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On Wednesday, Bitcoin (COIN:BTCUSD) faced a 4.5% drop, reaching US$42,930, influenced by the expectation of news from the Federal Reserve and the possible approval of a Bitcoin ETF. Other cryptocurrencies such as Ether (COIN:ETHUSD), Solana (COIN:SOLUSD) and XRP (COIN:XRPUSD) also saw significant drops.
These fluctuations reflect the market’s tension due to uncertainty surrounding the SEC’s decision regarding the Bitcoin ETF.
The TD Cowen financial institution predicted that the US SEC would approve a Bitcoin spot ETF by January 10, considering it a “policy necessity” to solidify its regulatory role before broader cryptocurrency legislation. On the other hand, Matrixport, a digital asset management company, reported that the US SEC might reject all Bitcoin ETF applications due to regulatory concerns. One day after predicting that Bitcoin could reach $50,000, the company indicated that the ETF approval could be delayed until the second quarter. Matrixport suggests that disapproval could trigger a sharp drop in Bitcoin’s price, potentially down to $36,000, and advises investors to protect themselves with put options or short positions.
Fernando Pereira, an analyst at Bitget, also examined the recent cryptocurrency market volatility. “BTC was optimistic about the possible approval of Blackrock’s ETF today, January 3rd, as rumors suggest. This was enough to make the price rise more than 8% in the first 48 hours of the year and liquidate thousands of traders who were in a short position. More than $140 million to be exact. It’s important to be cautious and not buy in the euphoria at this moment, as institutional players may take advantage of this liquidity to sell their positions and reverse the market,” Pereira commented on Wednesday morning.
Furthermore, today marks the 15th anniversary of Bitcoin’s conception by Satoshi Nakamoto as an alternative to traditional banks, with the white paper published on October 31, 2008, and the Genesis Block mined on January 3, 2009, initiating the era of cryptocurrency.
BlackRock (NYSE:BLK), the world’s largest asset manager, plans to invest $10 million in Bitcoin (COIN:BTCUSD) on January 3rd, betting on the approval of the first spot Bitcoin ETF in the United States. The news, revealed by market analyst James Seyffart, suggests that this initial investment is a strategic move by BlackRock, although it does not guarantee the immediate launch of the ETF. Seyffart considers the date symbolic, coinciding with the anniversary of the Bitcoin Genesis block. The purchase of $10 million is considered standard but subject to change, reflecting market dynamics and the expectation of SEC approval for the ETF.
The Grayscale Bitcoin Trust (USOTC:GBTC) saw a trading volume of $338 million on January 2, 2023, contrasting with the peaks of 2021. The highest volume in the last 12 months was $400 million on August 29, 2023. GBTC’s discount to Net Asset Value (NAV) decreased to about -5%, potentially influenced by the expectation of Bitcoin ETF (COIN:BTCUSD) approvals. Grayscale reported revenue of $40 million in November 2023, its highest since April 2022, despite GBTC’s 2% annual fee. Emerging ETFs charging lower fees may put pressure on GBTC in the market.
The stablecoin USDC (COIN:USDCUSD), pegged to the dollar, experienced significant drops to $0.74 on three occasions today due to mass sell-offs driven by uncertainties about the approval of a spot Bitcoin ETF. These drops occurred on Binance, with USDC reaching $0.80 and $0.79 before returning to $1. This can happen when large USDC sales for USDT (COIN:USDTUSD) exceed available liquidity. Over $500 million in derivatives were liquidated after a report suggested the SEC’s rejection of Bitcoin ETFs.
Michael Saylor, co-founder of MicroStrategy (NASDAQ:MSTR), plans to sell $216 million in company stock options with the intention of buying more Bitcoin (COIN:BTCUSD) for his personal portfolio. The announcement, made in an SEC filing, reveals that Saylor will sell 310,000 stock options granted in 2014. He will begin selling 5,000 shares daily from January 2nd to April 25th, aiming to meet financial obligations and acquire additional Bitcoins. Saylor, a Bitcoin advocate, holds a significant personal stash of the cryptocurrency valued at over $800 million.
The Ethereum Name Service (ENS) governance token (COIN:ENSUSD) recorded a more than 50% increase on Wednesday, driven by praise from Vitalik Buterin, co-founder of Ethereum. Buterin highlighted the importance of ENS for layer 2 blockchains (L2), encouraging its integration to improve transactions and accessibility. After these comments, ENS reached $12.54, its highest value since April, rising from a low of $8.50. At the time of writing, the token’s price was up by 30.6% at $13.44.
The value of the Internet Computer cryptocurrency (COIN:ICPUSD) has risen by 184% in the last four weeks, reaching a peak of $16.30 today. This significant growth, which began in October 2023, has broken important resistance levels, surpassing a long-standing horizontal area. ICP’s weekly RSI indicates a strong upward trend, despite being in overbought territory. Cryptocurrency analysts and traders are optimistic about ICP’s future trend, predicting a potential increase to $22, but also warning of the possibility of a sharp drop if the upward trend is interrupted. At the time of writing, ICP’s price was up 3.8% at $14.49.
