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Surge in BNB Chain activity backs 11% rally, but can BNB push above $300?
Binance Coin, the native token of BSC Chain took a different direction from the wider cryptocurrency market on Dec. 26 by surging 11% to reach its highest level in six months. Although BNB initially struggled to break the $300 resistance, the rally successfully closed the market capitalization gap opened by Solana
Before Dec. 23, BNB held the position of the third-largest cryptocurrency (excluding stablecoins). However, SOL's impressive 50% gains over seven days changed that. The question now is whether BNB can maintain a market cap exceeding $46 billion to regain its third spot. Both BSC Chain and Solana, despite their decentralization merits, offer fast and cost-effective blockchains that don't exclusively rely on layer-2 scaling solutions.
A significant portion of BNB token's value comes from reduced trading fees and exclusive launchpad offers and services from Binance. Investors initially feared that the exchange would lose market share swiftly after its founder, Changpeng 'CZ' Zhao, pleaded guilty to U.S. Federal charges on November 21. However, this was not the case, at least until the trial concludes and Binance is required to report all trades to a watchdog designated by the Justice Department. Furthermore, Binance's recent engagement with the U.S. Commodity Futures Trading Commission (CFTC) on Dec. 18 further decreased the risk of regulatory shutdown.
Nonetheless, BNB faces selling pressure due to the significant concentration of ownership among Binance's founders and team. The lack of transparency regarding the initial distribution of BNB tokens eroded investor trust, especially after the exchange altered its token burn mechanism over the years. In essence, the initial commitment to buybacks using proceeds from Binance's exchange was replaced by a simple burn mechanism.
Uptick in DApp transactions and volume backs BNB price move
Various valuation models for the BNB token can be created, but none can accurately explain how most market participants assess its benefits and risks. Nevertheless, it is worthwhile to compare how the network performs against competing chains. The effective use of decentralized applications (DApps) on the BNB Smart Chain indicates the demand for the BNB token. Besides Binance's products and offerings, the value of the BNB token largely hinges on its use within the BSC Chain.
BSC Chain currently holds $3.6 billion in total value locked (TVL), which is the sum of deposits in its smart contracts, representing less than 13% of Ethereum's $28.2 billion. More significantly, it falls short of the $4.6 billion held by Ethereum's top scaling solutions, namely Arbitrum, Optimism, Polygon, and Base. While BSC Chain's TVL increased by 25% in the past 30 days, other incumbents like Solana and Avalanche gained 142% and 50%, respectively, during the same period.
When analyzing networks focused on DApp execution, volume should be a primary consideration, along with the number of addresses involved with smart contracts, serving as a proxy for user numbers.
Notice that Ethereum and its layer-2 scaling solutions remain unchallenged in terms of volume, accumulating over $46.4 billion in the past 30 days, with Ethereum's base layer responsible for 73% of that volume. In contrast, BSC Chain amassed $4.7 billion in volumes over the same period, representing a mere 6% increase from the previous month. However, when accounting for active unique addresses (UAW), BSC Chain, Solana, and zkSync Era lead the way. This raises questions about whether those numbers accurately represent the truth.
From a relative standpoint, BSC Chain's 7% growth in the number of addresses engaging with DApps in 30 days is concerning, especially when compared to Ethereum's 12% increase during the same period.
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Tether mints $1B USDT for ‘inventory replenish’ — CEO Paolo Ardoino
Tether, the operator of the world’s largest stablecoin, the eponymous Tether, has minted another billion USDT, which is “authorized but not issued,” according to CEO Paolo Ardoino.
Blockchain tracking platform Whale Alert took to X (formerly Twitter) on Dec. 25 to alert users that Tether Treasury had minted one billion USDT ($1 billion).
Tether CEO Ardoino subsequently responded with a public service announcement in the Whale Alert’s X thread, stating that the transaction was an “inventory replenish” on the Ethereum blockchain.
“Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps,” Ardoino stated.
In traditional finance, inventory replenishment is the process of ordering stock from suppliers in time to meet customer demand and avoid stock shortages without stockpiling surplus inventory. In Tether’s terms, inventory replenishment is the process of creating new USDT that are stored in Tether’s treasury inventory as “authorized but not issued” USDT.
“These tokens are not part of the total market capitalization of USDT, as they have not been issued or released into circulation yet,” Tether’s FAQ reads.
According to data from the Tether Transparency page, $925 million in USDT is “authorized but not issued” on Ethereum as of Dec. 26, 2023.
Ardoino’s latest PSA echoes the language of a previous one billion USDT mint in September 2023, when Whale Alert flagged a similar transaction. On that occasion, Ardoino also said that the USDT transaction was an authorization and not an actual issuance, with the allocated amount set to serve as inventory for upcoming issuance requests and chain swaps on the Tron network.
Some online industry watchers have expressed skepticism about Ardoino’s latest PSA and lack of transparency associated with Tether’s authorized but not issued transactions.
“It would be interesting to examine the document or agreement and learn more about the individuals responsible for this Christmas miracle of creating 1 billion USDTs of thin air,” one commenter wrote, asking whether Ardoino is one of the individuals responsible for such decisions.
Some skeptics also argued that the latest USDT mint will likely be used to increase the price of Bitcoin, as some industry observers have linked Tether’s USDT minting to BTC price pumping.
“Say it directly you minted it to pump BTC,” one commenter responded in the thread.
Tether has posted significant growth over the past year, with its market capitalization hitting new all-time highs through 2023. Since January, Tether’s market value has increased nearly 38%, surging from $66 billion to $91 billion, according to data from CoinGecko. At the time of writing, Bitcoin is trading at $42,760, down about 2% over the past 24 hours.
In November 2023, Tether attributed USDT’s growth to two main reasons, with one being the continued market excitement around the possible approval of a spot Bitcoin exchange-traded fund. The firm has been actively moving into Bitcoin-related activity this year, disclosing plans to start buying Bitcoin to manage its reserves and launching multiple BTC mining operations.
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Bitcoin hash rate hits new peak, but profitability tumbles
Bitcoin network computing power — or mining hash rate — reached a new all-time high on Christmas day, but has put putting more pressure on miners amid a slump in profitability.
On Dec. 25, Bitcoin’s hash rate reached an all-time high of 544 exahashes per second (EH/s), accordingto Blockchain.com. The data was confirmed by Bitinfocharts, which reported an average hash rate peak over the weekend.
It comes as network hash rates have more than doubled this year, climbing 130% since January.
Over the same period that BTC hash rates have increased, the asset’s price has virtually mirrored the chart, climbing more than 150% since Jan. 1, 2023.
Reflexivity Research co-founder Will Clemente looked at the hash rate on a logarithmic scale commenting, "The summer 2021 China mining ban is barely a blip," said Clemente. "Imagine fading the most secure decentralized open-source monetary network on the planet, couldn't be me."
A high hash rate may be nice for theoretical price models such as implied hash-adjusted price, but it is not good news for miners who must work harder to secure the next block.
Hash price, a measure of profitability, has fallen over the past week as the BRC-20 ordinal inscription craze cooled. Hash price is currently $0.09 per terahashes per second per day, according to HashrateIndex.
Profitability has fallen 34% since its 2023 high of $0.136/TH/s/day on Dec. 17. Hash price often spikes during elevated demand, causing high transaction fees, such as during the recent inscriptions frenzy.
“We’re approaching almost an entire year without fully clearing Bitcoin mempools, having sustained elevated fee pressure since Feb,” observedGlassnode analyst “Checkmatey.”
Network hash rates first passed the milestone 500 EH/s figure in late November, as reported.
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BlackRock to Inject $10 Million Into Seed Fund for Upcoming Spot Bitcoin ETF
BlackRock plans to invest $10 million into a seed fund for its proposed spot Bitcoin exchange-traded fund (ETF). This financial commitment is part of the firm’s preparations for the ETF’s anticipated launch, pending regulatory approval from the Securities and Exchange Commission (SEC).
