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Bitcoin (COIN:BTCUSD) saw a significant increase of 5.3%, reaching $42,020, buoyed by the reduction in outflows from the Grayscale Bitcoin Trust (AMEX:GBTC), easing investor concerns and propelling weekly gains into positive territory. Fernando Pereira, analyst at Bitget, highlighted the bullish scenario for cryptocurrencies, supported by recent economic data: “The US GDP much above expectations (even by the Fed itself), coupled with labor data as strong as the pre-pandemic period and an inflation that has been falling each quarter mitigated the risk of a US recession in the coming months. An optimal scenario for investments in cryptocurrencies and variable income assets in general,” commented Pereira.
Other experts pointed to a decrease in GBTC selling pressure as a sign of stabilization in the cryptocurrency market after recent turbulences. According to an analysis by Kaiko, Bitcoin emerged as a superior safe haven, surpassing traditional assets like gold, US bonds, and the dollar in investment return. Investing in Bitcoin since the beginning of last year could have yielded profits over 100%, contrasting with the more modest returns of other conventional assets. This trend reinforces Bitcoin’s position as a safe asset in times of crisis, evidenced by the reduction of its correlation with traditional markets like the Nasdaq 100.
In parallel, Ether (COIN:ETHUSD) also experienced a 2.5% increase, though it is on track for an 8% weekly drop.
The newly approved spot Bitcoin ETFs by the SEC adopt a cash creation mechanism for issuing and redeeming shares, diverging from the common in-kind creation models for commodities like gold and silver. BlackRock, in the documentation for its iShares Bitcoin ETF, argued in favor of in-kind creations but followed SEC guidance for a cash creation model due to regulatory complexities. The brokers responsible for the transactions, due to uncertainty about how to apply financial rules when dealing directly with Bitcoin, face risks when using the cryptocurrency for fund transactions. BlackRock expressed concerns about the efficiency of the cash creation model, indicating potential impacts on the accuracy of share values and on arbitrage, suggesting that in-kind creation could be more effective in maintaining congruence between the share price and the value of Bitcoin.
On the tenth trading day of the Spot Bitcoin ETFs, there was an $80 million withdrawal from the sector. Grayscale (AMEX:GBTC) lost $394 million. In contrast, BlackRock’s ETF (NASDAQ:IBIT) recorded an impressive inflow of $170 million, raising its total above $2 billion. Fidelity’s ETF (AMEX:FBTC) also had a profitable day, with inflows surpassing $100 million. The total Bitcoins held by the nine new ETFs is now approximately 131,340.
Kraken, a cryptocurrency exchange, has strengthened its team with two high-level executives to boost growth and navigate the complex global regulatory landscape. Gilles BianRosa joins as Chief Operating and Product Officer, bringing experience from companies like N26 and Samsung. Marcus Hughes takes on the role of Chief Regulatory Strategy Officer, bringing his expertise from Coinbase (NASDAQ:COIN), aiming to adapt Kraken to an ever-evolving market and regulatory environment.
Oppenheimer bank upgraded its recommendation for Coinbase (NASDAQ:COIN) shares to “Outperform” from “Perform,” setting a target price of $160. After a challenging period, Coinbase stands out for its resilience and strong management, according to analyst Owen Lau. Confidence in the company grows with the prospect of winning a lawsuit against the SEC and playing a crucial role in the new Bitcoin ETFs. Despite competition and low ETF fees, Coinbase is expected to remain attractive to investors and see a significant increase in trading volume, especially with the reduction in interest rates and upcoming favorable events for Bitcoin (COIN:BTCUSD).
The UK Supreme Court refused Craig Wright’s appeal in his defamation lawsuit against Peter McCormack, deciding that the case does not present a significant legal issue. In July, Wright was awarded only 1 GBP in damages against McCormack, who questioned Wright’s claim of being Satoshi Nakamoto, the creator of Bitcoin (COIN:BTCUSD). Wright unsuccessfully attempted to appeal the decision twice, marking another setback in his ongoing legal disputes within the crypto community.
The US government announced plans to liquidate approximately $117 million in Bitcoin (COIN:BTCUSD), confiscated during a drug seizure operation on the dark web. In 2021, the assets were seized from Ryan Farace and Sean Bridges, with Farace also forfeiting an additional 59 bitcoins. Farace, known as Xanaxman on the dark web, was previously charged by the Department of Justice for selling Xanax illegally in exchange for Bitcoin. The sale of the seized bitcoins is subject to legal procedures, with potential impact on the cryptocurrency market.
Mark Scott, a lawyer associated with the OneCoin scheme, was sentenced to ten years in prison for laundering $400 million from the project, seeking to sustain a lavish lifestyle. The judge criticized Scott for selling his Porsche and moving the money to the Cayman Islands, instead of reimbursing the victims of the scheme. Scott maintains his innocence, while facing charges amidst the ongoing investigation into the notorious OneCoin scheme.
OKX, a cryptocurrency exchange, announced the closure of its mining pool due to internal restructuring. From January 26, new registrations were suspended, and the services will be completely deactivated on February 26. The company apologized for the inconvenience caused by the decision, which affects access to various cryptocurrencies like Bitcoin (COIN:BTCUSD) and Ethereum Classic (COIN:ETCUSD). The change comes at a critical time for miners, with the impending Bitcoin halving.
Canaan (NASDAQ:CAN), known for its cryptocurrency mining platforms, raised over $50 million through the issuance of preferred shares, aiming for improvements in R&D and increased production. The Nasdaq-listed company announced the sale of up to 125,000 Series A preferred shares to an undisclosed institutional investor. The funding will be directed towards expansion and corporate objectives, despite a net loss in the last quarter.
As the Bitcoin (COIN:BTCUSD) halving approaches, miners are strategically increasing the sale of their assets, intensifying selling pressure on the market. Analyses indicate that these sales aim to cover operational costs and prepare for the future, with a notable reduction in Bitcoin reserves and an increase in transfers to exchanges. This strategic move, highlighted by CryptoQuant, suggests a potential impact on Bitcoin (COIN:BTCUSD) prices in the short term.
With the recession in China’s stock market, local investors like Dylan Run are diversifying their portfolios to include Bitcoin (COIN:BTCUSD) and other cryptocurrencies, despite the government’s ban. Navigating restrictions with creative methods, they view cryptocurrencies as a stable investment in times of economic uncertainty.
Flipside Crypto reported a significant increase in blockchain activity and user numbers throughout 2023, with Ethereum and Polygon leading in new user acquisitions. After a year of extreme fluctuations, network activity and user engagement ended on a high, especially after May, when the Silicon Valley Bank collapse boosted interest in decentralized alternatives. The analysis anticipates that 2024 will be dominated by DeFi activities, with an increase in interaction with Layer 2 networks.
Aleo, an innovative privacy-focused blockchain network, is set to launch its mainnet, having overcome the last technical challenges. With the mission to incorporate privacy into cryptocurrency transactions, Aleo has undergone rigorous testing and audits to ensure the robustness of its platform. The initiative, backed by academic advancements and a dedicated team led by Alex Pruden, promises to unlock new use cases in confidential payments and identity solutions, enhancing blockchain technology adoption with private transactions and smart contracts by default.
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