GSG Weekly Recap (Jan 8, 2024)
Market Watch
Things to Watch This Week (Jan 8 – Jan 12)
January 10: Bitcoin ETF Approval Decision
This week, the key event that we eagerly await is the SEC's decision regarding the possibility of a spot Bitcoin ETF. Read more on this in our Random Musing This Week.
January 11: U.S. CPI / Initial Jobless Claims
We are also anticipating some important macroeconomic indicators in the Consumer Price Index and the Initial Jobless Claims toward the latter half of the week, as the Fed remains uncertain about the direction it should take in terms of interest rate reduction.
The December CPI report is expected to show headline inflation and the core rate rising 0.3% month-over-month.
Random Musing This Week (Jan 8 – Jan 12)
Bitcoin ETFs on the horizon
The potential approval of a spot bitcoin ETF, possibly as early as this Wednesday, is generating significant interest. BlackRock, the world's largest asset manager, along with several other firms, has submitted updated filings for proposed spot bitcoin ETFs. The approval of a Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC) is a pivotal moment, likely to attract institutional investors and legitimize cryptocurrency as a mainstream asset.
SEC - Say no to "FOMO" about "digital assets"
From the SEC’s Office of Investor Education and Advocacy Twitter
Recently, the SEC has warned investors against the fear of missing out (FOMO) on digital assets, emphasizing the need for careful consideration before investing. Although some perceive the tweet to be in a mocking tone, the crypto community views it as a positive signal.
Post-Bitcoin ETF approval
Following the anticipated approval of the Bitcoin spot ETF, the market focus is expected to shift towards Ethereum, with several Ether ETF applications already queued for SEC review. The CME’s digital asset futures market only involves Bitcoin and Ethereum.
The ETHBTC pair is at its support level of around 0.051. albeit having fallen slightly below the level, as of time of publication.
Nevertheless, the anticipated approval of a Bitcoin spot ETF and the focus shifting towards Ethereum ETFs signify transformative moments for the crypto market.
Recap of Top Stories (Jan 1 – Jan 5)
Interesting
Visa announces web3 loyalty rewards partnership with SmartMedia Technologies.
Commentary: Payments giant Visa has launched a web3 loyalty reward system it says can boost customer engagement. The move will give customers digital wallets that are used to collect tokenized tickets, loyalty coins, digital collectibles, and other perks from brands which can then be applied to virtual and physical experiences.
The enterprise web3 platform SmartMedia Technologies is powering Visa's new web3 loyalty platform. Founded in 2018, SmartMedia Technologies has collaborated with payments firm American Express, consumer goods company Unilever, and the luxury fashion brand Burberry, among others.
Founder of major Taiwanese crypto exchange ACE arrested for alleged fraud.
Commentary: The founder of ACE Exchange, one of the largest crypto exchanges in Taiwan, was arrested on Wednesday on suspicion of orchestrating fraud. The police seized assets worth at least NT$200 million ($6.4 million) in illegal gains.
David Pan, the founder of ACE, was reportedly arrested along with 13 other suspects for alleged fraud. Pan and a co-conspirator surnamed Lin are accused of collaborating for three years, using false advertisements on social media to lure investors into putting money into worthless cryptocurrencies, including MOCT.
SEC wants to leverage partial Terraform court victory in cases against Coinbase and Binance.
Commentary: The Securities and Exchange Commission wants to leverage a partial win in its ongoing court against Terraform Labs in its separate cases against the two largest crypto exchanges, Binance and Coinbase.
In a Thursday filing involving its case brought against Coinbase, the agency submitted the Terraform Lab's court ruling that granted a summary judgment on the claim that UST, LUNA, wLUNA, and MIR tokens are securities. The situation is similar to that of Binance offering BUSD, together with staking-as-a-service, BNB Vault, and Simple Earn program, the SEC said.
DeFi protocol Gamma Strategies suffers an estimated $3.4 million exploit.
Commentary: Decentralized finance (DeFi) protocol Gamma Strategies suffered an exploit resulting in the loss of around $3.4 million. The protocol has taken immediate action to prevent further losses. The team has disabled deposits to all public DeFi vaults while ensuring that withdrawals remain active for users needing to access their funds.
The incident resulted in estimated losses of $3.4 million, with the hacker taking over 1500 ether. BlockSec’s analysis points to a critical vulnerability in the protocol's "accounting mechanism."
Matrixport founder says dissemination of Bitcoin ETF report was ‘beyond our control’
Commentary: Jihan Wu, founder of Bitcoin mining company Bitdeer and crypto financial services firm Matrixport, said that the widespread dissemination of a report claiming that Bitcoin exchange-traded funds (ETFs) may not be approved in January was “not planned by Matrixport and is beyond our control."
The price of Bitcoin fell by more than 10% to $40,800 before recovering. The price action coincided with the release of Matrixport’s report for its clients, where analysts opined that spot Bitcoin ETF proposals, widely believed to be on track for regulatory approval, would be rejected by the United States Securities and Exchange Commission this month.
South Korea proposes a ban on credit card payments for crypto.
Commentary: South Korea’s Financial Services Commission, the country’s top financial regulator, today proposed an amendment to its credit finance act, which aims to effectively prohibit local citizens from purchasing cryptocurrencies using credit cards.
South Korea’s Financial Services Commission, the country’s top financial regulator, today proposed an amendment to its credit finance act to effectively prohibit local citizens from purchasing cryptocurrencies using credit cards.
