Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | January 13 - January 19, 2024

Crypto Weekly Recap

Bitcoin:

• Weekly change: -12.39%
• Bitcoin's price has fallen by 15% since the US Bitcoin ETF launch.
• Crypto investment products saw $17.5 billion in record trading volumes last week, with Bitcoin claiming 98% of the $1.18 billion inflows.
• BTC plunged from $46,000 to $43,400 within three hours last Friday.
• The downtrend persisted, dropping to $42,200, then stabilizing between $42,400 and $43,200 on Monday. Trading was quiet due to Martin Luther King Jr. Day. Bitcoin greed index dropped to 'neutral' amidst ETF disappointments.
• BTC's spot ETF trading initially surged, then declined as Grayscale moved BTC and investors took profits post-ETF approval.
• From Tuesday to Thursday, Bitcoin prices oscillated between $42,320 and $43,500, rebounding above $43,000 amid Fed rate pause speculations.
• Bitcoin ETFs set a record with over $12 billion in trading volume within five days, triple the volume of all 500 ETFs launched in 2023 on Tuesday.
• BTC fell to $42,400 on Wednesday. JPMorgan's CEO's negative remarks on Bitcoin coincided with significant sales by Bitcoin miners and Grayscale's BTC transfers.
• On Thursday, Bitcoin and Ethereum dipped following lower-than-expected U.S. jobless claims. Bitcoin's hash rate dropped 34% due to Texas' freeze, affecting mining.
• On Friday, BTC dropped to $40,820, then recovered above $41,000. JPMorgan analysts predict more downward pressure as Grayscale Bitcoin Trust investors sell off.
• IntoTheBlock notes BTC's selling pressure is due to large wallets accumulating, smaller ones selling, and a shift in trading behavior. Market indicators show no typical peak, with modest MVRV ratio at 1.88.
• Glassnode predicts Bitcoin's fourth halving in about 100 days at block 840,000, reducing mining rewards from 6.25 to 3.125 BTC. Analysts anticipate a price correction to $34,000 before April 2024's halving event, based on historical patterns.

Ethereum:

• Weekly change: -6.88%
• ETH experienced a significant drop from $2,680 to $2,480 over the weekend, mirroring BTC's decline.
• Google searches for Ethereum ETF in the US peaked at a 12-month high, yet ETH's price didn't rise despite shifting investor interest from BTC to ETH and other altcoins. Bitcoin’s rolling 60-day correlation with Ether has fallen below 70% for the first time since early 2021, according to Kaiko’s data.
• Celsius and Figment redeemed over $1.6 billion in staked Ethereum, 85% of total withdrawals. Celsius prepared to unstake 206,300 ETH for bankruptcy, and Figment managed large withdrawals. ETH's price remained stable, hitting $2,600 on Tuesday before declining.
• Ethereum developers rolled out the Dencun upgrade on the Goerli testnet, introducing proto-danksharding to cut costs and storage needs. However, ETH failed to break the $2,600 mark.
• Following the dip, Ethereum's staking ratio jumped to 24% after Shapella, with most stakes profitable. Demand for Ethereum hit a 13-month high following the first Bitcoin Spot ETF's approval, and daily new ETH addresses reached 636,480, a record since November 2022.
• ETH fell below $2,500, hovering around $2,400 on Friday.
• The SEC postponed its decision on Fidelity's proposed spot Ethereum ETF to March. JPMorgan predicted less than a 50% chance of approval by May, but suggested ETH could soar in 2024 due to the Dencun upgrade and ETF speculation.

Altcoins:

• Fantom reduced validator stake requirements by 90% to 50k FTM. Read more
• Sui and Celestia achieved new all-time highs.
• Google Cloud joined Flare Network as a validator, resulting in a FLR price jump. Read more
• Xai Gaming Token's value surged as its airdrop reached $140 million. Read more
• OKX secured a Dubai license while Binance launched a Thailand exchange. Read more
• Metis launched a decentralized sequencer on testnet amid significant growth. Read more
• HashKey Group completed a $100M Series A funding round, reaching a $1.2B valuation. Read more
• Chainlink integrated with Circle's CCTP protocol for USDC cross-chain transfers. Read more
• Multichain's CEO reappeared on Telegram amid investor queries. Read more
• Socket protocol lost $3.3M in a confirmed approval exploit. Read more
• Sam Bankman-Fried's parents requested dismissal of an FTX clawback lawsuit. Read more
• IRS delayed crypto reporting requirements, simplifying taxes. Read more
• Ripple considered an IPO outside the US amid SEC challenges. Read more
• SEC v. Terraform Labs trial postponed to March, possibly to accommodate Do Kwon. Read more
• Gemini received approval to operate in France, set to launch within weeks. Read more
• Algorand cut block times by 20% with Dynamic Lambda upgrade. Read more
• Frax Finance's Layer 2 Fraxtal set to debut in February. Read more
• dYdX on Cosmos surpassed Uniswap v3 on Ethereum in daily trading volume. Read more
• Blockchain firm accused Polygon of suspicious transfers, causing a MATIC dump. Read more
• Woo raised $9M to enhance liquidity of WOO X Exchange. Read more
• Cristiano Ronaldo's lawsuit against Binance over NFT promotions likely heading to trial. Read more
• Arbitrum launched a program to support custom chain development. Read more
• Uma token surged by 90% after indicating a focus on MEV solutions. Read more

Bitcoin ETFs Surge in US Market

As of January 18, 2024, Bitcoin became the second largest US ETF commodity, with over $12 billion traded in eleven funds after 5 days. On January 16, Bitcoin ETF trading volume hit $1.8 billion, with BlackRock's and Fidelity's funds significantly contributing. 

BlackRock's IBIT achieved $1 billion in assets, while Grayscale's trust faced a $1.2 billion outflow. ProShares is innovating with leveraged and inverse Bitcoin ETF filings, while VanEck closes its Bitcoin Strategy ETF following SEC approval of its spot Bitcoin ETF. Amidst these dynamics, ARK Invest shifted its stakes, favoring direct Bitcoin ETFs and BlackRock strategically bought 11,500 BTC.  

Ethereum's Comeback: ETFs and Market Recovery

In 2024, Ethereum eyes a major comeback, fueled by the anticipation of a spot Ethereum ETF. Fidelity's application for this ETF, though delayed by the SEC until March 2024, reflects a growing institutional interest in Ethereum, akin to Bitcoin's trajectory. The SEC's recent approval of Bitcoin ETFs adds to the optimism for Ethereum's ETF prospects. 

Ethereum's significant role in DeFi and NFTs, its transition to proof-of-stake, and the upcoming Dencun upgrade for improved scalability and reduced fees, further bolster its position. Despite a 25% dip last year, Ethereum's market recovery is evident, with a 10% improvement in the ether-bitcoin ratio. The potential 2024 approval of an Ethereum ETF could be a game-changer, potentially challenging Bitcoin's dominance in the crypto market.

XRP in the Spotlight: False Whale Alert and Market Moves

This week, the crypto scene buzzed with a false Whale Alert tweet about a huge XRP transfer to Bitfinex, later revealed as a glitch involving only a few cents. Ripple's CTO clarified the error, underscoring the XRP Ledger's strength. Hong Kong is reshaping its crypto approach, notably with ETFs, but has dropped XRP from its key indexes. 

Solana and Avalanche are gaining traction, while Binance predicts a surge in Bitcoin investment following U.S. SEC's approval of Bitcoin ETFs. Ethereum's potential ETFs, Ripple's new digital currency platform, and Cardano's developments are also in focus. Traditional finance's growing involvement in crypto and Binance's BNB's 28% gain highlight the sector's dynamism.

TrueUSD Faces Depegging Crisis Amid Market Fluctuations

TrueUSD (TUSD), a US dollar-pegged stablecoin, faced a depegging crisis, trading at about $0.988. This event was influenced by factors like the HTX and Poloniex hacks, its link to Justin Sun, and Binance's shift to FDUSD pairs. Binance's exclusion of TUSD from Launchpad projects further impacted its stability. 

Concerns arose over TUSD's reserve transparency, though its managing firm, Techteryx, refuted these claims. The supply of TUSD dropped below $2 billion, a significant decline since June 2023. Binance's initial support for TUSD as a zero-fee pair saw a shift in focus to FDUSD following the depegging.

