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After one of the worst drops this year, Bitcoin (COIN:BTCUSD) and other cryptocurrencies showed a slight recovery, maintaining significant gains since April 2022. The anticipation of a Bitcoin ETF in the US and a favorable macroeconomic context, with signs of slowing inflation, have boosted values. US CPI inflation data from December 12 showed an annual inflation aligned with expectations at 3.1%. The cryptocurrency boasts an appreciation of over 50% in the last two months, with experts like Fernando Pereira of Bitget commenting on the recent volatility of Bitcoin: “After closing yesterday with almost a 6% drop, BTC held close to $40,000. I believe the peak of the year was marked at $44,700 and that in the coming days we will operate close to this $40k support, possibly even seeking liquidity at $37k. There would be a great purchase of BTC to surf 2024.”
Recent analyses show that Ethereum (COIN:ETHUSD), since the September 2022 merge, has adopted a deflationary economic model. The reduction in the supply of Ethereum by 309,663 ETH (approximately $686.2 million) is a result of the burning of 1,195,238 ETH. Even with the issuance of 885,581 ETH, the total supply decreased, indicating an excess of burning over issuances. This deflationary trend increases scarcity and potentially the value of Ethereum in the market.
Avalanche (COIN:AVAXUSD) recorded a significant increase in the cryptocurrency market, with its price rising over 65% in one week, raising the market capitalization to $13.621 billion. The rise was driven by a recent token unlock. The number of transactions and DeFi activity on the network also increased, indicating a strong upward trend for the cryptocurrency.
The Aptos blockchain, created by former Meta (NASDAQ:META) executives, released 24.8 million APT tokens (COIN:APTUSD), equivalent to 8.9% of its circulating supply and valued at about $201.7 million. The largest portion of the unlock, approximately $96.4 million, was allocated to key contributors, while $68.4 million went to investors, $26.1 million to the community, and $10.8 million to the Aptos Foundation. After a similar unlock on November 12, the price of APT fell 13.4% before recovering, currently trading at $8.77. Aptos, a Layer 1 blockchain based on the Move language, experienced a disruption in October, affecting transactions on exchanges like Binance and OKX. Other significant token unlocks, including ApeCoin (COIN:APEUSD) and Optimism (COIN:OPUSD), are scheduled for December, with ApeCoin releasing 15.6 million tokens and Optimism 24.2 million, potentially impacting the market.
The Synthetix protocol community (COIN:SNXUSD) ratified the SIP-2043 proposal, deciding to end the inflation of its SNX token. This move paves the way for alternative strategies, including token buybacks and burns, planned for the next Andromeda software release. The change eliminates the need for stakers to claim weekly inflationary rewards, a mechanism that lost effectiveness as an incentive. In the future, Synthetix will use trading fees to reduce the supply of SNX tokens, thus boosting its value. Following the announcement, the token reached an annual peak of $4.75. At the time of publication, the token was down more than 7% to $4.20, with a weekly and monthly rise of 12.60% and 63.42%, respectively.
BlackRock (NYSE:BLK) innovated the structure of its proposed Bitcoin ETF, facilitating participation by Wall Street banks. Previously, authorized participants (APs) of the ETF had to create shares using cryptocurrencies, but now they can use cash. This change allows regulated banks, such as JPMorgan (NYSE:JPM) and Goldman Sachs (NYSE:GS), who cannot own bitcoins, to become APs. They will be able to convert cash into bitcoin through intermediaries, improving the liquidity of the ETF. The expectation is that this change will expand the number of liquidity providers and attract more retail investors, an important milestone for the digital asset industry.
ARK Invest, led by Cathie Wood, conducted its largest sale in over a year, divesting about $12.85 million in shares of the Grayscale Bitcoin Trust (USOTC:GBTC) through its Next Generation Internet ETF (AMEX:ARKW). This sale reduces the fund’s stake in GBTC to approximately $112.7 million, maintaining its policy of limiting individual holdings to less than 10% of the fund’s total market value. Concurrently, ARK Invest also sold shares in Coinbase (NASDAQ:COIN), following a trend of reducing investments in cryptocurrency-related assets.
