Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | January 27 - February 2, 2024

Crypto Weekly Recap

Bitcoin:

• Weekly change: +8.37%
• Last Saturday, Bitcoin reached $42,200, affirming its safe-haven status amid price crises, according to Kaiko.
• Bitcoin climbed to $42,800 on Sunday, then fell to $42,100 early Monday, later surging to $43,200. Negentropic highlighted potential volatility and a possible $1 billion in short liquidations, reducing GBTC selling pressure. China's $140 billion liquidity boost and pending FOMC decisions could sway short-term prices.
• Bitcoin peaked at $43,784 on Tuesday, nearing the $43,800 resistance. Increased Bitcoin ETF inflows outpaced GBTC outflows. Whale holdings rose 4.50%, with 67 new entities holding over 1,000 BTC each. Google's revised crypto ad policy possibly bolstered market sentiment.
• On Wednesday, Bitcoin fluctuated, nearing $43,700 before the FOMC announcement. JPMorgan warned of excessive market optimism. Whales withdrew 100,000 BTC, signaling a market shift. A survey showed 84% of investors expect Bitcoin to exceed its $69,000 high by 2024.
• Post-FOMC, Bitcoin dipped to $42,300 following Powell's remarks, with no imminent rate cuts. The Fed's steady rates and Powell's comments affected risk assets and U.S. equities.
• In January, Bitcoin saw a modest 0.6% gain. On February's first day, it briefly dropped below $42,000, influenced by U.S. bank stock declines and banking crisis fears. However, its price response was less pronounced compared to last year's crisis.
• January 2024 witnessed a 1.53% increase in digital asset AUM to $50.7 billion and a 224% surge in trading volumes to $2.19 billion, spurred by U.S. Bitcoin ETFs. Digital assets strategist Gabor Gurbacs noted spot Bitcoin ETFs' substantial Bitcoin purchases, outdoing miners' production.
• On Friday, Bitcoin showed bullishness around $43,000, rebounding from a $38,500 low on January 23. However, it dropped to $42,700 after the US jobs report showed 353,000 new jobs, keeping unemployment at 3.7%. This strong labor market data spiked the DXY, impacting Bitcoin.
• After a short downside, BTC has been recovered to above $43,000 at the time of writing.
• February 1 saw Bitcoin spot ETFs receive a $38.45 million net inflow. BlackRock's IBIT and ProShares' BITO exceeded GBTC in trading volumes.
• A CryptoQuant analyst noted a rise in stablecoin supply on exchanges, hinting at potential buying pressure for Bitcoin and altcoins. This trend resembles the 2020-2021 bull market, suggesting a possible bull rally in late 2024.

Ethereum:

• Weekly change: +4.43%
• ETH fluctuated from $2253 to $2309 over the weekend.
• On Monday afternoon, ETH fell to $2246 amid low trading volume.
• ETH climbed past $2300, hitting a weekly peak of $2386 on Tuesday. Concurrently, Ethereum's staking market cap soared to $65.45 billion with 29.39 million ETH staked, about 25% of its circulating supply. The Dencun upgrade on Ethereum's Sepolia testnet, post-Goerli activation, progressed well. Market anticipation for the FOMC meeting partly fueled this surge, maintaining ETH above $2300 until Wednesday's announcement.
• Following the FOMC announcement, ETH briefly dipped to $2248, then recovered to stabilize at $2300 until Friday.
• A decision on spot Ethereum ETFs by the SEC is expected by 23 May 2024. While the industry remains hopeful, some speculate potential postponements to 2025 or 2026.
• Ethereum's upcoming Dencun upgrade, scheduled for Feb. 8, will introduce key EIPs like proto-danksharding to cut layer-2 transaction costs. Ethereum core developer Tim Beiko noted on Reddit on Feb. 1 that recent tests of the upgrade were successful.
• Despite positive developments, futures data indicates traders predict Ether will lag behind Bitcoin. Uncertainty over the SEC's classification of ether and preference for Bitcoin among traders, coupled with market makers' hedging and high positive gamma, might limit Ether's upside.

