Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | November 25 - December 1, 2023

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

Bitcoin:

• Weekly change: +3.84%
• BTC began the week over $37,500, fell to a low of $36,850, then recovered to $37,000, despite 83.6% BTC in profit since November 2021, amid US stock pullbacks and forthcoming US GDP and inflation data.
• Standard Chartered and Fundstrat predicted Bitcoin could reach $120,000-$200,000 by 2024.
• Crypto saw the largest fund inflows since 2021, with Bitcoin ETF expectations driving $312M into Bitcoin products, and total AUM hitting an 18-month high, according to CoinShares.
• Following dovish comments from Fed's Waller, BTC surged past $38,000 on Tuesday. Meanwhile, Brazilian spot Bitcoin ETFs amassed $96.8 million in AUM, showing rising institutional interest.
• The SEC sought public feedback on proposed spot bitcoin ETFs from Franklin Templeton and Hashdex.
• US GDP grew 5.2% in Q3 2023, beating estimates. Bitcoin fluctuated around $38,000 during the announcement, then fell to $37,800. Traders took profits, and wallet growth over 0 BTC slowed.
• MicroStrategy purchased 16,130 BTC for approximately $608 million in November, increasing its holdings by 10% to 174,530 BTC.
• BTC fluctuated between $37,600 and $38,000 following MicroStrategy's purchase news.
• ProShares Bitcoin ETF's investor interest surged as it reached $1.47B, becoming the world's largest Bitcoin futures ETF.
• Bitcoin long futures open interest by asset managers reached a record high amid Federal Reserve concerns.
• BTC ended November with an 8.81% gain, an improvement from previous years' losses.
• On Friday, Bitcoin hit a 19-month high of $38,800, driven by institutional demand and a 35% rise since mid-October. This coincided with a 70 basis point drop in the U.S. 10-year Treasury yield to 4.3%.
• Recent months witnessed a DeFi and NFT market revival, possibly due to anticipated U.S.-listed spot bitcoin ETF approval, as JPMorgan suggests.
• A mysterious Bitcoin address accumulated over $450 million in BTC, speculated as an exchange's cold storage move or a large BitMEX whale.
• Over $1.4 billion worth of BTC was withdrawn from exchanges since November 17, signaling a bullish outlook, according to Glassnode.
• Over $1.13 billion in Bitcoin options and 230,000 Ethereum contracts are set to expire, with Bitcoin's max pain price around $37,000.
• Fed Chair Powell expressed readiness for further policy tightening, acknowledging progress in reducing inflation but highlighting economic uncertainties.
• Bitfinex traders closed 12,000 BTC longs in a week, decreasing total long positions to 80,000 BTC, signaling short-term bearishness but overall bullish sentiment among whales.

Ethereum:

• Weekly change: +1.44%
• ETH remained stable this week while BTC gained prominence.
• Its monthly growth outperformed BTC with a 13.01% rise and a 60% increase YTD.
• The week started with ETH dropping below $2,000.
• Ethereum's value declined on Tuesday amid regulatory concerns and reduced DApp usage.
• Despite positive news like Forbes' Ethereum Blockchain-based Under 30 List, the price continued to fall.
• A significant sale occurred Wednesday, with an early investor offloading 3,000 ETH for a 660,000% profit, as ETH fluctuated around $2,000.
• On Thursday, ETH's price briefly rose from $2,030 to almost $2,100. A whale transaction of 3,150 ETH at around $2,023 triggered sell-off speculations.
• Ethereum staking saw a slowdown, with validator growth declining and a drop in daily ETH issuance. Daily, 1,018 validators exited, marking the first dip in Total Effective Balance post-update. The majority of exits were voluntary, coinciding with fewer unique addresses holding at least 32 ETH.
• ETH surpassed $2,100 on Friday amid the SEC's request for public input on Fidelity's Ethereum ETF application.
• Rep. Tom Emmer criticized the Treasury's crypto regulation proposal, warning against excessive surveillance.