According to Bloomberg Intelligence ETF analyst James Seyffart, the world’s largest asset manager BlackRock has submitted an updated S-1 filing with the SEC for their Bitcoin ETF. The amended filing included details regarding BlackRock’s movement prior to the Bitcoin ETF’s pending approval, aiming to inject $10 million into a seed fund.
BlackRock Advances With Seed Fund
“On January 3, 2024, the Seed Shares were redeemed for cash and the Seed Capitol Investor purchased the Seed Creation Baskets, comprising of 400,000 Shares at a pre-share price of $25.00,” detailed the filing.
“Total proceeds to the Trust from the sale of the Seed Creation Baskets were $10,000,000,” wrote the filing. “The Trust purchased [ ] bitcoin at the price of $[ ] per bitcoin with the proceeds of the Seed Creation Basket on January 3, 2024.”
Though the seed movements “do not mean launch,” according to Seyffart, BlackRock’s seed round plan for the Bitcoin ETF would still “obviously jive with our Jan. approval prediction.”
It was also emphasized that even not yet named, the Authorized Participants will not be handling Bitcoin directly but only cash.
“The Authorized Participants will deliver only cash to create Shares and will receive only cash when redeeming Shares,” according to a post by Bloomberg analyst Eric Balchunas. “Further, Authorized Participants will not directly or indirectly purchase, hold, deliver, or receive bitcoin as part of the creation or redemption process.”
Bitcoin ETF Could “Completely Destroy” Bitcoin: Arthur Hayes
While major financial establishments like BlackRock, Fidelity, and Grayscale are actively planning and revising their Bitcoin ETF applications, Arthur Hayes, co-founder and former CEO of BitMEX, raised significant concerns about their potential impact on Bitcoin in a recent blog post.
“Imagine a future where the largest Western and Chinese asset managers hold all the Bitcoin in circulation,” said Hayes. “Now that a handful of firms hold all the Bitcoin, and have no actual use for the Bitcoin blockchain, the coins never move again.”
“People purchase Bitcoin ETF derivatives rather than buying and holding Bitcoin in self-custodied wallets,” said Hayes. “The end result is miners turn off their machines as they can no longer pay for the energy required to run them. Bye-bye, Bitcoin!”
In conclusion, if the traditional financial institutions’ spot Bitcoin ETFs get “too successful,” “they will completely destroy Bitcoin,” according to Hayes.
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3 reasons why Ether (ETH) could rally above $2,500
Ethereum network DApp volumes and protocol fees
Rather than attempting to predict the future, which is a challenging task in the fast-paced cryptocurrency industry, it’s more prudent to analyze recent trends influencing the demand for Ether using decentralized applications (DApps) activity as an indicator. One can start by examining DApp volumes, as some sectors do not require a large total value locked (TVL), such as nonfungible token marketplaces, games, layer-2 bridges and social networks.
Ethereum DApp volumes reached $27.8 billion in the last seven days, marking a 14.2% increase on the previous week. This growth was driven by a 21% gain in Uniswap and a 52% gain in Balancer volumes. In contrast, BNB Chain’s volumes for the same period stood at $4.5 billion, while Arbitrum amassed another $5 billion. Most notably, Ethereum was the only blockchain among the top six to experience a volume increase in the past seven days.
To provide some perspective, Solana would need to increase by 12 times to reach half of Ethereum DApps’ current transaction volume. In general, 20% of users account for 80% of the volume, which holds for DApps. Given Ethereum’s first-mover advantage and substantial treasury for ecosystem development support, the odds do not favor a flipping in the short to medium term.
Furthermore, no other blockchain can match Ethereum’s protocol, which generated $95.4 million in fees in the last seven days, excluding Bitcoin, which is not a direct competitor in the DApp ecosystem. Aside from incentivizing network security, this data indicates significant potential for increased activity following future updates, including ’DenCun’ scheduled for January, which aims to enhance processing capacity and reduce costs.
Ethereum spot ETF approval is not priced in according to derivatives markets
The eventual approval of the Ether spot ETF will set Ether apart from other cryptocurrencies in terms of regulation. Competitors have only been nominally mentioned by regulators in recent court cases against exchanges, which face charges for offering securities brokerage and services without proper registration.
Finally, investors should assess the positioning of Ether derivatives traders, especially large investors and market makers. The Ether futures premium, measuring the difference between two-month contracts and the spot price, has reached its highest level in over a year. In a healthy market, the annualized premium, or basis rate, typically falls within the 5% to 10% range.
The current 13.5% Ether futures annualized premium suggests that traders are not taking the spot Ether ETF approval for granted. During widespread excitement, this indicator tends to exceed 20%, driven by increased demand for leveraged long positions, causing price distortions relative to the spot market. This data implies the potential for a positive price impact in case of approval, whether in January or March.
Based on Ethereum’s network activity, Ether investors should not yield to the pressure from contenders gaining momentum, at least not until these contenders pose a genuine threat in terms of volumes and deposits. Furthermore, the ETH derivatives indicator provides clear guidance that professional traders are bullish despite Ether’s price nearing its highest level since May 2022. This suggests that investors are confident in Ether’s ability to break above $2,500.
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Judge orders Craig Wright to pay over $1M, accepts new evidence over Satoshi’s identity
The legal battle over Satoshi Nakamoto’s identity and Bitcoin rights has taken another turn in recent days, with a British judge rescheduling the trial between Craig Wright and Bitcoin Core developers for Feb. 5.
In 2016, Wright claimed to be Satoshi Nakamoto, the inventor of Bitcoin (BTC), and sued 13 Bitcoin Core developers and a group of companies, including Blockstream, Coinbase, and Block, alleging violations of his copyright to Bitcoin's white paper, Bitcoin file format, and Bitcoin blockchain database. The group is represented in the case by the non-profit Cryptocurrency Open Patent Alliance (COPA).
On Dec. 15, during a pre-trial review, Justice Edward James Mellor allowed Wright to submit an additional 97 documents supporting his claim. The documents were allegedly found in two USB drives discovered in a drawer at his house in September, which included LaTex files — the open-source document preparation system used to draft the Bitcoin white paper.
Bitcoin developers accused Wright of fabricating evidence, forging and manipulating metadata, and purposefully prolonging the proceedings. According to them, the new documents only came to light after they filed 50 pieces of evidence to prove that Wright’s previously filed materials were forged.
Justice Mellor also granted the developers a second security application, ordering Wright to pay by Jan. 5 an additional 800,000 pounds (~$1 million) to cover the developers' legal costs in the event he loses the trial. Wright already deposited 100,000 pounds ($127,000) as a security payment.
In addition, the judge ordered Wright to pay 65,000 pounds ($82,000) to cover COPA’s costs for expert evidence related to his Autism Spectrum Disorder (ASD). Wright claimed he has a disability due to ASD and produced a report outlining adjustments needed for him in the trial, including the list of all cross-examination questions. In cross-examination, the opposing party asks questions to clarify or discredit a witness' testimony.
Wright’s request was challenged by the developers, who hired an expert to support their claims. As a result, Wright will only be able to access LiveNote Screen and write questions on paper during the trial.
The Bitcoin code is open-sourced and freely distributed under the Massachusetts Institute of Technology license, allowing users to reuse it for any purpose, including proprietary applications. In his argument, Wright contends that Bitcoin Core developers are a “Bitcoin Partnership,” which is alleged to control Bitcoin.
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El Salvador Passes Law to Offer Citizenship to Foreign Bitcoin Investors
El Salvador‘s Congress has passed a new law enabling foreign citizens to obtain citizenship by investing in Bitcoin, according to Reuters.
