Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | December 2 - December 8, 2023

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

Bitcoin:

• Weekly change: +16.44%
• Crypto fund inflows hit 10-week streak of $1.76 billion, with bitcoin and ether reaching 18-month highs. Bitcoin funds saw $133 million inflows, while ether products received $31 million.
• BTC reached its yearly high, surpassing $44,000 and peaking at over $44,300 on a Tuesday.
• Influences on this surge included the expected U.S. spot ETF for Bitcoin, U.S. interest rate cut anticipations, and backing from bitcoin-supportive leaders.
• Bitcoin's rally first to $42,000, then $44,000, driven by 'panic buying,' pushed the crypto market cap beyond $1.5 trillion.
• Over $361.5 million in short positions were liquidated between Monday and Tuesday.
• Wall Street's "fear gauge," the Vix, fell dramatically to near four-year lows, indicating a significant shift in investor sentiment following the Fed's inflation concession.
• Bloomberg predicted Bitcoin could reach $500,000 during this crypto supercycle.
• Tether profited over $1.1 billion from Bitcoin holdings, while Microstrategy's profits neared $2 billion as BTC hit its yearly high.
• BTC hovered around $44,000 until Thursday morning (UTC), then dropped to under $43,500, fluctuating as investors recognized a potential 'bull trap.'
• K33 Research analysts anticipated a quicker Bitcoin recovery, noting the current decline lasted 755 days with a 36% drop from its all-time high.
• Bitcoin rose to $43,900 following U.S. jobs data release, reflecting optimism in the Federal Reserve's monetary policy. The data showed U.S. employers added 199,000 jobs in November, beating expectations and suggesting strong job growth. 
• This bolstered views that the Fed's policy would achieve a "soft landing" for the economy, easing recession fears. November's annual wage increase of 4% remained above the 3% level aligned with the 2% inflation target.
• Deribit's Chief Commercial Officer reported a record notional open interest in BTC and ETH options, totaling $23.6 billion. Bitcoin options made up 67% of this, with ether accounting for the remainder.

Ethereum:

• Weekly change: +14.76%
• ETH outperformed BTC over the weekend.
• ETH's weekly trend was less direct compared to BTC, amid expectations for a BTC ETF.
• ETH traded between $2200 and $2300, surpassing $2300 by Thursday afternoon.
• Previously, Societe Generale became the first major bank to issue a stablecoin on Ethereum.
• The SEC postponed Grayscale's Ethereum ETF, with minimal impact on its price.
• BTC's rally paused Thursday, while ETH and SOL reached a 19-month peak, leading the crypto surge.
• ETH's value increased by 5% in a single day.
• Meme coins DOGE and SHIB rose by 18% and 20%, while Solana's BONK soared over 200% in a week.
• With the crypto market heating up, experts are monitoring for signs of a correction, though they anticipate further rally potential.

Altcoins:

• Zodia Custody, backed by Standard Chartered, joined Ripple-owned Metaco's crypto storage network.
• Report clears Platypus Hackers of all charges.
• Mantle expanded to liquid staking protocol, beyond Layer-2 operations.
• Fantom Foundation started accelerator program with Andre Cronje mentoring.
• DeFi market rebounded to $50B, driven by yield-seeking speculators.
• Hashflow introduced 2.0 version with Solana support and DEX aggregation.
• Helium Mobile launched $20 unlimited US plan, combining blockchain and 5G.
• Binance delisted AEUR 'stablecoin' post-200% launch pump, plans compensation for misled traders.
• Tether (USDT) reached $90 billion market cap amid rising confidence.
• Bitzlato co-founder admitted to handling $700 million in illegal funds.
• HashKey report identified Thailand as a key player in the global crypto economy.
• Poloniex faced FCA warning and user withdrawal issues.
• Arbitrum approved grants to boost 26 projects in its ecosystem.
• Avalanche overtook MATIC, TRX, and LINK, entering top-10 cryptocurrencies.
• El Salvador introduced 'Freedom Visa' for $1 million crypto investments.
• Chainlink's staking program attracted $600M quickly, reaching its cap; LINK surged 12%.

Spot Bitcoin ETFs: SEC Engages Key Players

The SEC is in talks with key players like Grayscale and BlackRock about spot Bitcoin ETFs, with a decision expected by early 2024. Discussions focus on diverse ETF structures and compliance measures. Bitcoin's mention in SEC filings has surged, indicating market anticipation for the first spot Bitcoin ETF. 

BlackRock and Bitwise updated their filings, reflecting ongoing dialogues and efforts to address regulatory concerns. A 'kill switch' in BlackRock's filing suggests significant implications if Bitcoin is classified as a security. The potential approval of Spot Bitcoin ETFs could significantly impact the cryptocurrency investment landscape, marking a transformative era in crypto investments.

SEC Postpones Grayscale's Ethereum ETF Decision

The SEC has delayed its decision on Grayscale's Ethereum ETF conversion to January 2024, reflecting regulatory caution. Ethereum is gaining market favor over Bitcoin, with a 35% climb and 89% year-to-date increase, compared to Bitcoin's 60% quarterly and 163% annual surge. Ethereum's futures and options markets are outperforming Bitcoin's, indicating a shift in investor interest. 

Major institutions like Galaxy Digital, Celsius, and FTX are actively trading Ethereum, while Donald Trump's Ethereum holdings have significantly increased. This dynamic market shift underscores Ethereum's growing presence and the evolving regulatory landscape in the cryptocurrency sector.