Altcoins:

• Inferno Drainer ceased operations after allegedly stealing $70M in cryptocurrencies.
• Circle and SBI Holdings collaborated to increase USDC's presence in Japan.
• Hong Kong initiated investigations into a supposed $15.4 million crypto fraud by Hounax.
• $750 million in locked crypto tokens were set for release by December.
• dYdX Chain finalized its mainnet migration, introducing $20 million in DYDX token rewards.
• Some EVM chains witnessed over 1000% increase in transaction counts since mid-November.
• MAGIC EDEN debuted its cross-chain wallet for NFTs and crypto.
• Chainlink enhanced its staking mechanism, introducing a 45 million LINK pool.
• Velodrome and Aerodrome DEXs confirmed fund security post-frontend hack.
• Uniswap DAO sanctioned a 10 million UNI delegation to active voters.
• Genesis reached a repayment agreement with parent company DCG, concluding a $620M lawsuit.
• Zipmex, facing difficulties, proposed repaying creditors at 3.35 cents on the dollar.
• The UK planned to impose penalties on crypto users for unpaid taxes.
• Iota set up a $100M foundation in Abu Dhabi, aiming for Middle Eastern expansion.
• Republic announced plans to list a profit-sharing digital security token on INX.
• Wormhole secured $225M funding at a $2.5B valuation.
• Rarible’s RARI Foundation chose Arbitrum for its royalty-embedded EVM chain.
• Celsius allowed withdrawals for eligible crypto holders.
• FTX sought court permission to reduce the IRS's $24B claim to zero, also gaining approval to sell $873M in trust assets.
• Brazil announced a 15% tax on crypto transactions with overseas exchanges starting in 2024.
• Binance initiated a pilot program for bank-managed collateral to minimize investor risk.
• Injective's (INJ) price rose 10% after OKX listing and a $65,000 token burn.
• The United Nations partnered with Algorand for Web3 education programs for its staff.
• Ripple faced an ongoing legal struggle with the SEC, with rumors of a potential early settlement.
• Reddit's r/cryptocurrency subreddit transferred control of the Moons token contract, leading to a surge in MOON.
• Bitget ceased registrations in China and hinted at a major upcoming announcement.

Pando Asset Joins U.S. Bitcoin ETF Race

2023 sees Pando Asset, a Swiss firm, stepping into the U.S. spot Bitcoin ETF race with its Pando Asset Spot Bitcoin Trust, joining heavyweights like BlackRock, ARK Invest, and Grayscale. BlackRock has proposed an innovative ETF model to the SEC, involving offshore entities and U.S. broker-dealers, to address regulatory concerns. 

Meanwhile, Grayscale is transforming its Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF, a significant update since 2018, aiming for operational efficiencies and cost-effectiveness. ProShares' Bitcoin Strategy ETF (BITO) has hit a new high with $1.47 billion in Assets Under Management (AUM), indicating strong institutional interest in bitcoin. 

Ark Invest and 21Shares await the SEC's decision on their Ark 21Shares Bitcoin ETF (ARKB), potentially reshaping the Bitcoin ETF market. The industry is on the edge, anticipating the SEC's decision on ARKB, which could mark a turning point for Bitcoin ETFs and their integration into traditional finance.

Crypto VC Funding Hits $1.75 Billion in November

In November, crypto VC funding surged to $1.75B, a $1B increase from October, as per Messari. Two Bitcoin mining companies, Northern Data and Phoenix Group, raised over half of this total, with Northern Data securing $600M and Phoenix Group $370M. Notable fundings include Blockchain.com's $110M Series E and Blast's $20M raise. 

Excluding the massive mining company raises, the average monthly funding remained around $750M, consistent with post-August levels. The average deal size saw a 50% spike, signaling optimism amid concerns about the Bitcoin halving's impact on miners' profitability. Miners dominated infrastructure sector deals, while exchanges and payment projects led in the financial sector.  

Terra Ecosystem's Remarkable Recovery

The Terra ecosystem, encompassing LUNA, LUNC, and USTC, experienced a remarkable recovery. LUNA's value jumped by 23.43%, trading near $0.85, while LUNC saw a 48.38% increase, reaching $0.00012. 

This surge followed Terraform Labs' $15 million investment into Terra's DeFi ecosystem, impacting 11 LUNA pools on DEXs Astroport and Ura. USTC also made significant gains, rising over 278% in 24 hours to $0.07319, with a market cap of $1.46 trillion and a trading volume of $69.21 billion. 

Terra Classic Labs' acquisition of 25.6 million USTC for $500,000 played a key role in this surge. Community efforts further boosted LUNC and USTC, with over 78.58 billion LUNC tokens burned and a pause in USTC minting. Binance Futures listed USTC, offering up to 50x leverage on trades. 

Binance's Legal Woes and Market Presence

Binance has faced several legal challenges. The Philippines SEC warned Binance for operating without a license, risking access blockage and criminal charges for promoters. Binance's Thailand expansion, through Gulf Binance, is under scrutiny following legal issues with founder Changpeng Zhao and the US DOJ. Cristiano Ronaldo faces a lawsuit for promoting unregistered securities with Binance. 