On Dec. 21, the Salvadoran unicameral legislature, dominated by President Nayib Bukele‘s New Ideas party, voted in favor of the new citizenship law. Conducted during a late-night session, the vote garnered significant support, paving the way for the swift enactment of the policy.
New Citizenship Law for Bitcoin Investors
The newly approved law grants expedited citizenship to foreign investors who make Bitcoin “donations” towards El Salvador’s social and economic development programs. This approach is part of a broader strategy to attract foreign investment and bolster the nation’s economy. The law notably omits a minimum donation requirement, making it accessible to a wide range of investors.
Furthermore, the law simplifies the naturalization process for non-Spanish-speaking investors, waiving the typical five-year residency requirement. Instead, individuals who invest in Bitcoin can gain citizenship more rapidly, a move that aligns with El Salvador’s pioneering adoption of Bitcoin as legal tender in 2021.
The reform emphasizes the significance of President Bukele’s development initiatives, specifically mentioning the role of “altruistic foreigners interested in supporting the economic, social and cultural development of El Salvador … by donating bitcoin.”
El Salvador Sees Financial Gains from Bitcoin Investments
On Dec. 4, President Bukele announced that El Salvador’s Bitcoin strategy has paid off, with the nation realizing a profit of $3.6 million. This profit comes as Bitcoin’s price surged above El Salvador’s average purchase price, marking a significant turnaround from previously reported paper losses.
“Our BTC investments are in the black!” announced President Bukele in a post.
President Bukele has made it clear that despite the current profits, El Salvador has no plans to liquidate its Bitcoin holdings. Emphasizing a long-term strategy, Bukele said, “We have no intention of selling… that has never been our objective.”
The pioneering move to adopt Bitcoin as legal tender in 2021 reflects Bukele’s vision of leveraging cryptocurrency for economic growth and autonomy. With Bitcoin’s integration into the country’s economy, Bukele envisions a future where El Salvador, and potentially other South American nations, can lessen their reliance on traditional, inflation-susceptible currencies like the U.S. dollar.
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‘In Argentina, contracts can be settled in Bitcoin’ — foreign minister
Diana Mondino, the Minister of Foreign Affairs, International Trade and Worship of Argentina, has claimed that a decree legalizing the use of certain currencies in contracts and for payments would apply to Bitcoin.
In a Dec. 21 post on X (formerly Twitter), Mondino said that a decree seemingly aimed at economic reform and deregulation would allow the use of BTC and other cryptocurrencies in the country under certain conditions. The ‘Bases for the Reconstruction of the Argentine Economy’ decree, passed on Dec. 20, did not specifically mention crypto but included provisions that debtors had the choice to pay in currencies not recognized as legal tender in Argentina.
“We ratify and confirm that in Argentina contracts can be settled in Bitcoin,” said Mondino. “And also any other crypto.”
According to Mondino, the decree would also allow for settling contracts using liters of milk or steers. Other provisions within the decree give individuals the freedom to choose the type of currency used — largely referring to foreign currencies but not explicitly denying crypto.
“The parties have the liberty to specify the amounts and the type of currency used for the bond or security deposit, as well as the method for its reimbursement upon the lease’s conclusion,” said Article 1196 of the decree.
Argentine President Javier Milei appointed Mondino as the foreign minister following his election victoryagainst then-finance minister Sergio Massa. Many in the space saw Milei’s win as a positive sign for crypto adoption in Argentina.
Milei came into power amid pressing inflation across the country. The economic decree followed his first national address, detailing measures to address some of Argentina’s economic concerns. The president tweeted, “Long live fucking freedom,” in reference to its passage.
The Argentine President once referred to Bitcoin as a movement toward “the return of money to its original creator, the private sector.” Since taking office, he has not publicly spoken on digital assets.
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Stablecoin laws: Only six countries had legislation in place in 2023
The industry of stablecoins — or cryptocurrencies like Tether and USDC — has seen impressive growth over the past year, with the market value hitting new all-time highs in 2023. Despite this rapid expansion, only a few countries have started regulating the market, according to a new report.
Only six countries had stablecoin legislation or regulation in place in 2023, according to the PwC Global Crypto Regulation Report 2023 published on Dec. 19. These countries are The Bahamas, The Cayman Islands, Gibraltar, Japan, Mauritius and Switzerland, according to the PwC’s analysis and regulatory assessment.
The countries that enacted stablecoin laws have also enforced all the other reviewed regulations, including a crypto regulatory framework, Anti-Money Laundering (AML) rules and the Financial Action Task Force’s Travel Rule, the report notes.
In its new crypto regulation report, the professional services firm assessed the status of crypto regulations in 35 countries, including the United States and the United Kingdom. According to PwC’s analysis, countries like the United States and the United Kingdom have yet to finalize legislation for stablecoins and develop a regulatory framework for cryptocurrencies.
According to the report, 40% of the analyzed countries, or as many as 14 jurisdictions, have not initiated any stablecoin regulations at all. Such countries include Denmark, Estonia, France, Germany, Taiwan and Turkey. 25% of the reviewed jurisdictions, including Hong Kong and Italy, have the stablecoin regulation process initiated or plans communicated, while only about 9% of countries, including the United Arab Emirates, are finalizing stablecoin laws.
PwC’s report also notes three countries that have prohibited the use of cryptocurrencies, including mainland China, Qatar and Saudi Arabia.
Stablecoins are an integral part of the cryptocurrency ecosystem, with the Tether stablecoin being the most traded asset on a daily basis. According to data from CoinGecko, Tether’s daily trading volumes are 23% higher than those of Bitcoin, amounting to $34 billion.
The stablecoin market soared in 2023, adding billions in value due to the sharp growth of Tetherand other stablecoins. Tether’s market capitalization broke above $90 billion for the first time in mid-December 2023, racking up 36% growth since January.
According to data from CoinGecko, the total stablecoin market capitalization has been hitting new historical highs this year, reaching a new record of $131 billion.
According to some analysts, stablecoins will continue to grow further in the coming years. Bitwise’s Ryan Rasmussen believes that stablecoins will settle more money in 2024 than the global payment giant Visa.
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Why is Bitcoin price up today?
The fear surrounding centralized exchanges seems to have all but vanished as volumes on the inflow and outflow side continue to rise in the months after the Binance settlement. The increase in Bitcoin inflows and outflows from exchanges potentially highlights an expansion of spot trading interest.
Bitcoin trading volumes are not only significantly higher than Ethereum volumes, BTC on-chain transactions have also hit all-time highs. Bitcoin’s dominance may have been fueled by the unexpected rise in inscriptions.
The spike in transactions and increased exchange trading volume highlights renewed bullish optimism.
Potential spot BTC ETF approval boosts market sentiment
Despite a bevy of macro headwinds, Bitcoin price continues to push higher, achieving a 166% year-to-date gain with volatility increasing. Some Bitcoin analysts believe the Binance and DOJ settlement is bullish for a spot Bitcoin ETF approval, noting a similar deal achieved by Arthur Hayes and BitMEX.
Speaking on macro events and ETF developments, Markus Levin the co-founder of XYO Network notes,
“I think most analysts were surprised by the Fed’s suggestion that rate cuts could happen relatively early next year. I should note that it’s unclear how much risk assets would run, if at all, in the event of an actual rate cut. That said, the likely approval of these BTC ETFs is probably going to be a serious catalyst for Bitcoin and the rest of the digital asset market.”
While some analysts believe the Bitcoin price is pointing toward a breakout to $50,000, BTC has already more than doubled the 2023 returns of gold. MicroStrategy CEO and Bitcoin bull Michael Saylor believes a spot Bitcoin ETF would be the biggest to happen to all finance since the S&P 500 launched.
The positive sentiment around Bitcoin led the BTC market cap to surpass Berkshire Hathaway on Dec. 5, and it has remained the 10th-biggest asset by that measure. Despite BTC’s strength, the United States Securities and Exchange Commission (SEC) has refused to approve a spot Bitcoin ETF despite numerous applicants, including BlackRock, Fidelity, ARK Invest and 21Shares, with new playersseemingly entering weekly.