Debate Intensifies Over Crypto Regulation and Use

Jamie Dimon, JPMorgan Chase CEO, and Senator Elizabeth Warren advocate for stringent cryptocurrency regulation, citing its use in illicit activities. Despite JPMorgan's blockchain ventures, Dimon proposed shutting down the crypto industry. The crypto community robustly opposes this, underscoring Bitcoin's resilience and critiquing traditional banking's regulatory failures. 

Research shows a mere 0.2% of crypto transactions are illicit, far less than cash. This debate underscores the clash between traditional finance's regulatory focus and crypto's innovative, decentralized ethos, reflecting the evolving dynamics of the financial landscape.

Solana's Ecosystem Flourishes with Notable Airdrops

Solana's ecosystem has thrived recently, notably due to impactful airdrops like Jito and Kamino. Jito's airdrop of $225 million in JTO tokens initially spiked, then fell in value, attracting significant attention. Despite challenges, Jito's valuation briefly exceeded $2 billion. Kamino Finance's potential future airdrop and its TVL's 257% increase to $76.5 million marked its growth. 

BONK token's price soared over 10,000%, contrasting with Solana's struggling Saga phone. Pyth Network's PYTH token debuted with a $468 million market cap, and Jupiter's airdrop targeted 955,000 wallets. Solana's SOL token tripled in value, underscoring the influence of airdrops in the crypto market.

ORDI Token's Surge Amid Bitcoin's Market Dynamics

ORDI, a BRC-20 token, recently reached a new all-time high, driven by Bitcoin's surge. Despite a high RSI indicating overbuying, strong support suggests its price won't fall below $31.83. ORDI's market cap exceeded $1 billion, a 600% increase in 30 days. 

However, Bitcoin Core developer Luke Dashjr identified a vulnerability in Bitcoin Core exploited by BRC-20 tokens, potentially halting their creation. This led to a 15% price drop in ORDI due to whale sell-offs. The Bitcoin community is also debating issues around censorship and privacy, particularly concerning coinjoin transactions, indicating a challenging period for Bitcoin and related tokens.

Extradition of Terra Co-Founder Do Kwon Imminent

Montenegro is set to extradite Terra co-founder Do Kwon to the U.S., as reported by the Wall Street Journal. This decision comes after a jurisdictional battle between the U.S. and South Korea, both of which have charged Kwon with various offenses. 

Kwon, currently serving a four-month sentence in Montenegro for document forgery, faces criminal fraud charges in the U.S. and financial crime charges in South Korea. The collapse of Terra's algorithmic stablecoin TerraUSD (UST) and its native asset LUNA led to a significant market downturn, prompting these charges. 

The U.S. Securities and Exchange Commission (SEC) has also filed a civil lawsuit against Kwon. Montenegro's Justice Minister, Andrej Milovic, has the final say in the extradition, with Kwon attempting to appeal the decision. The U.S. and Terraform Labs are engaged in ongoing legal proceedings regarding the nature of the tokens offered by the company.

Binance CEO Pleads Guilty, Faces Regulatory Shift

A federal judge accepted Changpeng "CZ" Zhao's guilty plea for violating the Bank Secrecy Act, with his return to the UAE before February 2024's sentencing undecided. Zhao, released on bond, faces U.S. stay requirements. Binance, admitting to three charges, faces a $4.3 billion fine and must allow DOJ and Treasury Department monitoring. 

Richard Teng, succeeding Zhao as CEO, leads Binance's strategic shift towards regulatory compliance, withdrawing its Abu Dhabi license application, and moving towards a more conventional corporate structure, crucial amid heightened regulatory scrutiny.

LayerZero and Starknet Foundation Announce Token Plans

LayerZero plans to issue a token in H1 2024, boosting metrics for network projects. This $3 billion interoperability protocol aims to enhance blockchain connections, with airdrop details pending. Starknet Foundation is also set to distribute 1.8 billion tokens for user rewards and rebates. Their Provisions Committee will allocate 900 million tokens for community contributions, with another 900 million for transaction fee rebates. 

A DeFi Committee will distribute 50 million tokens to stimulate network liquidity. These moves by LayerZero and Starknet Foundation highlight the growing use of token distributions and airdrops in the crypto industry for user engagement and network expansion.

Coinbase Wallet Revolutionizes USDC Transfers

Coinbase Wallet now enables global USD Coin (USDC) transfers via social media and messaging apps, eliminating the need for traditional transfer methods. Recipients can access funds by clicking a shared link, prompting them to download the app if necessary. Unclaimed funds are returned after two weeks. 

The service aims to expand access to digital assets, especially in high inflation and limited banking infrastructure regions. Coinbase Wallet already supports local fiat currencies in over 130 countries. Coinbase is also enhancing merchant transactions and Bitcoin payments, with plans to add support for the Lightning Network to improve BTC transactions.  

Top Weekly Altcoin Gainers and Losers

Gainers:

Bonk BONK (+218.10%)

Ordinals ORDI (+137.28%)

BitTorrent New BTT (+121.78%)

Terra Classic LUNC (+72.14%)

Helium HNT (+63.98%)

Losers:

Maker MKR (-5.89%)

Unus Sed Leo LEO (-5.43%)

Toncoin TON (-5.03%)

Bitget Token BGB (-4.98%)

Oasis Network ROSE (-2.67%)