Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | December 23 - December 29, 2023

Crypto Weekly Recap: Price Actions, Market Trends, and Key Developments

Bitcoin:

• Weekly change: -2.47%
• BTC's dominance fell to 51.24% as of Friday, a 3.58% weekly drop.
• BTC briefly fell below $43,000 on Christmas, then rose to $43,900 amid SEC's ETF deadline and BlackRock's $10M Bitcoin ETF investment.
• Crypto investment products attracted $103 million inflows before the Bitcoin ETF.
• BTC hit a weekly low of $42,100 during a market selloff, influenced by Mt. Gox repayment reports.
• Bitcoin dipped to $42,000 on Wednesday, rebounded near $43,000, with significant Coinbase transfers suggesting potential major holder liquidations.
• The Smart Money Index soared to a record 13,711, reflecting bullish institutional sentiment before the SEC's Bitcoin ETF decision.
• Over 90,000 addresses held more than $1 million in BTC.
• Other institutions updated Bitcoin ETF info during the week, but it had minimal market impact.
• MicroStrategy's substantial BTC purchase announcement on Wednesday night pushed BTC over $43,800.
• Bitcoin's momentum stalled on Thursday; dominance hit a 2-month low of 51.43%, sparking altseason interest.
• Short-term holders cashed out over $1.2 billion in Bitcoin profits.
• Bitcoin became the 16th largest global currency by market cap.
• Bitcoin's on-chain activity indicated a bullish trend, with a record 28,000 BTC outflow worth $1.19 billion, hinting at institutional interest.
• Bitcoin miner reserves dropped to a May low of 1.832 million BTC, with 3,000 BTC sold in 24 hours.
• Over 178,000 Bitcoin and 1.49 million Ethereum options contracts expired on Friday, worth $7.6 billion and $11 billion, respectively, signaling market anticipation.

Ethereum:

• Weekly change: +5.14%
• ETH surpassed BTC last week, rising above $2,400.
• Ether's climb to nearly $2,500 was fueled by excitement over an upcoming network upgrade, Vitalik Buterin's proposal to ease validator burden, and a spike in DApp usage. Ethereum's dominance in DApp deposits, transaction volume growth, and layer-2 solutions boosted its lead.
• Before its rise, Ethereum dipped to a weekly low of $2,200 amid Mt.Gox news.
• Ethereum began its ascent over $2,300 on Wednesday, coinciding with a decline in BTC dominance.
• On Thursday, Ethereum's 8.9% jump to $2,448 outdid Bitcoin and Solana, spurred by a wider altcoin surge.
• Ethereum's increase was eclipsed by scaling tokens: Optimism (OP), Arbitrum (ARB), and Polygon (MATIC).
• Ethereum held steady above $2,300 on Friday as traders braced for the options expiry.

Altcoins:

• MEXC reassured users following the deletion of its CEO's account amidst withdrawal issues, denying claims of freezing user assets.
• Curve Finance reimbursed the total amount stolen in July.
• Solana hit nearly $126 on Christmas Day — its highest since April 2022, and surpassed Bitcoin and Ethereum in weekend trading volume, but its SOL token fell below BNB in crypto rankings due to profit-taking by major holders.
• Japan decided to eliminate corporate tax on unrealized crypto profits.
• Epic Games lifted its ban on Adults Only rated games.
• Meme coins like ANALOS and SILLY on Solana created a new group of millionaires.
• Crypto VC funding plummeted by 68% in 2023 compared to the previous year.
• China's State Administration of Foreign Exchange cracked down on a $2.2 billion crypto exchange ring.
• Layer-2 ZKSync resumed operations after a 5-hour network outage on Christmas Day.
• TEL's value dropped 42% following a $1.3M theft in a Telcoin exploit related to Polygon Wallet.
• MATIC surged after Mark Cuban sold his Polygon (MATIC) holdings to Coinbase.
• Grayscale underwent a board reshuffle as Barry Silbert exited.
• South Korea announced plans to disclose top public officials' crypto holdings next year.
• Thunder Terminal was hacked for 86.5 ETH, but claimed funds were safe after a $240K attack.
• Bitcoin SV surged to $104, with significant South Korean trader involvement and Coinbase planning to sell its BSV holdings.
• Binance's former CEO CZ's wealth soared by $25 billion in 2023, despite facing a potential prison sentence.
• IOTA’s ShimmerEVM enhanced cross-chain capabilities with LayerZero's technology.
• Binance Coin (BNB) recovered impressively, surpassing $310 and reclaiming the top 4 spot from Solana, despite earlier declines and an SEC lawsuit.
• Ledger Live faced scrutiny over alleged user tracking, according to an app developer and privacy advocate.
• Worldcoin expanded globally with its Singapore launch.
• Cardano's Chang Hard Fork was scheduled for early 2024.
• Blast reached $1.1B in deposits more than a month before its official launch.
• Levana Protocol suffered over a $1 million exploit on the Osmosis blockchain.
• A court approved a $225M deal for Celsius mining company, avoiding a securities ruling.
• Privacy tokens DASH, ZCH, and XMR dropped as OKX announced trading suspension.
• PancakeSwap's community agreed to remove 300 million tokens from its supply.