Coinbase Asset Management launched the Diamond Project, an innovative platform for institutional investors that combines traditional financial assets with blockchain technology. Utilizing the Ethereum Base network, the platform allows the issuance and trading of digitally native debt instruments. Approved by Abu Dhabi’s FSRA, the project has already proven effective with the issuance of a debt instrument on Base, representing a significant advancement in integrating TradFi and blockchain. In other news, Brian Armstrong, CEO of Coinbase, revealed that recent updates to the company’s wallet aim to facilitate payments. Released on December 5, these improvements enable simpler, more direct transactions, such as sending USDC for free and instantly. This initiative aligns with Coinbase’s goal of making cryptography more accessible and improving user experience, including support for the Base Seamless Protocol (SEAM), thereby increasing the overall locked value of the token.
Cryptocurrency exchange Bitget reported a 20% increase in new user registrations in the first week of December, surpassing the total count of the previous month. 89% of the new users are active in cryptocurrencies, with 61% exclusively focused on Bitcoin (COIN:BTCUSD). Concurrently, Bitcoin’s price reached $44,000, and Google searches for Bitcoin doubled. Bitget also observed a 23% increase in copy trading in the spot market and a 17% growth in cryptocurrency derivative copy trading.
Binance, the world’s largest cryptocurrency exchange by market volume, recorded a gradual decrease in its spot market share this year. The company, facing regulatory allegations and challenges related to its founder and CEO, Changpeng “CZ” Zhao, saw its market share drop to 30.1% in December, a significant reduction from 55% at the beginning of the year. According to CCData, Binance’s monthly spot volumes fell over 70% by September to $114 billion. Despite an increase in trading volumes since September, the exchange’s market share continues to decline.
Cryptocurrency exchange KuCoin agreed to pay $22 million to resolve a legal dispute in New York. This settlement includes reimbursing $16.77 million to its customers in the state and a $5.3 million fine paid to the New York State Attorney General. The decision follows allegations that KuCoin violated securities laws by offering certain tokens, like Ether (COIN:ETHUSD), considered securities and not properly registered. The action was initiated by Attorney General Letitia James in March, and KuCoin’s CEO, Johnny Lyu, confirmed the settlement in a tweet, reaffirming the company’s commitment to regulatory compliance.
FTX, embroiled in a bankruptcy case and with its former CEO accused of fraud, faces significant challenges in resolving tax claims from the IRS. After an initial demand of $43 billion, the IRS revised it to $24 billion, but FTX’s debtors are contesting, citing lower revenues and significant losses, as reported by Ernest & Young, which registered an $11 billion deficit. This tax dispute threatens to delay the recovery of customer funds, while FTX struggles to recover assets and settle debts, having already recovered about $7 billion.
The “Universal Privacy Alliance” (UPA), led by Nym and including entities like Protocol Labs and Oasis, was established to protect digital privacy. The UPA, with an initial fund of $150,000, will focus on influencing policies, highlighting privacy as an essential human right. The group will promote privacy technologies from the start and actively participate in regulatory and legislative debates, advocating user-centric practices.
Rostin Behnam, Chairman of the CFTC, stated on CNBC that most cryptocurrencies are commodities, highlighting the need for updated laws to keep pace with technological advancements. He emphasized the permanence of cryptocurrencies in the market and the urgency of more comprehensive regulations, appealing to Congress to resolve regulatory disputes and adapt existing laws to the dynamic digital asset sector.
US Senator Elizabeth Warren, a Democrat, garnered more support for her bill aimed at combating the use of cryptocurrencies in illicit activities. Five senators, including members of the Senate Banking Committee, co-sponsored the “Digital Asset Anti-Money Laundering Act,” which extends the Bank Secrecy Act requirements to miners, validators, and cryptocurrency wallet providers. The bill, aiming to equalize the transparency of cryptography with traditional banks, is part of efforts to prevent illegal activities such as financing terrorist organizations. Meanwhile, the US Treasury Department seeks more authority to pursue illicit actors in the digital asset sector.
El Salvador received regulatory approval to issue the anticipated ‘Bitcoin Bonds’ in the first quarter of 2024, announced the country’s National Bitcoin Office (ONBTC). This move, described as a breakthrough for Bitcoin-centered capital markets, will be overseen by Bitfinex Security. Concurrently, the country’s recent Bitcoin visa program attracted $153 million in a week, promoting citizenship for investments in BTC or USDT (COIN:USDTUSD). This development reinforces El Salvador’s position as a Bitcoin proponent, following the adoption of the cryptocurrency as legal tender in 2021.
FIFA launched a new digital collectible collection for the FIFA Club World Cup Saudi Arabia 2023, in collaboration with Modex. The first series, including 100 rare digital items, will be available on December 15, with opportunities to win tickets to the FIFA World Cup 26 final. The collection will be minted on the Polygon network and available on OpenSea, highlighting digital innovation in football.
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