Coinbase vs SEC: Defining Crypto Investments

Coinbase likened crypto buying to collecting Beanie Babies, asserting that these tokens don't confer the same rights as traditional securities. This stance counters the SEC's lawsuit alleging Coinbase's sale of unregistered securities. The SEC maintains that crypto purchases are investments in the underlying network or enterprise. The outcome of this case could significantly impact both the collectibles and crypto sectors. 

The hearing, lasting five hours, saw Judge Failla weigh arguments on the nature of crypto transactions, staking, and the applicability of the Howey test in this context. Coinbase's defense highlighted the distinct nature of crypto tokens, which, unlike stocks, don't offer dividends or project rights, challenging the SEC's broader interpretation of investment securities.

Tether's USDT Scrutinized for Money Laundering Concerns

The recent discussions around Tether's USDT focus on its alleged involvement in money laundering and underground banking in East and Southeast Asia. A United Nations report points to a significant shift in cryptocurrency misuse, with USDT's ease of transfer and acceptance making it attractive for obscuring illicit funds, especially in the online casino industry. 

In response, Tether has expressed disappointment at being singled out, emphasizing its role in supporting developing economies and its proactive collaboration with law enforcement, including freezing over $300 million in assets linked to illegal activities. 

Justin Sun, the founder of Tron, has contested the UN report's claims, highlighting factual inaccuracies and Tron's dedication to maintaining blockchain integrity. He advocates for increased blockchain education and global cooperation to understand and harness the technology's benefits while mitigating risks. 

Hong Kong and Global Markets Embrace Bitcoin ETFs

In Hong Kong, Venture Smart Financial Holdings Limited is gearing up to launch a spot bitcoin ETF within the first quarter of 2024, targeting $500 million in assets under management by year-end. This follows Hong Kong's readiness to accept applications for spot crypto ETFs, with three crypto futures ETFs already listed. 

In South Korea, the President's Office is pushing the financial regulator to consider approving a local spot bitcoin ETF, despite the Financial Services Commission's warnings against potential violations of capital market laws. 

Meanwhile, Singapore has restricted the local listing of Bitcoin ETFs, citing the asset class as non-eligible for retail and institutional investors, leading to increased interest in U.S. options. Thailand also expressed reluctance to approve local Bitcoin ETFs, citing a lack of necessary policy framework.

Solana's Mobile Success and DeFi Developments

Solana Mobile's new smartphone edition garnered 30,000 pre-orders in two days, featuring upgraded specs and a crypto wallet, signaling strong market interest. Jupiter, a Solana-based DeFi aggregator, is set to airdrop one billion JUP tokens to nearly a million users, alongside teasing a new meme coin launch. 

Investment giant Franklin Templeton, managing over $1.4 trillion, showed keen interest in Ethereum and Solana, highlighting their potential in a series of tweets. Meanwhile, Solana's meme coin Dogwifhat (WIF) hit an all-time high following a 120% weekly surge, partly due to listings on major exchanges, with its market cap nearing the top 100 cryptocurrencies.

Manta Network's Challenges Amidst Token Launch

Manta Network faced a DDoS attack during its MANTA token issuance, leading to slow transactions and high gas fees, yet the token's value soared, reaching a $550 million market cap. The network's airdrop disappointed many in the DeFi community due to minimal token allocations and lagged behind other Layer 2 networks in transaction speed. 

Additionally, its listing on Bithumb was clouded by money laundering allegations involving suspicious transactions of two million MANTA tokens. These tokens were reportedly dumped at inflated prices, raising compliance concerns with South Korea's anti-money laundering laws. Despite these challenges, Manta Network is expanding in Asia, focusing on South Korea and Hong Kong, to enhance collaboration with local developers and entrepreneurs.

Top Weekly Altcoin Gainers and Losers

Gainers:

Flare FLR (+24.57%)

Blur BLUR (+9.29%)

Chiliz CHZ (+5.80%)

Celestia TIA (+4.79%)

TRON TRX (+2.21%)

Losers:

Bonk BONK (-31.15%)

Bitcoin SV BSV (-25.10%)

Optimism OP (-22.96%)

THORChain RUNE (-22.11%)

Arbitrum ARB (-22.05%)