On Dec. 19, BlackRock met with both the Nasdaq and SEC regarding the spot Bitcoin ETF. This marks the second meeting between BlackRock and SEC in December.
According to reports, an approval may generate $600 billion in new demand. CryptoQuant analysts believe that an ETF approval will lead to a $1 trillion increase in Bitcoin’s market capitalization.
Galaxy Digital predicts a 74% price increase in the first year after a spot BTC ETF launch. The next window for the SEC to potentially approve a spot Bitcoin ETF is Jan. 5 through Jan. 10.
Despite the potential of approval in 3-weeks, Bitcoin traders have not necessarily started trading in a euphoric manner, a point supported by the current open interest shown in Bitcoin futures markets.
Year-to-date institutional investor inflows exceed $1.8 billion
While some investors may be awaiting increased liquidity and clarity from a spot ETF approval, institutional investors have already begun deploying funds to Bitcoin and crypto. According to CoinShares, institutional investors have pushed $1.86 billion into crypto in the past year. While institutional investors took profits last week, it ended an 11-week run of inflows.
Of the $1.86 billion pushed to crypto assets in 2023, over $1.66 billion has flowed to Bitcoin specifically. In the month of December, $6.7 million of institutional inflow was for Bitcoin alone.
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Coinbase stock 2023 returns pass 400% as COIN beats tech giants, Bitcoin
Bitcoin exchange Coinbase is witnessing a stock renaissance as maximum 2023 gains for COIN pass 400%.
COIN becomes top crypto pick for 2023
Data shows the United States’ largest crypto trading platform hitting 20-month highs this week.
Coinbase and Bitcoin have risen in tandem in 2023, but as the yearly close approaches, the exchange’s performance looks to be increasingly in a league of its own.
The company’s COIN stock reached $162 on Dec. 19, passing the 400% returns mark since January in the process.
Now, traders are eyeing even more upside continuation as markets count down to the potential approval of the first U.S. Bitcoin spot price exchange-traded fund (ETF).
Compared even to largest altcoin Ether, Coinbase has outperformed, with ETH/USD up around 85% since the start of the year.
Some — notably investment giant ARK Invest — have reduced exposure as COIN climbs. According to data from the official website of ARK CEO Cathie Wood, COIN holdings in the firm’s ARK Innovation (ARKK) ETF have dropped around 11% in December alone.
The holdings, while still ARKK's largest component, remain significantly beneath its aggregate cost basis of just under $255.
Armstrong: Anti-crypto is "bad politics"
Coinbase CEO Brian Armstrong nonetheless believes that the only way is “up” for crypto next year.
This week, the firm joined several U.S. crypto players in a fundraising move worth nearly $80 million to support “pro-crypto” U.S. election candidates.
“I think it’s time to make sure that people know being anti-crypto is just bad politics in D.C.,” he told CNBC in an interview on Dec. 19.
Armstrong referenced other current hurdles for Coinbase, including a rejection for a rule-making collaboration from the regulator in charge of greenlighting the ETF, the Securities and Exchange Commission, or SEC.
“Coinbase has a role to play in all aspects of the value chain here,” he summarized about the exchange’s appeal in a post-ETF environment.
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Solana price technicals hint at 40% crash by New Year’s
Solana’s SOL price risks losing nearly half its value in the coming weeks as a classic technical setup puts a potential 40% crash into play.
Bearish divergence limits Solana’s upside prospects
As of Dec. 19, SOL is trading at around $76.35, up around 50% compared to its local price low of around $51 a month ago.
However, SOL’s rally lacked the momentum required to sustain the uptrend further. Notably, the cryptocurrency’s relative strength index (RSI)has dropped from 90 to around 73 on its three-day chart, forming lower highs versus the price’s higher highs.
A similar bearish divergence can be spotted between SOL’s rising price and the declining three-day trading volumes. This is possibly an early warning sign about the current bullish trend losing strength, hinting at a trend reversal ahead.
In recent days, SOL’s price has stabilized near $73, a level coinciding with its 0.236 Fibonacci retracement line, which served as support in Q1 2022.
So, the bearish target price is a 40% drop toward its 50-3D exponential moving average (EMA; the red wave) near $42 by January 2024, if a correction does indeed follow SOL’s bearish divergence signals.
SOL price bull market at risk?
Solana’s bearish divergence is a buying opportunity if the selloff does happen, at least according to independent analyst Cold Blooded Shiller.
“These are really just indications that there’s a stronger chance we'll get cheaper prices to buy at, not that it’s some macro crypto top,” he noted, adding:
“The trends are still up, we still want to buy, we don't really care about the short side as much and we’re getting some signs that we may be fortunate to get some cheaper coins across the market.”
In other words, the bearish sentiment in the Solana market may run its course around the 50-3D EMA, followed by a rebound sometime in Q1 2024. Solana’s weekly timeframe chart offers a similar outlook.
Notably, Solana’s market corrections in the past have exhausted near an ascending trendline support. So, a move toward the trendline (around $40) could reignite bullish sentiment. Traders are also likely to buy SOL near the 0.786 Fib line near $55, a resistance-turned-support level.
SOL’s price must crash below these two support levels to confirm a bearish trend reversal. If it doesn’t, then the price may rise toward $100 in early 2024.
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NFT Trader hacked, millions of dollars in NFT stolen
Peer-to-peer trading platform NFT Trader suffered a security breach on Dec. 16, allowing hackers to steal millions of dollars worth of nonfungible tokens (NFTs).
NFT Trader confirmed the incident on X (formerly Twitter), saying the attack targeted old smart contracts, urging users to revoke delegations to two addresses: 0xc310e760778ecbca4c65b6c559874757a4c4ece0 and 0x13d8faF4A690f5AE52E2D2C52938d1167057B9af
Among the NFTs stolen are at least 13 Mutant Ape Yacht Club and 37 Bored Ape tokens, as well as VeeFriends and World of Women NFTs, amounting to losses of almost $3 million, according to Revoke.cash.
The hack was followed by rumors and misinformation on social media platforms. In addition, it’s still unclear how many hackers exploited the security flaw. In a public message, one of the attackers attributed the original exploit to another user. “I came here to pick up residual garbage,” they wrote, requesting ransom payments to return the NFTs.
“At first, as usual, I came here to pick up residual garbage. At first I thought I could only get TOKEN, but eventually I found out that I could also get NFT. [...] I’m a good person, the value of these NFT's is enough for a person to live a free life, but i don’t care about that. I prefer to pick up the leftover trash,” one of the attackers said.
The attacker then claimed to have limited technical skills, and proposed victims to pay a 10% bounty in Ether in exchange for their NFTs. “My technical skills are limited, I can’t get all the affected nfts at once, and it’s costing me a lot of energy and time. […] If you want the monkey nft back, then you need to pay me a bounty, which is what I deserve,” they wrote.
In another atypical development, one of the victims said the attacker returned a rare NFT along with 31 ETH, worth nearly $70,680 at the time of writing. “And now the hacker just sent me 31 eth? What in the world is going on. Is this real life?,” the victim wrote on X.
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Taiwan Police Target Crypto Influencers Linked to Polymarket Election Betting
Taiwanese law enforcement has initiated an investigation into online influencers and community members involved in promoting a Polymarket contract related to Taiwan’s upcoming election.
According to a report from Taiwan-based media outlet BlockTempo, the country’s authorities have sent subpoenaes to several influencers and individuals within the crypto community.
Polymarket allows users to place bets on the outcome of the January election, with over $300,000 currently wagered on various contracts.
The market currently gives the Democratic Progressive Party’s Lai Ching-te, also known as William Lai, a 78% chance of winning.
