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Following recent statements by Jerome Powell, the chairman of the Federal Reserve, financial markets reacted with expectations of seven interest rate cuts in 2024, with the federal funds rate potentially reaching between 3.50% and 3.75%. This prediction boosted several indices, with the Dow Jones surpassing 37,000 and the S&P 500 approaching its record, rising by 1.4%. Bitcoin (COIN:BTCUSD) experienced a significant increase in its market capitalization, rising more than $40 billion in 24 hours, surpassing $43,000. Fernando Pereira, an analyst at Bitget, commented on the market optimism regarding the Federal Reserve’s future monetary policies and their positive impact on Bitcoin’s value: “The decision to keep interest rates was expected, the surprise came in the expectation of future Fed cuts. We can expect 3 cuts in 2024, and this has excited investors. This news should keep BTC above $40k for a few good days.” At the time of publication, Bitcoin was at $42,416.
In 2024, JPMorgan Chase (NYSE:JPM) anticipates that Ethereum (COIN:ETHUSD) will surpass Bitcoin (COIN:BTCUSD) and other cryptocurrencies, despite a generally cautious approach to the crypto market. This prediction is based on the EIP-4844 upgrade, or Protodanksharding, which promises to significantly enhance the Ethereum network. This upgrade will be particularly beneficial for Layer 2 networks, improving efficiency without altering Ethereum’s block size. Meanwhile, JPMorgan analysts highlight Bitcoin’s price stagnation, attributing it to the inclusion of future events like the halving in prices. They also point out the slow progress of tokenization and limited integration of decentralized finance into the traditional financial system, noting challenges such as fragmentation and lack of regulation. In terms of venture capital funding in the crypto sector, there are signs of improvement, but the situation is still considered uncertain.
Vitalik Buterin, co-founder of Ethereum (COIN:ETHUSD), has proposed ZK-EVM, an innovative approach to improve Ethereum’s main chain. This architecture aims to incorporate cryptographic techniques into the main chain to enhance transaction security and efficiency, especially for Layer 2 applications. ZK-EVM, functioning as an integral part of the Ethereum protocol, aims to reduce reliance on external systems, improving transaction speed and security while maintaining compatibility with Ethereum’s multiclient philosophy.
Cronos Labs (COIN:CROUSD), responsible for the Cronos blockchain, has announced the launch of a new Layer 2 network, the “Cronos zkEVM chain,” initially in a testing phase. Using Matter Labs’ tools, the network adds a new layer to the Cronos ecosystem, which already includes the Cronos EVM blockchain and the Cronos PoS chain. This is the first public test network to use Matter Labs’ ZK Stack, with plans for full operation in the second quarter of 2024.
The meme coin BONK (COIN:BONKUST), built on the Solana blockchain, witnessed an increase of over 45% following the announcement of its listing on Coinbase (NASDAQ:COIN). This inclusion elevates BONK to the status of the third-largest meme coin on the platform, behind Dogecoin (COIN:DOGEUSD) and Shiba Inu (COIN:SHIBUSD). Coinbase plans to roll out BONK-USD trading in phases. The announcement reversed BONK’s recent losses, highlighting Coinbase’s influence on traders’ perception of legitimacy and interest in listed tokens. BONK is currently trading at $0.000015, marking a 15.4% growth in the last 24 hours and a 118.66% increase in the last 7 days.
The DeFi protocol Yearn.Finance (COIN:YFIUSD) faced a $1.4 million loss due to a script error and is now appealing to arbitrage traders to return excessive profits generated by the incident. During a token conversion, a multi-signature error resulted in the unwanted exchange of 3,794,894 lp-yCRVv2 tokens, causing significant slippage in the liquidity pool. Yearn.Finance confirmed that no user funds were affected and is implementing measures to prevent future errors, including dedicated management contracts and stricter price impact limits.
The SEC has extended the deadline to decide on Invesco Galaxy’s Ethereum ETF, moving the initial decision date from December 23, 2023, to February 6, 2024. This extension aims to provide the Commission with more time to evaluate the proposal and related issues. The SEC’s decision on this ETF, which seeks to reflect the spot price of Ether, is eagerly awaited, especially considering the growing interest of financial institutions like BlackRock (NYSE:BLK) and Fidelity in cryptocurrency ETFs. Meanwhile, the SEC is engaging with Bitcoin ETF issuers, indicating a potential breakthrough in regulatory approvals for crypto assets.
ARK Invest, led by Cathie Wood, sold a significant portion of Coinbase (NASDAQ:COIN) shares on Wednesday, totaling approximately $42.59 million, while the cryptocurrency exchange’s shares reached their highest value in 20 months. The sales occurred in the ARK Innovation (AMEX:ARKK) and ARK Next Generation Internet (AMEX:ARKW) ETFs, totaling over $150 million in sales since December 5. Despite this, Coinbase still represents more than 10% of ARK’s portfolio. In parallel, the company also reduced its holdings in the Grayscale Bitcoin Trust (USOTC:GBTC), while Coinbase shares, with a 325% increase this year, significantly outperform other major tech companies.