Altcoins:

• Ava Labs detailed a scaling solution, Vryx, aiming for Avalanche to achieve 100,000 TPS.
• XRP saw its highest single-day whale accumulation since Ripple's partial SEC lawsuit victory.
• Orbiter Finance, backed by OKX, launched its own Layer 2 network.
• Coinbase's lobby group reported 18 US senators supporting crypto.
• Stellar Development Foundation postponed Protocol 20 upgrade due to a bug.
• Binance Labs refuted leading a $15M funding round for SkyArk Chronicles.
• OKX initiated inscription support for Atomicals, Stamps, Runes, and Doginals.
• MakerDAO's co-founder sold $4.5 million in MKR, impacting the token's stability.
• TRANSAK teamed up with Visa for global crypto withdrawals in 145 countries.
• dYdX Foundation requested a $30M budget and committed to annual spending reports.
• Polygon-powered Immutable zkEVM mainnet began early access.
• Coinbase implemented fees for USDC to USD conversions exceeding $75 million.
• Starknet collaborated with Celestia on Layer 3 data availability.
• Abracadabra Finance lost an estimated $6.4 million in a security breach, MIM dumped.
• Terraform Labs declared bankruptcy to fund an appeal against the SEC's fraud lawsuit.
• Filecoin added Pyth price feeds to enhance its decentralized storage.
• Worldcoin, founded by Sam Altman, faced an investigation over privacy breaches in Hong Kong.
• Bitfinex Securities commenced operations in El Salvador with plans for US expansion.
• DeFiance Capital won a legal dispute against 3AC in Singapore.
• Coinbase and Ripple donated $25M and $20M, respectively, to the crypto super-PAC Fairshake.
• Bybit submitted a regulatory license application in Hong Kong.
• PEPE's value dropped 35.8% in January after a whale sold 1.731T PEPE for $802.5K.
• The Biden administration initiated an emergency survey on crypto miners' electricity use in the US.
• Polygon Labs cut 19% of its workforce to enhance performance.
• Thai regulator instructed Zipmex to halt digital asset trading and brokerage services.

Ripple Co-Founder's XRP Hack Causes Market Stir

Hackers accessed and drained 213 million XRP from Ripple co-founder Chris Larsen's personal accounts, causing a 4.1% drop in XRP's value. Ripple co-founder's quick action led to the freezing of compromised addresses. Ripple CEO confirmed that no company wallets were compromised. 

About 212.68 million XRP was traced to various crypto exchanges, with $4.2 million frozen on Binance. Ripple returned 800 million XRP, worth $404.86 million, to its accounts after unusual transfer activity and plans to conclude XRP escrow transactions by April 2027. The market showed resilience despite the breach, with XRP stabilizing soon afterward.  

Binance Overcomes Legal Hurdles and Market Dominance

Binance faced a lawsuit over allegations of facilitating financial transactions for Hamas. A GitHub leak exposed sensitive internal information, prompting a takedown request. Nonetheless, Binance launched an Inscriptions Marketplace and regained market dominance after a settlement with the U.S. DoJ. It overcame regulatory challenges and underwent leadership changes. 

Despite difficulties in the U.K. market, its trading volume reached $3.8 trillion. Binance held 43.7% of the market share, facing competition from Upbit and OKX. It also saw a surge in spot trading volume and made significant strides in the crypto landscape.  

Jupiter's JUP Token: A Volatile Crypto Journey

Jupiter's JUP token enjoyed a soaring launch, only to plummet over 63%, sparking community debate. Allegations of mismanagement were leveled, including excessive token allocation to the team and hasty liquidity withdrawal. The founder defended against these claims while facing criticism for the airdrop's perceived similarity to a token sale. 

JUP's market cap surged to $914 million initially, with a rollercoaster trading price. The airdrop, distributing 1 billion JUP tokens, ranked among the largest in crypto history. Despite hurdles, JUP garnered significant trading volumes and holders, boasting a $6.8 billion fully diluted value. Its broad offerings positioned it as a comprehensive ecosystem player.  

Hong Kong Tightens Crypto Regulations Amidst Market Changes

Hong Kong's SFC advises caution on Floki Inu's high staking yields, prompting swift user protection measures. Floki Inu, leveraging TokenFi's $TOKEN, defends its unique APY mechanism but suspends Hong Kong staking and marketing activities. Globally, regulatory bodies intensify oversight on crypto yields, amid declining staking profits and the complexity of niche protocols using leverage. 