Binance plans to cease BUSD stablecoin support by December 2023, with significant market cap reduction. Despite a $4.3 billion DOJ settlement affecting its market share and BNB token value, Binance remains a key player in the crypto market. The SEC is investigating Binance.US and Zhao for possible fraud, despite their guilty pleas to the DOJ. 

Circle Addresses Alleged Ties in Senatorial Letter

Circle denies alleged ties to Justin Sun and Hamas in a letter to Senator Elizabeth Warren and Chairman Sherrod Brown. The letter addresses claims made by the Campaign for Accountability and clarifies that neither Justin Sun nor entities he owns or controls currently have accounts with Circle. Circle terminated all accounts held by Mr. Sun and his affiliated companies in February 2023. 

The letter also references the US Securities and Exchange Commission's lawsuit against Sun for allegedly selling securities. Additionally, it mentions the Biden Administration's push to address crypto-financed terrorism, based on a Wall Street Journal report on Hamas using crypto, refuted by Elliptic.  

Cosmos Hub Proposes ATOM Inflation Reduction

The Cosmos Hub approved a proposal to cut ATOM's inflation from 14% to 10%, aiming to boost security and sustainability, though reducing staking yields from 19% to 13.4%. The decision, narrowly passed, indicates a community split. Critics argue it could harm smaller validators, while supporters see it as necessary for DeFi integration. 

In response, Cosmos co-founder Jae Kwon proposes a network fork, AtomOne, maintaining the original 20% inflation rate and introducing new governance. This fork could lead to a significant ATOM airdrop, reflecting the ongoing evolution and challenges in blockchain governance and ecosystem sustainability.

Polygon's Network Developments and Challenges

Polygon's network has seen contrasting developments. DraftKings, a sports-betting firm, was part of a secret deal with Polygon in 2022, receiving millions in MATIC tokens for validator services. Despite this, DraftKings failed as a validator and was removed. 

Meanwhile, Polygon's network activity surged, with a notable increase in active addresses and transaction volume. However, this growth is marred by suspicions of internal buying pressure rather than organic demand, casting doubts on MATIC's value rise. Despite the negative sentiment, there's potential for MATIC's price recovery, possibly reaching $0.80.

Starknet's Potential STRK Token Airdrop

Starknet, an Ethereum Layer 2 network, recently gained attention due to a leaked screenshot from a deleted subdomain, revealing eligibility for an upcoming STRK token airdrop. The criteria included Starknet and GitHub developers, early Ethereum adopters, and Starkex users before June 2022. 

The STRK token, deployed in November 2022, has 50M of its 10B supply reserved for early community members, unlockable from April 2024. Despite the buzz, a Starknet delegate suggested the airdrop might not be imminent. Starknet ranks as the third most active Layer 2 network, with a current total value locked of $169M.

KyberSwap's $47 Million Hack Incident

KyberSwap, a decentralized exchange, suffered a $47 million hack exploiting liquidity management vulnerabilities. The hacker demanded full control over KyberSwap and its assets, setting a December 10th deadline. In response, KyberSwap recovered $5.7 million by negotiating with front-run bot operators, offering a 10% bounty. 

They are enhancing security and collaborating with law enforcement to prevent future attacks. This incident is part of a worrying trend in the crypto world, with $3.7 billion lost to cyber attacks in 2022, marking a significant increase from the previous year.

Crypto Hacks Surge to $350 Million in November

In November, crypto hacks surged with $350 million stolen, marking the second-largest month this year, as reported by blockchain security firm Peckshield. Justin Sun's projects, including Poloniex, HTX, and Heco Bridge, accounted for nearly 70% of the total stolen funds. Sun's platforms suffered over $236 million in losses, with Poloniex experiencing a $100 million hack. 

Other major exploited projects included KyberSwap, Kronos Research, dYdX, Raft Protocol, and Onyx Protocol. Amid the breaches, Sun announced plans to compensate affected users. Additionally, a single victim lost $27 million to a phishing attack.  

Top Weekly Altcoin Gainers and Losers

Gainers:

Terra Classic LUNC (+92.40%)

WEMIX WEMIX (+27.13%)

Celestia TIA (+25.22%)

IOTA MIOTA (+24.92%)

Sei SEI (+21.84%)

Losers:

Klaytn KLAY (-12.49%)

Optimism OP (-10.12%)

Gas GAS (-9.55%)

Radix XRD (-8.99%)

Lido DAO Token LDO (-7.15%)