However, betting on election outcomes is explicitly prohibited under Article 88-1 of Taiwan’s Presidential and Vice Presidential Election and Recall Act.
The law states that individuals gambling on election or recall outcomes in public or public-accessible places can face fines, short-term detention, or imprisonment for up to six months.
“Law enforcement agencies in Taiwan are vigilant in investigating any gambling activities related to presidential elections,” Sherman Lin, an attorney at Taipei-based Lin & Partners, said.
“Broad legal interpretations have been applied to gambling crimes under the Presidential Election and Recall Act, leading to investigations and convictions of gambling website operators in Taiwan targeting Taiwanese gamblers.”
While gambling on election outcomes is illegal in most U.S. states, enforcement is primarily handled by the Commodity Futures Trading Commission (CFTC).
Polymarket’s Terms of Use also prohibit U.S. persons from using the platform.
However, the jurisdictional challenges posed by overseas entities limit Taiwan’s legal reach primarily to domestic actors, making it difficult to enforce actions against platforms like Polymarket.
Taiwan to Target Influencers Who Promoted Polymarket
Lin noted that law enforcement would likely focus on online influencers who promoted the contract since they can be targeted within Taiwan’s jurisdiction.
Lin further explained that there is no established legal precedent in Taiwan for decentralized platforms organizing election betting, despite existing legal precedents for going after centralized entities involved in election gambling.
The decentralized nature of Polymarket and its lack of physical presence in Taiwan could limit the Taiwanese judicial system’s authority over the platform.
Recent cases involving Taiwanese prosecutors pursuing online influencers who promoted trading platforms demonstrate that even promotional activities can have legal implications.
For instance, when the unlicensed crypto exchange JPEX collapsed in Hong Kong, local law enforcement arrested several online influencers who had promoted the platform.
Earlier this week, Taiwan’s Financial Supervisory Commission (FSC) set up a Financial Technology Bureau to oversee cryptocurrencies to protect investors and increase regulation.
The FSC-managed Fintech Bureau will be responsible for increasing regulation around the cryptocurrency market.
In Novemer, Taipei-based trading platform Kronos Research suffered a cybersecurity breach, leading to a staggering $26 million loss in crypto assets.
The FSC is also exploring the possibility of introducing cryptocurrency exchange-traded funds (ETFs) and has revealed that it is closely studying foreign cryptocurrency futures products and ETFs.
The intention is to gradually ease restrictions in alignment with global market conditions.
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Bitcoin price dips to $42.2K as Solana comes off 20-month highs
Bitcoin took a fresh step down on Dec. 26 as analysis blamed seasonal trends for BTC price weakness.
BTC price struggles after 2% drop
Data showed BTC/USD hitting $42,200, down 2% on the day — its lowest in almost a week.
Neither a “Santa rally” nor a holiday surprise greeted Bitcoin bulls over Christmas, and ahead of the Wall Street return, crypto markets continued to struggle.
Commenting on recent BTC price moves, trading resource Material Indicators argued that the final days of 2023 were bound to create problems.
“Year end profit taking and tax loss harvesting are going to strengthen the headwind for BTC bulls,” a post on X (formerly Twitter) read.
“Watching to see if they can reclaim the 21-Day MA before tonight's D candle close.”
Material Indicators referenced Bitcoin’s 21-day simple moving average, which at the time of writing stood at $43,115 — around $400 above spot price.
Earlier, co-founder Keith Alan stressed the significance of the 21-day trendline as support in recent months.
A printout of BTC/USDT order book liquidity on largest global exchange Binance meanwhile did little to lift the mood, this showing bids at $37,000 and lower increasing through the second half of December.
Continuing on order book trends, popular trader Skew likewise suggested that market participants were preparing for further downside.
“Looks more like shorts positioning for a break lower, in which these shorts will want to see continued spot selling else they will be forced to cover around $43K,” part of an X post explained on the day.
Solana retains lion's share of major gains
Not all major cryptocurrencies fared as badly into the yearly close.
In contrast to Bitcoin and largest altcoin Ether, both Binance Coin and Solana continued to put in impressive weekly performance.
BNB/USD and SOL/USD were up 19.5% and 56.8% over the past seven days respectively at the time of writing, while ETH/USD was just 1.6% higher.
As reported, Solana had benefited from a combination of increased gas fees and airdrops, hitting nearly $126 on Christmas Day — its highest since April 2022.
Previously, traders had eyed a chance for altcoins to shine as first mover Bitcoin lost momentum.
For Michaël van de Poppe, founder and CEO of trading firm MN Trading, proof lay in a noticeable trend change for the overall altcoin market cap.
Total market capitalization for Altcoins is finally breaking out of a range of 500+ days,” he told X subscribers on Christmas Eve.
“Retest took place and found sufficient amount of support, which means that Q1 is likely bringing a 2x on the Altcoin market capitalization.”
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Bitcoin Price Prediction on Christmas Day: Unwrapping BTC’s Market Trends and Future Outlook
On this serene Christmas Day, the cryptocurrency market, particularly Bitcoin (BTC/USD), reflects the season’s quiet but does not escape the inherent volatility of its nature. The current price of Bitcoin hovers around $43,125, marking a 1.70% decline in the last 24 hours.
Despite this, Bitcoin continues to reign as the dominant cryptocurrency, with a staggering market capitalization of approximately $844.39 billion and a circulating supply nearing 19.58 million BTC out of a maximum of 21 million.
Bitcoin Price Prediction
The technical landscape for Bitcoin at this juncture is a complex weave of indicators and levels, painting a picture of cautious anticipation among investors and traders. The pivot point for BTC/USD is currently placed at $42,797, serving as a crucial marker for potential price movements.
On the resistance front, immediate levels are set at $45,038, followed by higher barriers at $46,704 and $48,945. These levels will be critical in determining whether Bitcoin can regain its upward momentum.
In contrast, support levels are observed at $41,162, $38,891, and $37,256, which could play a significant role in cushioning any further declines.
The Relative Strength Index (RSI) for Bitcoin stands at 44, which falls below the neutral 50 mark, indicating a bearish sentiment but not yet venturing into the oversold territory. This suggests that while there is a downward pressure, there might be room for a potential rebound.
The Moving Average Convergence Divergence (MACD) is at -111.85, with the signal line at 89.98, further corroborating the bearish outlook. However, the price’s position in relation to the 50-Day Exponential Moving Average (EMA) of $43,313 adds a layer of complexity, suggesting a possible short-term bullish trend if Bitcoin can sustain above this level.
A notable chart pattern is the triple bottom breakout at $43,445. This pattern, if maintained, could indicate a potential shift towards a selling trend, suggesting bearish momentum. However, should Bitcoin break above this level, it could signal a reversal to a bullish trend.
Conclusion
Looking ahead, the short-term forecast for Bitcoin appears cautiously bearish, particularly if it stays below the $43,445 threshold. This could lead to a test of lower support levels. However, the volatile nature of the cryptocurrency market means that rapid shifts can occur, influenced by factors such as regulatory news, technological advancements, and shifts in global economic conditions.
As investors and traders around the world enjoy the holiday season, the performance of Bitcoin remains a key focus in the financial world. Whether this bearish trend will continue or give way to a bullish reversal is a question that remains at the forefront of market watchers’ minds.
The coming days will be crucial in determining the trajectory of the world’s most prominent cryptocurrency.
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Ripple’s legal chief unveils SEC’s XRP settlement offer before 2020 lawsuit
Ripple chief legal officer Stuart Alderoty disclosed the content of the United States Securities and Exchange Commission’s (SEC) settlement proposal before the agency filed a lawsuit against the compant in December 2020.
Looking back on the third anniversary of the lawsuit, Alderoty mentioned the settlement terms proposed by the SEC before initiating the case. He explained that before suing Ripple, the SEC suggested a settlement: publicly declaring XRP as a security and allowing the market a brief period to “come into compliance.”
