, becoming the first US-regulated cryptocurrency exchange to offer spot and leveraged derivatives trading on a single platform. The exchange plans to expand its crypto derivatives suite and introduce physically delivered products in the future. The launch is supported by several crypto trading firms including B2C2, Jump Trading, and Cumberland.

Grayscale Bitcoin Trust's Discount Narrows Significantly

The Grayscale Bitcoin Trust (GBTC) discount has narrowed to 10.35%, a significant recovery from a near 50% drop last year. Bitcoin wallet addresses holding over $1 million surged 237% to 81,925 in 2023, indicating growing investor confidence and institutional interest in the cryptocurrency market.

Tether Increases USDT Minting Across Blockchains

Tether, a major stablecoin issuer, has been ramping up its USDT minting, issuing 4 billion USDT in the past month. This includes 1 billion USDT on the Tron blockchain on November 10 and another 1 billion on Ethereum on November 9, adding to 2 billion USDT issued on Tron on November 3 and October 19. 

Tether's CTO, Paolo Ardoino, noted these are for inventory replenishment. In 2023, Tether minted 22.75 billion USDT, with 57% on Tron. Tether also burned significant amounts of USDT, including 1.2 billion on Tron in August. Amidst this, Tether plans to launch five new projects in 2024, aiming to disrupt centralized Web2 services.

Solana's User Count Overtakes Ethereum

Solana's active user count surpassed Ethereum's, reaching 356,300, a 70% spike, overtaking Ethereum's nearly 330,000. This surge in activity, a sign of Solana's recovery, contrasts with Ethereum's consistent user base. Solana's price soared 145% in four weeks, outperforming rivals, with a 62% increase in DeFi protocol value and a 35% rise in NFT sales volume. 

Meanwhile, Ethereum's ecosystem, including Layer 2 networks, suggests over 1M active wallets. Concurrently, Solana's price jumped 40% in a week, hitting a 2023 high of $58. This rise, Solana's strongest since January, aligns with broader market uptrends and Bitcoin ETF excitement. Despite the FTX estate selling 250,000 to 750,000 SOL tokens daily, investor sentiment shifted positively. 

Solana-focused funds attracted $10.8 million in a week, reflecting institutional interest. Solana's futures open interest peaked at $772 million, the highest since November 2021, indicating increased market liquidity and bullish sentiment.

Top Altcoin Gainers and Losers

Gainers:

Celestia TIA (+16.44%)

Bitget Token BGB (+13.09%)

0x ZRX (+10.66%)

Losers:

Rollbit Coin RLB (-9.66%)

FTX Token FTT (-7.40%)

Injective INJ (-7.15%)