Coinbase (NASDAQ:COIN), one of the leading cryptocurrency exchanges, is redirecting its global growth strategy toward Brazil, identifying the country as a key market. The decision is influenced by Brazil’s regulatory evolution and high cryptocurrency adoption rate. With the goal of reaching 1 billion users globally, Coinbase sees engagement with the Brazilian government and collaboration with local regulators and companies as a key opportunity. Brazil, highlighted for its young population and ranking among the top ten in crypto adoption according to Chainalysis, becomes a strategic focus for the company’s expansion.
A recent survey by Bitget, one of the world’s largest cryptocurrency exchanges, revealed surprising optimism among Latin American investors regarding cryptocurrencies in 2024. Approximately 96% are confident in the market, and 89% plan to increase their investments. The majority, 63.5%, believe that Bitcoin will surpass $45,000. Significantly, 60.1% of respondents view cryptocurrencies as their sole form of investment. The survey included 3,810 users from countries such as Brazil, Mexico, and Argentina. In Brazil, there is a high market maturity, with 17.9% of crypto investors having been involved for more than five years, and 81.8% diversifying beyond Bitcoin (COIN:BTCUSD) and Ethereum (COIN:ETHUSD). Compared to 2022, Bitget recorded a 348% user growth in Brazil from January to November of this year, with a 180% increase in trading volume, while Argentina saw a 202% growth in volume, and Mexico, 217%.
Blockchain.com plans to increase its team by 25% and expand into Europe and emerging markets in 2024. After downsizing its workforce previously, the company is now focusing on Nigeria and Turkey. Curtis Ting, formerly of Kraken, will lead the new European hub in Paris. CEO Peter Smith sees the current phase as an opportunity for growth and market capture, bolstered by recent funding rounds and innovations in payment solutions.
Gemini has updated Earn users on the reorganization plan of the bankrupt cryptocurrency lender Genesis, indicating that they may recover between 61% and 100% of the value of their cryptocurrencies on January 19, 2023. The response to the proposal has been mostly negative, with criticism of the plan’s complexity and concerns about the actual return of assets. Users are expected to vote on the plan by January 10, 2024. If approved, there will be an initial distribution of Genesis assets, but in case of rejection, alternatives may further delay distributions.
Cryptocurrency exchange CoinList has agreed to pay $1.2 million to resolve allegations from the US Office of Foreign Assets Control (OFAC) of violating sanctions by allowing users in Crimea to use its platform. OFAC identified that CoinList opened 89 accounts for customers in Crimea, despite sanctions in place due to Russian occupation since 2014. The fine was reduced due to CoinList’s cooperation and the limited volume of transactions involved. The company expressed its commitment to compliance, planning to invest $300,000 in compliance controls.
The Financial Accounting Standards Board (FASB), responsible for setting accounting and financial reporting standards for businesses and nonprofit organizations in the United States, has adopted new accounting rules for Bitcoin (COIN:BTCUSD), marking a significant advancement in integrating digital assets into corporate accounting. Starting with fiscal years beginning after December 15, 2024, Bitcoin will be accounted for at fair value, aligning it with other financial assets. Industry leaders like Michael Saylor of MicroStrategy (NASDAQ:MSTR) and Fred Thiel of Marathon Digital (NASDAQ:MARA) have praised this move on X, seeing it as a catalyst for corporate adoption of Bitcoin, anticipating a positive impact on corporate management and financial reporting.
During an interview focused on the US Treasury market, SEC Chairman Gary Gensler avoided commenting on applications for spot Bitcoin ETFs. Gensler emphasized the relevance of the $26 trillion US Treasury market and downplayed the significance of crypto securities, citing investor risk due to the lack of regulatory compliance.
Kristalina Georgieva, Managing Director of the IMF, highlighted the need to regulate cryptocurrencies to preserve financial stability. Speaking at a conference in Seoul, she emphasized the importance of clear rules and robust infrastructure, warning about the risks of cryptocurrencies to macrofinancial stability and fiscal sustainability. The conference, focused on digital money, included discussions on regulatory frameworks and CBDCs. Georgieva acknowledged the benefits of digital money and the relevance of experiences in emerging markets like India, while Seoul’s Finance Minister, Choo Kyung-ho, underscored the inevitability of transitioning to digital money.
Switzerland has welcomed Rulematch, a cryptocurrency exchange aimed at banks, with participation from major entities like Spain’s Banco Bilbao Vizcaya Argentaria (BBVA). Integrating Nasdaq technology and Metaco’s crypto custody, Rulematch offers Bitcoin (COIN:BTCUSD) and Ether (COIN:ETHUSD) trading in dollars to selected institutions. This initiative reflects the growing demand for institutional-level cryptocurrency trading solutions, combining strict compliance and advanced features to meet the high standards of the financial industry.
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