Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | December 16 - December 22, 2023

Crypto Weekly Recap: Price Actions, Market Trends, and Key Developments

Bitcoin:

• Weekly change: +1.38%
• BTC experienced volatility this week, ending with a slight gain of over 1%.
• The week began with a drop below $41,000, indicating reduced bullish sentiment and lower trading volume as holidays approached.
• Bitcoin witnessed a $33 million outflow, breaking an 11-week streak of inflows.
• BTC rebounded to over $43,000 on Tuesday, influenced by ETF hopes and negative sentiment, with large holders acquiring 20,000 BTC.
• The cryptocurrency surged past $44,000 on Wednesday, driven by discussions around a Bitcoin ETF.
• However, BTC's momentum stalled, fluctuating between $44,200 and $43,400 until Friday.
• Hong Kong regulators expressed openness to considering Spot Crypto ETF applications.
• On Friday, Bitcoin showed a muted response to favorable inflation data from the U.S.
• The PCE Index reported at 2.6%, raising expectations of reduced interest rates.
• Despite positive macro indicators, BTC's price didn't offer much optimism for bulls.
• Large Bitcoin holders sold around 50,000 BTC, worth approximately $2.2 billion, causing rally concerns.
• Whale transactions remain speculative with 89% of BTC's supply being profitable.
• Elon Musk announced plans for X to launch payment services by mid-2024, with speculation about Dogecoin and Bitcoin integration remaining unconfirmed.
• However, Bitcoin approached a 'Golden Cross' on its weekly chart, with its 50-week SMA crossing above the 200-week SMA.
• This bullish signal, seen by analysts as indicative of a potential trend reversal, underscored the price movement's strength.

Ethereum:

• Weekly change: +0.17%
• ETH had a quieter week than BTC, facing criticism for underperforming compared to SOL and BTC.
• ETH's price was stable; it dropped to $2140 on Monday but soon recovered.
• Ethereum whales displayed mixed actions; some bought 100,000 ETH, supporting its price, while others sold after a year's inactivity.
• Bitcoin's transaction fees surpassed Ethereum's for the third day, fueled by unique BTC inscriptions hype. Solana DEXs momentarily overtook Ethereum in trading volume, driven by memecoin and stablecoin trades.
• On Tuesday, reports surfaced that the SEC delayed Ethereum ETF approvals until mid-2024. ETH fell to $2150, then rebounded to $2250.
• Ex-Ethereum developer Lane Rettig disclosed in a video that 70% of ETH was pre-mined and quickly shared, mainly with Ethereum's founders.
• Ethereum had mixed results: it fell against BTC but rose 82% against the dollar.
• On Thursday, Ethereum developers planned to launch the 'Dencun' upgrade testnet in January.
• ETH began rising mid-Thursday, reaching over $2300 following macro data release.
• ETH still maintained support from crypto enthusiasts. Arthur Hayes, influenced by his admiration for Ethereum's co-founder Vitalik Buterin, remained optimistic about Ethereum, predicting its price could hit $5,000. He decided to sell his Solana holdings, reflecting a shift in strategy.

Altcoins:

• Arweave's AR token value fell amid a heated debate over a proposed hard fork.
• A FCA survey revealed a significant drop in crypto payments.
• Coinbase sued the SEC after a petition denial but gained approval for digital asset operations in France.
• Revolut temporarily halted crypto purchases in the UK, complying with FCA regulations.
• Amid an activity slump, Friend Tech released a V2 teaser trailer.
• A judge ruled DCG couldn't sell or reduce Genesis ownership until bankruptcy proceedings concluded.
• Hackers offered Binance customer information for sale at $10,000.
• Internet Computer introduced a GDPR-compliant European subnet.
• Immutable launched a tool for interoperability across various video games and marketplaces.
• Ark Invest continued its Coinbase sell-off, unloading an additional $5.5 million in COIN.
• OKX quickly fixed a major security issue in its iOS app following CertiK's alert.
• SEI reached an all-time high.
• Bitfinex Securities debuted the first tokenized bond on the Liquid Network.
• Atomic Wallet introduced a $1 million bug bounty program to boost security.
• Avail tested data availability for Starknet Layer 3 appchains on its testnet.
• Ledger committed to fully compensating the victims of the $600k ConnectKit exploit.
• Stablecoins peaked at a 7-month high in December, totaling $129 billion, signaling a rise in crypto market inflows.
• Following the CEO's removal, Qredo secured debt financing for operational stability.
• Worldcoin suspended iris scanning operations in India, Brazil, and France.
• PancakeSwap's CAKE token surged over 20% following a proposal to cut the token supply by 300 million.
• Optimism's OP Token jumped 23% as its mainnet hit $5 billion in TVL and network addresses increased by 391% since January.
• Gaming company Wemade established a $100 million Web3 fund with Singapore's Whampoa.
• Paxos gained NY regulatory approval to extend operations to Solana.