On Dec. 22, 2020, the SEC accused Ripple’s co-founder, Christian Larsen, and CEO, Bradley Garlinghouse, of conducting an unregistered digital asset security offering to raise over $1.3 billion.
According to Alderoty’s post, in 2020, the SEC requested Ripple to acknowledge publicly that XRP was a security asset and allowed a brief window for crypto compliance. Ripple opposed the SEC’s demand, maintaining that XRP is not a security. Additionally, it argued that the SEC failed to establish a regulatory framework for crypto compliance.
Alderoty clarified that the SEC didn’t provide clear rules for crypto compliance. Despite industry criticism and companies relocating, the U.S. regulatory body, three years post-XRP lawsuit, didn’t establish proper industry compliance. Instead, it pursued an enforcement-first strategy, launching legal actions against major crypto exchanges like Coinbase and Binance.
Alderoty emphasized that, despite various perspectives, the core focus of the case was consistently to demonstrate that XRP, on its own, is not a security.
U.S. crypto businesses have contended that current securities laws aren’t suitable for crypto assets, yet the SEC has made minimal progress in establishing a specific regulatory framework for crypto.
Judge Analisa Torres, in a July 2023 summary judgment, ruled that XRP is not a security in retail transactions.
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BTC price shirks US PCE inflation win as Bitcoin $42K buyers step in
Bitcoin failed to react to positive inflation cues on Dec. 22 as United States macro data boosted bets of an interest rate pivot.
Fed January pivot odds near 15% after PCE print
Data tracked muted BTC price movements around the week’s final Wall Street open.
Despite a breakout beyond $44,000 earlier in the week, range resistance remained firmly in place for Bitcoin ahead of the U.S. holiday period.
The November print of the Personal Consumption Expenditures (PCE) Index, known to be the Federal Reserve’s “preferred” inflation gauge, nonetheless beat expectations.
The final number came in at 2.6% versus the anticipated 2.8%, further showing the impact of monetary policy tightening on rampant inflation.
Markets reacted in step, increasing their odds of interest rates cooling next month to around 15%, per data from CME Group’s FedWatch Tool.
“This is the lowest PCE inflation number since May 2021. Another welcomed sign by the Fed,” trading resource The Kobeissi Letter wrote in part of commentary on X (formerly Twitter).
Kobeissi added that November macro releases had almost unanimously adhered to the waning inflation narrative.
“Just about all of the inflation data for November has moved in the right direction,” it continued.
“This has reinforced market hopes of Fed rate cuts in 2024. Still, the question is how many rate cuts and when they'll begin.”
Dollar decline not enough for sideways Bitcoin
BTC price action offered little hope to bulls on the day despite the encouraging macro signals and a drop in U.S. dollar strength, which dropped to its lowest since late July.
Behind the scenes, popular trader Skew nonetheless noted rising bid liquidity on largest global exchange Binance, boosting $41,000 and $42,000 as support.
In his latest trading advice, fellow trader Crypto Tony flagged $44,300 as a line in the sand for BTC/USD to reclaim in order to consider long positions.
Others noted the requirement for Bitcoin to crush its current 2023 highs, with a consolidatory structure in place for much of December.
“Bitcoin has formed a rectangle consolidation,” trader and analyst Alan Tardigrade told X subscribers on the day.
“If it breaks out the top resistance line, the measured target could reach $48k.”
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Scammers Banked $59 Million in Crypto Exploiting Google Ads
Scammers have over the past nine months used a wallet-draining service named “MS Drainer” to siphon around $59 million worth of crypto from numerous victims, according to a recent report by blockchain security firm Scam Sniffer.
The scam operated through Google Ads, targeting victims with counterfeit versions of popular crypto platforms such as Zapper, Lido, Stargate, DefiLlama, Orbiter Finance, and Radient, the report said.
Wallet-drainers are specialized pieces of software that enables scammers to transfer crypto out of a victim’s wallet without their consent.
The software exists as blockchain-based smart contracts that even charge a share of the illicit proceeds as a fee that can go back to the developers.
‘MS Drainer’ first identified in March
According to Scam Sniffer’s report, the firm first identified MS Drainer in March this year, with the SlowMist security platform assisting in the investigation.
Regional targeting and page-switching tactics were reportedly used to evade Google’s ad audits, which in turn enabled the scammers to post fake ads as part of a phishing scam.
The scammers also utilized web redirects, misleading users into thinking they were accessing official websites.
63,000 victims
In all, Scam Sniffer discovered 10,072 fake sites employing MS Drainer, with its peak activity in November before a subsequent decline.
During its operation, the drainer extracted nearly $59 million worth of crypto from over 63,000 victims.
Scamming as a service
Notably, the MS Drainer developer sold his scamming tool on forums for a flat fee.
According to the report, the price was set at $1,499.99, with additional “modules” being offered at varying prices.
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Solana (SOL) Flips BNB, Gains 17% in 24 Hrs to Become Fourth Largest Crypto
The price of Solana (SOL) gained as much as 17.15% within the last 24 hours in a massive rally to become the fourth largest crypto in terms of market cap.
As of writing, SOL is trading at $98.63, boasting a market capitalization of nearly $42 billion. This surge propels Solana into the position of the fourth-largest cryptocurrency, surpassing Binance Coin (BNB), which currently stands at $41.9 billion, as per Coingecko data.
The recent rally goes beyond just increase in market capitalization, with SOL’s contract trading volume across the network witnessing a substantial 32% increase, exceeding 10 billion.
Furthermore, the open interest in SOL contracts has reached 1.34 billion, positioning Solana as the second-highest in open interest, trailing only behind Bitcoin (BTC) and Ethereum (ETH).
TVL on Solana Surges Past $1.3 Billion
According to data from DeFi Llama, the total value locked (TVL) on the Solana blockchain has surged past $1.3 billion, indicating substantial growth in DeFi activity over the last two months.
Despite the remarkable rally, there are indications of significant players liquidating their SOL supplies. Arthur Hayes, co-founder of the crypto exchange BitMEX, has publicly disclosed selling his SOL holdings and reallocating funds to Ethereum (ETH).
This strategic move aligns with the broader trend in which Solana has witnessed a surge of 700% since the beginning of the year, with a notable 5-fold increase in the last two months.
The largest cryptocurrency Bitcoin is also trading above $44,100 once again today amid recent spot ETF filing updates from top asset managers.
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Bitcoin traders see $48K BTC price before ETF 'sell the news' event
Bitcoin circled $44,000 into the Dec. 21 Wall Street open as analysis said that a BTC price correction was “necessary.”
$48,000 marks BTC price "topside resistance"
Data confirmed Bitcoin trading beyond its previous one-week range.
A breakout had occurred the day prior, with BTC/USD reaching highs of $44,300 before reversing.
Still up over 6% week-to-date, the largest cryptocurrency nonetheless gave some market participants pause for thought.
“Although a correction seems necessary, BTC chart continues to look very strong on all timeframes,” trading team Stockmoney Lizards wrote in part of its latest market update on X (formerly Twitter).
“BTC is forming an ascending triangle with another retest of the upper resistance line (~44k).”
Like many others, Stockmoney Lizards focused its attention on the upcoming decision on the United States’ first Bitcoin spot price exchange-traded fund (ETF) due by Jan. 10.
“It is likely that BTC will continue to pump and break the upper trendline until an ETF decision is made,” it continued, giving a near-term upside target of $48,000.
The announcement itself, even if positive, could nonetheless turn out to be a “buy the rumor, sell the news” event, the analysis warned. In this, Cointelegraph reported, Stockmoney Lizards is far from alone.
“As we finally approach the launch, we need to point out that it is likely that the actual demand for the BTC Spot ETF at the start will fall short of market expectations,” trading firm QCP Capital agreed in its own market update on Dec. 21.