Bitcoin ETFs: Growth and Regulatory Challenges

The burgeoning world of Bitcoin ETFs, spotlighting their growth, regulatory challenges, and market impact has emerged. Key developments include the U.S. launch of leveraged bitcoin futures ETFs and ether futures funds. The anticipated approval of spot bitcoin ETFs is expected to significantly elevate Bitcoin's value, attracting substantial investor interest. 

Regulatory debates focus on the SEC's cash-only redemption policy, influencing industry strategies and global approaches, with contrasting views from U.S. and Hong Kong regulators. Industry leaders offer varied predictions on the ETFs' long-term effects, highlighting the dynamic and evolving nature of the cryptocurrency market.

Mt. Gox Saga: Repayments and Ongoing Impact

Nearly a decade post-Mt. Gox's collapse, creditors are receiving initial repayments, with small Japanese Yen amounts appearing in PayPal accounts. Orchestrated by trustee Nobuaki Kobayashi, the complex repayment plan extends into 2024, involving various payment tranches. 

The process, marked by a recent error causing double payments to some creditors, has elicited mixed reactions, ranging from relief to skepticism. This development, amidst the ongoing legal intricacies, highlights the enduring impact of the Mt. Gox saga on the cryptocurrency landscape, serving as a reminder of the sector's risks and complexities.

MicroStrategy's Bitcoin Acquisition and Market Influence

MicroStrategy acquired 14,620 Bitcoin for $615.7 million between November and December 2023, raising their total to 189,150 BTC, worth approximately $5.9 billion. This purchase, averaging $31,168 per Bitcoin, signifies their aim to own about 1% of Bitcoin's market cap, currently at 0.9%. 

CEO Michael Saylor's bullish stance on Bitcoin contrasts with concerns about spot Bitcoin ETFs, which critics argue could lead to market distortions and undermine decentralized finance. This significant investment by MicroStrategy highlights the increasing influence of institutional players in the cryptocurrency market and their belief in Bitcoin's long-term value.

Ethereum's Rise Amid Altcoin Rally and Layer-2 Solutions

Ethereum surged 8.9% to $2,448 at one point on December 28, buoyed by the altcoin rally and Bitcoin's Q4 performance. Despite trailing Solana's 951% gain, Ethereum's layer-2 solutions like Arbitrum and Optimism enhance its scalability. Arbitrum, with $5.77 billion in assets, saw its token ARB jump over 20% in 24 hours. Vitalik Buterin proposes reducing Ethereum's validator signatures to streamline the network. 

Meanwhile, Donald Trump sold 1,075 ETH, roughly $2.4 million, but retains significant Ethereum holdings. These developments reflect Ethereum's growing strength and adaptability in the crypto landscape, underscored by layer-2 advancements and influential market activities.