The ARB token from Arbitrum (COIN:ARBUSD) reached a new high above $2 on Wednesday, with the total value locked (TVL) in the network surpassing $2.5 billion. The 14.7% appreciation in the last 24 hours outperformed the broader cryptocurrency market, with on-chain volumes of Arbitrum-based applications exceeding $920 million. Arbitrum’s growth, even surpassing the volume of Solana-based applications, was attributed to the token incentives offered by the platform and increased rewards on decentralized exchanges like GMX and Gains Network.
Osmosis (COIN:OSMOUSD), a Cosmos-based DEX, achieved an impressive monthly trading volume of $1.121 billion in December 2023, marking a milestone since May 2022. The OSMO platform’s token grew by 95% in the last month, trading at $1.50. Osmosis stands out for its dual role as a DEX and automated market maker (AMM), allowing users to create customizable liquidity pools. Its interoperable and custody-free infrastructure, part of the Cosmos SDK ecosystem, has attracted renewed interest, driven by new projects and airdrop frenzies where users stake tokens to earn rewards and potential additional tokens.
The SEI token (COIN:SEIUSD) from the Sei blockchain reached a record high of $0.847500, with a 70% increase in the past week. This growth is attributed to significant advancements in the Sei ecosystem, including the processing of over 1.1 billion transactions. The coin, now with a market capitalization of $1.495 billion, stands out for its fast transaction finalization and improved efficiency through internal parallelization of the Ethereum Virtual Machine (EVM). Strategic partnerships and the impact of meme coins, especially the cult term “SEIYAN,” have also contributed to increased interest and investment in SEI.
The cryptocurrency market is revitalized, with notable price increases in digital assets, highlighting Solana (COIN:SOLUSD), Borroe Finance (ROE), Chainlink (COIN:LINKUSD), and Polkadot (COIN:DOTUSD). Under the recommendation of ChatGPT, an artificial intelligence tool, Solana is identified as a strong contender, with its impressive annual growth of 770% and its position as the fifth-largest cryptocurrency. Borroe Finance emerges as an innovative Web3 financing solution, enabling NFT creation for businesses. Chainlink, with a 145% growth, expands its capabilities, strengthening its market position. Polkadot also stands out with its recent updates and partnerships, promising innovations with Polkadot 2.0.
CleanSpark (NASDAQ:CLSK), a US-based Bitcoin miner, intends to establish an in-house trading desk in 2024 to optimize returns from its significant Bitcoin reserves (COIN:BTCUSD). According to CEO Zachary Bradford, the decision to manage assets internally makes financial sense due to the company’s large Bitcoin balance. With 2,575 BTC worth approximately $116 million in its possession, CleanSpark plans to use strategies based on regulated cryptocurrency offerings. Bradford anticipates that more miners will follow this path, offering greater control over asset risk and management.
Etherscan, a leader in Ethereum network analysis (COIN:ETHUSD), began 2024 with significant expansion by acquiring Solscan, the leading block explorer for Solana (COIN:SOLUSD). This acquisition integrates Solscan into the Etherscan ecosystem, which already includes BNB Smart Chain’s BscScan. The goal is to capitalize on Solana’s rapid growth, bolstering it with the expertise of the Etherscan team. This move represents progress for both platforms, promoting the adoption of web3 technology and strengthening their position in the growing decentralized finance (DeFi) market.
Binance, one of the leading cryptocurrency exchanges, saw its market share drop to 44.5% in 2023, a significant decline from 60% in 2022, according to Kaiko data. This reduction was influenced by regulatory challenges in various countries, including withdrawals from Canada, the UK, and parts of Europe. In the US, lawsuits and SEC allegations, such as listing unregistered securities, also impacted the company. Despite this, Binance attracted 40 million new users in 2023, raising its global user base to 170 million and investing significantly in regulatory compliance.
The cryptocurrency exchange OKX announced that, starting January 8th, it will implement new requirements to comply with the standards of the UK’s Financial Conduct Authority (FCA). Users in the UK will need to complete two questionnaires, one to assess their knowledge of cryptocurrency investment risks and another to determine users’ experience and understanding of crypto investments. This measure applies to new and existing users in the UK and is mandatory to maintain an account on OKX. This action aims to ensure compliance with FCA regulations, including a warning about the risks of cryptocurrency investment.
The Klaytn Foundation, responsible for South Korea’s Klaytn blockchain, announced the integration of the $GPC (Gold-Pegged Coin) token and the DeFi Goldstation platform on its blockchain. Developed by Kakao, Klaytn stands out for offering the first gold token in DeFi outside of Ethereum, without charging percentage fees on transactions. $GPC users will benefit from low Klaytn gas fees, favoring small gold investments. Goldstation will initiate services such as $GPC staking on January 24th, with plans for future global expansion. Klaytn has been expanding its use cases in DeFi, real asset tokenization, and collaborations, such as with the Bank of Korea’s CBDC pilot project.
Radiant Capital, a DeFi lending protocol, paused its activities on Arbitrum after an attack resulted in the loss of 1,900 ETH, equivalent to approximately $4.5 million. The issue was identified in its newly launched native USDC market on Arbitrum. Security firms like CertiK point to a flash loan attack that exploited rounding errors in the contract’s calculations. Fake accounts on X (formerly Twitter) took advantage of the incident to spread phishing links, but the impact on the protocol’s total value locked was limited, remaining around $315 million.
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