“This sets up a classic ‘sell the news’ scenario in the 2nd week of Jan. For this reason, we expect topside resistance for BTC in the 45-48.5k region and a possible retracement to 36k levels before the uptrend resumes.”
A correction would be "good" for Bitcoin markets
The mid to late $30,000s remains a popular area in terms of where a potential retracement could take the market.
“The chart looks heated up and a correction would be good. A drop below $40k could liquidate some leveraged long positions and lead to retracement towards $38k,” Stockmoney Lizards concluded.
“Arguments in favour of this scenario would be the rally that needs correction, year-end sales (tax loss selling) and reduced trading activity due to the holidays.”
While the update called such a scenario “less likely” than others, market data showed traders poorly positioned even for the latest push above $44,000.
According to statistics resource CoinGlass, Dec. 20 liquidated over $100 million in crypto short positions — the most in two weeks. BTC short liquidations totaled $38.5 million.
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Stablecoin Dominance Hits Lowest Since December 2021 Despite Record Monthly Supply
The entire stablecoin market cap dominance fell to 8.07% in December, recording the lowest market share since December 2021, despite adding the largest monthly supply last month since February 2022.
The total market capitalization of stablecoins rose 3.43% to $128 billion in November, CCData research report revealed.
The upward trajectory appears set to continue, with the asset class already crossing $129 billion as of December 18.
USDT Market Cap Breaches $90 Billion for the First Time
The market capitalization of USDT rose to $90.8 billion in December for the first time.
This achievement marks an all-time high for the stablecoin, representing the first instance of any stablecoin crossing the $90 billion mark in market capitalization.
This also records the fourth consecutive month of increase in market capitalization of the leading stablecoin.
The market dominance of USDT among top 10 stablecoins is currently at 70.2%, the highest level since January 2021.
Trading volume for USDT pairs on centralized exchanges also reached $662 billion in November, the highest level recorded since March 2023, researchers at CCData revealed.
The standout stablecoin for the month of December turned out to be First Digital USD (FDUSD). The market capitalization of FDUSD rose 92.6% to $1.63 billion (as of Dec 18th), recording a new all-time high for the stablecoin.
This is the first time the stablecoin has replaced BinanceUSD (BUSD) as the fifth largest stablecoin, behind USDT, USDC, Dai and TrueUSD.
Binance Ends Support for BUSD
This month Binance announced to end support for its stablecoin Binance USD.
BUSD had recorded 13 consecutive months of decline in market cap, falling to $1.47 billion in December.
The stablecoin once accounted for nearly 36.4% of the trading volumes on Binance, however, it has been gradually phased out with replacements TrueUSD and First Digital USD, since being served with a Wells Notice from the US SEC in February.
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Bitcoin dominance bounces back as BTC price attempts $44K breakout
Bitcoin sought to overcome weekly range resistance on Dec. 20 as BTC price strength battled altcoins for supremacy.
$46,300 emerges as BTC price target
Data followed BTC/USD as it neared $44,900 after the Wall Street open.
After dropping to near $40,000 at the start of the week, Bitcoin staged a comeback to cause traders to reconsider the likelihood of steeper downside.
Commenting on the current market trend, popular trader Credible Crypto argued that Ether seeing a local bottom further reinforced the odds of upside continuation for BTC.
Estimating where that continuation could end up in the short term, analyst Matthew Hyland eyed new 2023 highs above $46,000.
“BTC now at the top of the range of the double bottom reversal,” he told subscribers on X (formerly Twitter) on the day.
“The price target if breakout confirms would be around $46.3k. Would need to break resistance at annual highs from earlier this month as well.”
An accompanying chart highlighted a double bottom construction involving $40,000 support in place over December.
Fellow trader Jelle likewise agreed that Bitcoin looked “eager to break out,” describing the support retests as a “shallow pullback.”
The current local high, which marks Bitcoin’s highest levels since April 2022, stands at $44,729 on Bitstamp.
Bitcoin meanwhile recovered lost market share, with its market dominance 53.8%, up 0.8% versus the start of the week.
"Biggest news since the whitepaper"
In the ongoing debate over the imminent decision on the United States’ first Bitcoin spot price exchange-traded fund (ETF), bullish takes continued to flow.
On the day, it was well-known investor Fred Krueger keeping hopes alive, seeking to explain the muted market “front-running” of an ETF go-ahead.
“If you work at a the ETF desk at Blackrock, you have been given strict orders not to mess up what Saylor calls ‘the most significant financial markets product in 30 years,’ part of an X post stated, referring to recent ETF commentary by MicroStrategy CEO, Michael Saylor.
“The last thing you do is buy GBTC, MSTR or some competing product. The last thing you do is buy actual BTC and deposit it your dedicated ETF Coinbase custody account.”
Krueger argued that political events in the U.S. could be contributing to markets’ cold feet, despite an ETF approval constituting “the biggest news in Bitcoin since the White Paper.”
As reported, the decision is due in around three weeks’ time, with Jan. 10 the final deadline.
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Senator reveals the American Bankers Assoc 'helped craft' new anti-crypto bill
Big banks have been helping United States Senators Roger Marshall and Elizabeth Warren draft their controversial anti-crypto bill.
A Dec. 20 video that surfaced on X (formerly Twitter), shows footage of Senator Marshall admitting that he and Senator Warren approached the largest lobbying organization for the U.S. banking industry — the American Bankers Association (ABA) — for assistance in crafting the Digital Asset Anti-Money Laundering Act.
The Digital Asset Anti-Money Laundering Act, first introduced in December 2022, aims to bring crypto technology such as non-custodial wallets, validators, and mining pools under the strict banking regulations in the United States.
“The first thing that we did is that we went to the American Bankers Association and said 'help us craft this'.”
Marshall also mentioned Warren’s meeting with JPMorgan CEO Jamie Dimon in which they both agreed that “crypto was only a tool for criminals.” The footage was sourced from a parliamentary security-intelligence forum earlier this month.
In response to the video, Coinbase CEO Brian Armstrong expressed his disappointment that Senators Warren and Marshall were now lobbying for banks. “Being anti-crypto is a really bad political strategy going into 2024,” he added.
Meanwhile, finance lawyer Scott Johnsson suggested that voters angry at Senator Warren should focus on vulnerable seats that have supported her crusade this past year.
On Dec. 11. the bill gained five new Senators as co-sponsors, including three members of the Banking Committee. Moreover, U.S. banking advocacy group, the Bank Policy Institute (BPI), has also backed anti-crypto legislation introduced by Senator Warren.
Anti-crypto commentators often make the claim that digital assets are used largely for nefarious activity, despite a wealth of evidence to the contrary. Blockchain analysis platform Chainalysis showed that less than 0.2% of crypto is used for illicit purposes.
Anti-crypto advocates also often fail to acknowledge the level of criminal activity in the world of traditional finance, with JPMorgan being one of the most heavily fined banks. The Wall Street bank has paid almost $40 billion in fines for a wide range of violations since 2000, according to Violation Tracker.
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Bitcoin fees hit 20-month high as miner revenues match $69K BTC price
Bitcoin on-chain transaction fees are dividing opinion as the cost of sending BTC skyrockets.
Data from the statistics resource BitInfoCharts puts the average transaction fee at nearly $40 as of Dec. 17.
Commentators: High Bitcoin fees are inevitable
The latest wave of Bitcoin Ordinals inscriptions has resulted in elevated transaction fees for all network users — but some believe that they are here to stay.
Per BitInfoCharts, it currently costs just over $37 to send BTC on-chain — the highest average figure since April 2021.
Additional figures from Mempool.space show that Bitcoin’s mempool — the size of the unconfirmed on-chain transaction backlog — is vast, resulting in transactions with an attached fee of even $2 having no on-chain priority.
Almost 350,000 transactions are waiting to be confirmed at the time of writing.