BlackRock's Cash Redemption Shifts Bitcoin ETF Landscape

BlackRock shifts to cash redemption for Bitcoin ETF, impacting SEC's stance. BlackRock's IBIT ticker signifies an evolving crypto landscape. 7RCC's unique spot Bitcoin ETF with carbon credits adds diversity. Ark Invest refines strategy and Grayscale faces marketing challenges. Potential $55B net flows expected post ETF approval. 

Bitcoin's projected surge to $200,000 buoyed by institutional interest and ETF prospects. SEC's evolving stance on Ethereum and Nasdaq's rule change underpin ETF anticipation. Notable meeting between BlackRock, Nasdaq, and SEC indicates significant progress. Expected SEC approval by January 10, 2024, may boost U.S. cryptocurrency adoption.  

Solana's Market Surge: Climbing the Crypto Ranks

Solana has surged past XRP and BNB to secure fourth place in the crypto market. Its market cap hit $37.69 billion, with the SOL unit's price soaring to $86.96. The frenzy over meme coins, notably Bonk, propelled Solana’s rise. Google searches for Solana increased by 250%, matching its remarkable price rally. 

Solana attracted institutional investors and integrated the EURC stablecoin, offering a compelling alternative for euro savings. The Solana NFT ecosystem, including Metaplex, recorded substantial growth. SOL's market valuation reached $37 billion, and influential analysts predict a bright future for Solana. The Solana Saga phone auction and BONK token phenomenon added to the excitement.  

2024 Crypto Predictions: Bitcoin and Ethereum Lead

In 2024, crypto predictions center around Bitcoin's resurgence post-halving and Ethereum's strides. Ryan Selkis projects Bitcoin's sustained dominance and growth in institutional support. AI and Solana are anticipated to surge, alongside stablecoin innovation. Messari also anticipates Wall Street's deeper involvement. Noteworthy products include BASE, Celestia, and Project Guardian, showing promise for interoperability and DeFi. 

Elsewhere, industry insiders predict blockchain advancements, NFT revitalization, and user experience improvements. The UK prepares as a global crypto hub, stablecoins are set to dominate, and a bullish trend is anticipated with increased institutional engagement. Regulatory changes, particularly ETF approvals, are expected to shape the landscape.  

Three Arrows Capital's Liquidation and Creditor Challenges

Three Arrows Capital, once a major cryptocurrency player, faced liquidation with an estimated 45.74% creditor recovery rate. Despite a $1.16 billion asset valuation, claims totaled $2.7 billion, leading to settlements with DCG, Genesis, and BlockFi, adding $292 million. 

Illiquid tokens made up 82% of assets, with a release scheduled by 2026. Staking and sales activities yielded earnings, but legal battles froze $1.1 billion in assets. Co-founders Su Zhu and Kyle Davies faced allegations, resulting in freezing orders and bankruptcy filing, triggered by a $3.3 billion debt storm.  

Senator Warren's Critique of Crypto's 'Revolving Door'

Senator Elizabeth Warren criticizes the crypto industry for employing ex-government officials, alleging this "revolving door" hinders regulatory efforts, especially against terror financing. She targets groups like Blockchain Association, Coin Center, and Coinbase, citing a Politico article that labels these hires as a strategic weapon. 