India Targets Crypto Exchanges for AML Non-Compliance

India's Financial Intelligence Unit is targeting nine major crypto exchanges: Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex, for non-compliance with Anti-Money Laundering laws. These exchanges are accused of operating illegally in India without proper registration. The FIU has issued compliance notices and requested the Ministry of Electronics and Information Technology to block their URLs. 

This move is part of India's stringent efforts to regulate the virtual asset sector and enforce financial regulations. Currently, 31 virtual asset service providers are compliant with India's regulatory framework, highlighting the government's commitment to overseeing the digital asset market.

FTX Debtors' Repayment Plan Sparks Discontent

FTX debtors' proposed repayment plan values Bitcoin at $16,871, markedly below its current market rate, sparking customer discontent. This plan, based on values at FTX's bankruptcy, includes prices for various cryptocurrencies like Ether and Binance Coin. Customers, facing substantial value losses, have until January 11 to object, with a hearing set for January 25. 

The plan's acceptance could lead to significant losses for crypto holders, as it doesn't reflect recent market gains. This has led to widespread frustration among FTX customers, who stand to lose out on the recent surge in cryptocurrency prices.

Terraform Labs Faces SEC Over Unregistered Securities

A U.S. federal judge ruled that Terraform Labs and CEO Do Kwon sold unregistered securities, including LUNA, UST and MIR, siding with the SEC. The court, however, didn't classify Mirror Protocol's mAssets as security-based swaps. Applying the Howey test, it found LUNA and MIR tokens led investors to expect profits from Terraform's efforts. 

Terraform's motion to exclude SEC expert testimonies was denied, but the SEC's similar motion was also rejected. Fraud claims, involving a $40 billion market loss, will go to trial in January 2024. Terraform disagrees with the ruling, particularly on UST's classification, and plans a vigorous defense.

Avalanche Foundation's Meme Coin Investment Strategy

The Avalanche Foundation plans to buy meme coins using its $100 million NFT fund, aiming to diversify and embrace the crypto culture. This initiative, part of their Culture Catalyst program, will focus on Avalanche-based meme coins, selected based on holders, liquidity, and social sentiment. 

Meme coins like COQ, HUSKY, and SHIBX on Avalanche have already seen price surges. Despite some skepticism, the foundation views these coins as more than just assets, but as symbols of the crypto community's spirit. This move reflects a broader market trend, acknowledging the significant role of meme coins in the crypto ecosystem.

Catalyx Exchange Halts Trading After Security Breach

The Canadian crypto exchange Catalyx has suspended all trading and withdrawals following a security breach, suspected to involve an internal employee. The breach, which led to undisclosed losses of client crypto assets, prompted a cease trade order from the Alberta Securities Commission on December 21. 

Catalyx, founded in 2018 and registered with FINTRAC, has engaged Deloitte for forensic and investigative services. The exact amount of lost assets remains undisclosed. Amidst a bull market in May 2021, Catalyx reported a significant increase in monthly trading volume. The ongoing investigation seeks to uncover the full extent and details of the breach.

Pink Drainer Group's $4.4 Million Chainlink Heist

The "Pink Drainer" group stole $4.4 million in Chainlink (LINK) by deceiving a victim into authorizing a transaction. They swiftly transferred 275,700 LINK in two moves, with one wallet receiving 68,925 LINK. Scam Sniffer linked this to Pink Drainer, noting their involvement in numerous Discord and Twitter hacks. 

Their illegal gains jumped from $3 million to $18.7 million since June, affecting 9,068 victims. The group converted the stolen LINK to Ether (ETH), laundering it through an exchange named eXch. This highlights the persistent cybercrime threat in the crypto world, emphasizing the need for robust security measures.

Top Weekly Altcoin Gainers and Losers

Gainers:

Bitcoin SV BSV (+110.12%)

Mina MINA (+56.21%)

Sei SEI (+55.16%)

Ordinals ORDI (+50.73%)

Optimism OP (+43.54%)

Losers:

Bonk BONK (-23.92%)

WEMIX WEMIX (-16.38%)

FTX Token FTT (-13.85%)

Helium HNT (-13.26%)

Bitget Token BGB (-12.77%)