As casual on-chain spending becomes unviable for many smaller investors, a heated debate among Bitcoin proponents continues.
While many are angry at the impact of Ordinals on fees, popular Bitcoin figures argue that double-digit transaction costs are merely a taste of things to come. Those wanting to shield themselves need to embrace so-called layer-2 solutions such as the Lightning Network, which is specifically designed to cater to mass adoption.
“Fees are currently artificially and temporarily high due to JPEG clownery, but it is nothing more than a glimpse into the future. Scaling doesn’t happen on L1,” popular commentator Hodlonaut wrote in one of many posts on the topic on X (formerly Twitter) on Dec. 16.
Continuing, Hodlonaut argued that demanding low fees for “Level 1” transactions is “not just ignorant, it feeds into an attack on bitcoin.”
This reflects on the very composition of Bitcoin itself as a competition-based network gaining value over time as proof-of-work intends. Keeping fees low is contradictory, and as hard forks of the Bitcoin network specifically intended to offer that benefit have shown, does not attract value.
“Why is it critical to onboard someone to L1 with sub $1 fees, if they can’t afford to move the funds in five years anyway? Go to bcash or another centralized pipe dream already,” Hodlonaut added, referring to one such offshoot, Bitcoin Cash
Miners enjoy best USD revenues in two years
Elsewhere, well-known commentator Beautyon reiterated that despite the fees, Bitcoin continues to function as intended.
“If Ordinals bring the high on chain world to everyone earlier than expected, it will act like a scythe cutting down everyone who did not accept a Layer 2 solution to the network fee problem,” part of a recent X post stated.
“Many users will be confused, upset and ready to abandon Bitcoin. There will be no recourse for them, obviously, because there is no one to blame, no one to seek compensation from; after all this is the normal state of the network. The rules are being followed, and those are the rules you agreed to, Bored Apes!”
That perspective is shared by Bitcoin veteran Adam Back, co-founder of Bitcoin and blockchain technology firm Blockstream.
For him, the answer likewise lies in expanding layer-2 capabilities instead of relying on anything beyond miner fee incentives.
“You can’t stop JPEGs on bitcoin,” he concluded.
“Complaining will only make them do it more. Trying to stop them and they’ll do it in worse ways. The high fees drive adoption of layer2 and force innovation. So relax and build things.”
Data from Blockchain.com shows miners’ revenue — the sum total of block subsidies and fees in USD — hitting levels last seen when Bitcoin hit its current $69,000 all-time high in November 2021.
BTC/USD traded at around $42,000 toward the Dec. 17 weekly close, per data.
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Tether responds to US lawmakers’ calls for DOJ action
Tether, the company behind the stablecoin Tether, disclosed letters directed to U.S. legislators, addressing requests for intervention by the Department of Justice in relation to the illicit use of its stablecoin.
The communications were sent to members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs and the U.S. House Financial Services Committee on Nov. 16 and Dec. 15, detailing "Tether’s commitment to fighting illicit use of stablecoins."
The letters aim to answer calls from Senator Cynthia Lummis and Representative French Hill from October, urging the DOJ "to carefully evaluate the extent to which Binance and Tether are providing material support and resources to support terrorism.”
The lawmakers made the remarks after Hamas launched a coordinated attack against Israel on Oct. 7, which they suggested was supported in part by illicit crypto transactions “providing significant terrorism financing.”
As part of its response, Tether stated that it has a Know Your Customer (KYC) program, a transaction monitoring system, and a "proactive approach” to identifying suspicious accounts and activities.
"We have always assisted law enforcement when called upon to act, and we remain fully committed to continuing to work proactively with agencies globally. Tether has and will assist in identifying and freezing addresses subject to sanctions, engaged in illicit activity, or engaged in any form of terrorist financing."
In addition, Tether noted that clients' reviews do not end with their onboarding, claiming to use surveillance monitoring tools to continuously track client activity. "In particular, Tether uses the Reactor tool from Chainalysis and receives secondary market risk reports from this Company. These surveillance tools are considered to be the leading options for blockchain surveillance and are used by many U.S. government agencies to surveil activity on the blockchain."
In a related development, Tether announced on Dec. 9 that it had initiated a voluntary wallet-freezing policy, offering secondary market controls to freeze activity connected with sanctioned persons on the United States Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List.
Previously, in 2022, Tether had refused to proactively freeze wallets associated with irregular activities. However, the intense crackdown on crypto firms in the U.S. — and across the world — prompted the company to rethink its strategy.
“Tether seeks to be a world class partner to the U.S. as we continue to assist law enforcement and expand dollar hegemony globally,” noted Tether's CEO Paolo Ardoino.
The scrutiny of crypto firms in the U.S. over 2023 favored USDT’s market share, which sits at $90 billion at the time of writing, according to CoinMarketCap.
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Bitcoin halving, BTC ETF hype driving price up into 2024 — NBX Berlin
The potential approval of spot Bitcoin exchange-traded funds (ETFs), the looming BTC mining reward halving and major regulatory and enforcement actions have a profound psychological effect on market prices.
This is a key takeaway from the Next Block Expo conference in Berlin, just as Bitcoin tipped past $42,000 for the first time in over a year.
Animoca Brands CEO Robby Yung, gumi Cryptos Capital managing partner Miko Matsumura, Binance regional manager Jonas Jünger, and Polkastarter business development lead João Leite weighed in on whether the current cryptocurrency bear market was coming to an end in a conversation with Cointelegraph.
Bitcoin halving is a psychological phenomenon
Considering the influence of the four-year cycle between Bitcoin mining reward halvings, Matsumura likens the rhythm to that of a medieval battering ram.
“Every four years, we swing the ram, and we smash. Four years is long enough that the people inside the castle think we’ve gone away,” the venture capitalist explains.
Matsumura says that the halving cycle involves an inherent Schelling focal point mechanism, which is a game theory concept and social phenomenon where people or organizations can coordinate without communication.
“It’s important to think about it as a psychological training phenomenon because each time it works, it inclines people to go with it the next time it happens.”
He also suggests that Bitcoin’s stock-to-flow model clearly shows that the actual cut in BTC supply is getting smaller with each halving, which means “the actual mathematical economic effect is smaller.”
Jünger echoes these sentiments by highlighting the deflationary mechanism of the Bitcoin protocol and that there’s never talk of halving the fiat money supply.
“It’s just such a foreign concept to everything with fiat money that every time it occurs, it’s just such a celebration of we’re doing something completely different here.”
Yung provides another interesting perspective, noting that while Animoca Brands has just two projects that directly work in the Bitcoin ecosystem out of some 500 investments, the preeminent blockchain remains “very impactful” in what it does.
The Animoca CEO says the effect is similar to any business where interest rates, employment figures and other big macroeconomic signals have an impact even if they’re not directly impacting you.
“So, for us, I think Bitcoin is our central bank. With that in mind, I think of Ethereum as our investment bank.”
Bitcoin ETFs and consumer protection
The pending approval of several spot Bitcoin ETFs in the United States is being widely cited as a significant driver of BTC’s recent appreciation in value into the mid $40,000 range. Yung offers a very short takeaway as to why this is the case:
“The potential income from bitcoin ETFs is estimated to be $10 to $12 billion.”
For an exchange like Binance, the potential for an immediate price spike is another important consideration that could test the systems of a number of global exchange operators.
“These kinds of events are critical in running the exchange. It’s a matter of succeed or fail in terms of providing the underlying infrastructure when the news goes out and you see that green wick,” Jünger explains.
Binance’s regional director adds that consumer protection is set to fundamentally change with the provision of a spot Bitcoin ETF, which provides a compelling proposition that will drive investment into the asset class:
“All of a sudden, with this ETF vehicle, you will no longer have synthetic financial instruments that reflect the price of Bitcoin. You have an actual spot. It’s all secured. It’s all in custody.”
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