The industry refutes this, asserting their advocacy as a fundamental right and emphasizing collaboration with law enforcement. Warren's concern centers on the potential influence of these private-sector roles on crypto-related legislation and regulation, while the industry defends its policy engagement as constitutional and crucial for national welfare.

FTX's Bankruptcy Exit Plan and Creditor Repayment Strategy

FTX's estate proposed a bankruptcy exit plan, prioritizing creditor claims based on asset values from the bankruptcy filing date, aiming to repay up to 90% of recovered funds. Meanwhile, FTX's Bahamas unit agreed with the U.S. bankruptcy team to pool and redistribute assets globally. 

This deal, pending court approvals, assigns asset realization roles to FTX Digital Markets in the Bahamas and FTX Debtors for other recoveries. The plan, designed for efficient creditor value distribution, faces potential opposition and awaits a 2024 court hearing. The Bahamas unit's commingling of funds complicates client money identification.

China's Ministry Boosts NFT and Decentralized App Development

China's Ministry of Industry and Information Technology aims to boost NFT and decentralized app development, emphasizing governance, industry, and innovative business models. The government plans to formulate strategy documents to clarify the path of web3, with a focus on digital ecosystem construction. Additionally, the ministry intends to launch pilots related to distributed digital identity and explore web3 digital identity authentication and management. 

Despite a crypto trading ban, China continues to embrace blockchain technology, with recent developments including the launch of a national-level real-name decentralized identifier system. The progress demonstrates China's leadership in blockchain technology, even after the ban on cryptocurrencies.  

Argentina and El Salvador: Bitcoin's Legal and Economic Integration

In Argentina, amid a plummeting local currency, Bitcoin gains legal status for contracts, announced by Foreign Affairs Minister Diana Mondino. This aligns with Bitcoin's recent 65.57% value surge over three months. In El Salvador, a new law expedites citizenship for Bitcoin investors, bypassing standard residency requirements. 

This move, part of President Nayib Bukele's vision for a Bitcoin-driven economy, includes plans for a tax-advantaged "Bitcoin City." However, the IMF voices concerns over Bitcoin as legal tender, and Bukele's re-election bid faces constitutional challenges. Both countries are pioneering in integrating Bitcoin into their economic and legal frameworks.

Rise in Sophisticated Crypto Scams and Security Vulnerabilities

In a recent surge of sophisticated crypto scams, a hacker operating phishing campaigns on Google and social media has drained approximately $58 million from over 63,000 victims in nine months. This 'Wallet Drainer' was first detected in March, employing regional targeting and page-switching tactics to bypass ad audits, making malicious ads seem legitimate. Notably, blockchain investigator ZachXBT disclosed nine phishing ads, over half linked to this wallet drainer.

Separately, the founders of Manifold Trading and Rug Radio, along with other crypto influencers, were targeted in SIM-swap attacks. These attacks, increasing in frequency around the holidays, led to the loss of control over their accounts. In one instance, a SIM-swap hacker took over Manifold Trading's official account, posting malicious links. The attacks highlight the vulnerability of relying solely on SMS verification for security, with over $13.3 million stolen from 54 high-profile figures in recent months.

Avalanche and EVM Chains: Rising Fees from NFT Inscriptions

Avalanche users paid $13.8 million in fees over five days for inscriptions, with a single-day peak of $5.6 million. EVM chains, including Avalanche and Arbitrum One, saw a record $8.3 million in gas fees on Dec. 16 due to Ordinals inscriptions. 

Solana's inscriptions crossed 1 million, with a significant surge in creators and fees. Etherscan reports 95% of EVM chain transactions are inscriptions, initially popularized on Bitcoin. This trend has led to increased gas fees and operational challenges across networks, reflecting the growing interest in NFTs and the rising demand for blockchain space.

Top Weekly Altcoin Gainers and Losers

Gainers:

Internet Computer ICP (+48.10%)

NEAR Protocol NEAR (+44.44%)

Axelar AXL (+36.74%)

Sei SEI (+35.74%)

Optimism OP (+35.22%)

Losers:

FTX Token FTT (-26.54%)

Bittensor TAO (-25.58%)

Beam BEAMX (-23.59%)

Bonk BONK (-22.49%)

Ordinals ORDI (-21.66%)