Welcome to the latest edition of our newsletter, where we cover the highlights of the past week in the rapidly evolving world of blockchain and decentralized technologies.
(as of 10:30 AM Singapore Time, December 22, 2023)
In a week of notable developments within the cryptocurrency market, regulatory advancements across major economies have been a focal point. South Korea and the United States are bolstering cooperation in crypto regulation, particularly emphasizing consumer protection. Meanwhile, China is poised to release a Web3 strategy that could significantly influence the global crypto landscape despite its crypto ban. Additionally, the U.K. is innovating with a Digital Securities Sandbox to explore tokenization and Distributed Ledger Technology (DLT) under regulatory supervision. These moves reflect a growing trend towards integrating cryptocurrency into mainstream financial systems and could have far-reaching impacts on market dynamics.
Amidst these regulatory shifts, Bitcoin has seen a remarkable 20% increase in value, nearly reaching $44,000. This surge is partly fueled by the ongoing discussions and developments surrounding Bitcoin ETFs, a topic that has captivated the market’s attention. Notably, BlackRock, Nasdaq, and the SEC have been in talks about the necessary rule changes for listing a Bitcoin ETF, focusing on mitigating market manipulation risks. Moreover, BlackRock’s revised spot Bitcoin ETF proposal, featuring cash creation and redemption mechanisms, is aligned with the SEC’s preferences and could significantly boost the chances of approval. These developments, coupled with MicroStrategy Executive Chairman Michael Saylor’s assertion of the potential impact of Bitcoin ETFs, indicate a growing institutional interest in cryptocurrency. Saylor’s comparison of the forthcoming BTC Spot ETF to the last major Wall Street development, the S&P 500 ETF, underscores the transformative potential of this new investment vehicle. This enthusiasm and anticipation for Bitcoin ETFs are key drivers behind Bitcoin’s recent price rally and signal a possibly more expansive role for cryptocurrencies in mainstream finance.
Alongside Bitcoin’s notable ascent, Ethereum has also experienced a commendable increase in its value, climbing approximately 13% to settle around $2,200. This uptick in Ethereum’s price reflects the broader market’s positive sentiment and possibly anticipates the network’s ongoing developments and upgrades. In an even more striking performance, Solana has registered an astonishing 84% weekly increase, with its price soaring to $98. This remarkable surge positions Solana tantalizingly close to challenging its April 2022 high of $112. Over the past few months, Solana has consistently outperformed other large market cap cryptocurrencies, showcasing its robustness and the growing investor confidence in its ecosystem. Solana’s advancement is particularly noteworthy in the context of the broader market dynamics, becoming yet another challenger to Bitcoin’s dominance over the crypto market.
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- Solana DEX Volume Surpasses Ethereum: In a landmark event for the Solana blockchain, its decentralized exchange (DEX) volume surpassed that of Ethereum’s for the first time, primarily driven by the frenzy around meme coins like BONK and Dogwifhat. Solana’s DEX volume reached $9.03 billion over a week, slightly edging out Ethereum’s $8.836 billion. This surge is attributed to the lower gas fees on Solana and the explosive growth of its meme coins, with BONK achieving a billion-dollar market cap and Dogwifhat witnessing a 376,000% increase since its launch.
- Argentina Embraces Cryptocurrency: Argentina, under its new crypto-friendly government led by President Javier Milei, has taken a significant step in embracing digital currencies. The nation’s foreign minister, Diana Modino, confirmed that Bitcoin and other cryptocurrencies can now be used in official contracts. This move aligns with Milei’s vision to counter the inefficiencies of centralized financial systems and marks an important milestone for the adoption of cryptocurrencies in Argentina, especially amid the local currency’s struggles with hyperinflation and devaluation.
- Ethereum’s Dencun Upgrade: Ethereum developers have set January 17, 2024, as the target date for the first testnet deployment of the ‘Dencun’ upgrade on the Goerli testnet. This significant upgrade, introducing “proto-danksharding,” aims to reduce fees for layer 2 rollups and increase data storage capacity on Ethereum. While the original plan was to launch in late 2023, complexities pushed the schedule to early 2024. This upgrade marks Ethereum’s next major step following the Shapella upgrade, which enabled ether withdrawals from staking.
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- Elon Musk’s X App Payment Launch: Elon Musk’s “everything app” X is set to launch in-app payment services by mid-2024. While cryptocurrency integration is uncertain, Musk, in a discussion with Cathie Wood of ARK Invest, indicated that the integration of popular cryptocurrencies like Dogecoin or Bitcoin is not confirmed. Despite this, Tesla and The Boring Company have embraced crypto payments to some extent. Musk’s focus on bureaucratic processes and money transmitter license applications is crucial for the launch. His view of money as a resource allocation database highlights his broader vision for X’s payment services.
- Tether Freezes $435M for US Authorities: Tether, the world’s largest stablecoin issuer, has frozen over $435 million in USDT across 326 wallets at the request of U.S. law enforcement agencies, including the DOJ, FBI, and Secret Service. This action is part of Tether’s efforts to combat illicit activities and support law enforcement. The company emphasizes its commitment to preventing the misuse of its stablecoin, USDT, through extensive KYC/AML programs, cooperation with global agencies, and tools for monitoring transactions. This move underscores Tether’s aim to align with U.S. interests and expand dollar hegemony globally.
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Note: BTSE Blog contents are intended solely to provide varying insights and perspectives. Unless otherwise noted, they do not represent the views of BTSE and should in no way be treated as investment advice. Markets are volatile, and trading brings rewards and risks. Trade with caution.