Radiant Capital reportedly hacked for $4.5 million worth of ETH.
Commentary: Cross-chain lending protocol Radiant Capital was hacked for 1,900 ETH ($4.5 million), blockchain security and analytics firm PeckShield Inc. reported on X today. Radiant Capital acknowledged the issue, saying that the Radiant DAO Council has temporarily suspended its lending and borrowing markets on Arbitrum - a Layer-2 scaling solution on which Radiant Capital runs atop - while the problem is being investigated.
Radiant Capital also ensured in the post that no current funds are at risk, and operations would return to normal after the investigation is completed.
Cboe approves registration for listing Fidelity spot Bitcoin ETF - no SEC approval yet.
Commentary: The United States-based exchange Cboe accepted the registration for listing shares of a spot Bitcoin exchange-traded fund proposed by Fidelity Investments.
In a Jan. 3 filing with the U.S. SEC, the Fidelity Wise Origin Bitcoin Fund said it intended to register its shares as securities listed on the Cboe BZX Exchange. The Form 8-A filing, while part of the process of registering an ETF with the SEC, did not necessarily suggest the commission would approve the investment vehicle.
MicroStrategy co-founder Saylor to sell $216 million worth of company shares.
Commentary: Michael Saylor, co-founder of U.S.-based business intelligence firm MicroStrategy Inc., is selling 315,000 company shares worth nearly $216 million, according to a filing on Tuesday. Saylor previously said during the company’s third-quarter earnings call of 2023 that he plans to use the funds to purchase more bitcoin personally, as well as to address “financial obligations.”
The company continues to be the largest listed corporate holder of Bitcoin. It has racked up 189,150 BTC after its last purchase of 14,620 BTC in December.
OKX to enforce new FCA rules for UK users.
Commentary: Crypto exchange OKX is introducing rules for its United Kingdom-based users as part of new regulatory requirements by the country’s Financial Conduct Authority (FCA). Starting next week, U.K. users will be required to complete an investor questionnaire to prove they understand the risks involved in buying and trading digital assets.
Binance halted the onboarding of new U.K. users on Oct. 16 after the FCA imposed additional restrictions on Rebuildingsociety. On the other hand, OKX has reduced its token offering to around 40 assets and adopted eye-catching risk warnings on its interface to comply with upcoming FCA regulations.
F1 team Sauber agrees to a two-year deal with crypto casino Stake.
Commentary: Formula 1 team Sauber has agreed to a two-year title partnership deal with crypto casino and sports betting platform Stake in 2024. The deal sees the Swiss racing team - which features drivers Valtteri Bottas and Zhou Guanyu - previously under the Alfa Romeo name become Stake F1 Team Kick Sauber.
F1 has become a popular venue for blockchain and cryptocurrency sponsorships in recent years - including Tezos, OKX, Binance, OpenSea, ByBit, and others - though the recent bear market saw some companies pull out.
Vitalik Buterin shares the updated 2024 roadmap for Ethereum.
Commentary: Ethereum co-founder Vitalik Buterin has shared an updated 2024 roadmap for the blockchain, outlining the core priorities for the ecosystem moving forward.
These priorities include the Merge (a robust proof-of-stake consensus), the Surge (a goal of 100,000 transactions per second across Ethereum and its Layer 2 networks), the Scourge (mitigating risks around MEV and liquid pooling), the Verge (easier block verification), the Purge (simplifying the protocol), and the Splurge (everything else).
Vitalik endorsed single-slot finality (SSF) as "the easiest path to resolving a lot of the Ethereum [Proof of Stake] design's current weaknesses" and praised the progress made on L2 networks and with Verkle tree implementations.
FTX bankruptcy could go on for years, legal expert says.
Commentary: Alan R. Rosenberg, a partner at Markowitz Ringel Trusty & Hartog, said the case, filed last November, will drag along longer than some other crypto bankruptcies like Celsius and BlockFi. That's because FTX is litigating multiple clawback claims, or avoidance actions, trying to recover money it paid out in the weeks and months before becoming insolvent.
There are also lawsuits involving what the bankruptcy estate believes were fraudulent transactions, and FTX is currently suing ex-CEO Sam Bankman-Fried and other former executives, as well as Bankman-Fried's parents. There could be more such complaints to come up in the future, Rosenberg said, adding some may concern FTX investments and its political donations.
Orbit Chain's bridge reportedly hacked for $81.5 million.
Commentary: Orbit Bridge, a cross-chain bridge protocol, has seen unusual outflows of $81.5 million in several cryptocurrencies in what appears to be a major hack. In five separate transactions, each to a fresh wallet, the Orbit Bridge sent $50 million in stablecoins, 231 wBTC (about $10 million), and 9,500 eth (about $21.5 million).
The bridge appears to have close ties to the Klaytn ecosystem; Klaytn's explorer shows that 9 of the top 10 tokens on the network by circulating market cap are Orbit Bridge-wrapped assets.
Upcoming Market Events
January 10 - ARK 21 Shares ETF Filing SEC Next Decision Date
January 14 - Bitwise Bitcoin ETP Trust Filing SEC Next Decision Date
January 15 - BlackRock iShares Bitcoin Trust Filing SEC Next Decision Date
January 17 - Valkyrie Bitcoin Fund Filing SEC Next Decision Date
January 26 - Bitcoin Jan 2024 Futures Contracts(BTCF24) Expiration
January 31 - U.S. FOMC Interest Rate Decision
March 31 - Franklin Bitcoin ETF Filing SEC Next Decision Date