Concurrently, OSL and HashKey lead Hong Kong's crypto insurance mandates, covering 50-95% of user assets, with licenses prized and a queue of 13 entities seeking approval. Hong Kong further tightens OTC trading regulations and embraces spot crypto ETFs, signifying a dynamic market and potential fee structure implications for asset managers.  

Global Crypto Seizures Spotlight Regulatory Enforcement

Recent law enforcement actions resulted in substantial global cryptocurrency seizures. The U.S. DOJ charged three individuals in a $1.89 billion HyperFund fraud scheme. The DEA seized $150 million in crypto from an illegal narcotics network on the dark web, operated by Banmeet Singh, who pleaded guilty to drug distribution and money laundering. 

German authorities confiscated a record $2.17 billion in Bitcoin from a piracy website, while the UK police seized nearly $1.8 billion of Bitcoin linked to a Chinese investment fraud.

FTX Abandons Revival, Faces Legal and Financial Woes

FTX, the collapsed cryptocurrency exchange, abandons revival plans due to insufficient investment capital. Users to be refunded based on November 2022 asset values, when it was below $18,000, sparking discontent amidst Bitcoin's substantial rise. Department of Justice charges three individuals for a $400 million SIM-swapping hack targeting FTX. 

Bankruptcy claims against FTX surpass $2 quintillion. Executives found guilty of federal crimes including misusing customer deposits and incurring immense debts through Alameda Research. Millions of users and corporate counterparties were affected.  

Celsius Network's Bankruptcy Exit and New Ventures

After an 18-month bankruptcy, Celsius Network began distributing $3 billion to creditors, converting altcoins to Bitcoin and Ethereum. 98% of account holders approved the plan involving cryptocurrencies and fiat. This led to the formation of Ionic Digital, a Bitcoin mining entity, co-owned by creditors and managed by Hut 8. Celsius liquidated a significant portion of its Ethereum, transferring 18,000 ETH to Coinbase, to expedite payouts. 

Ionic is taking over Celsius' mining assets, totaling 87MW self-mining capacity and 142MW hosted Bitcoin mining. Ionic operates at 6 EH/s, aiming for 12.7 EH/s and plans to go public, with creditors becoming shareholders. Hut 8 will manage Ionic's mining operations.  

Genesis Settles with SEC Amid Bankruptcy Proceedings

Genesis Global Holdco settled with the SEC for $21 million over unregistered securities sales through its Gemini Earn lending program. The settlement, amid ongoing bankruptcy, prioritizes creditors. The legal resolution addresses Genesis's financial distress and emphasizes the need for compliance with securities laws. 

The SEC's lawsuit alleged unregistered securities sales to U.S. retail investors between February 2021 and November 2022. The settlement, filed with the U.S. Bankruptcy Court for the Southern District of New York, aims to facilitate Genesis's recovery and underscores the importance of regulatory compliance in the volatile crypto market.  

Open Exchange Closes Due to Legal and Market Challenges

The Open Exchange (OPNX) is closing in February 2024 due to legal challenges stemming from the collapse of Three Arrows Capital in 2022. Teneo aims to recover $1.3 billion. OPNX faced regulatory fines and struggled with a peak trading volume of $624,093. Mark Lamb, the CEO, is embroiled in legal issues. The associated OX token's value dropped by nearly 40%, along with CoinFLEX's FLEX token. 

Founders Kyle Davies and Su Zhu are advising Ox.Fun after FTX's recovery announcement. OPNX's closure is attributed to the FTX bankruptcy process reaching a "recovery" stage, as stated by Zhu. OPNX users must settle positions by February 7 and withdraw funds by February 14.  

Top Weekly Altcoin Gainers and Losers

Gainers:

Ronin RON (+42.42%) 

Chainlink LINK (+36.34%) 

Bittensor TAO (+30.79%) 

Render Token RNDR (+27.06%) 

Sui SUI (+26.79%) 

Losers:

Bonk BONK (-5.57%) 

Chiliz CHZ (-5.50%) 

Maker MKR (-4.52%) 

Mantle MNT (-4.42%) 

Lido DAO Token LDO (-4.11%)