Wednesday, 13 December 2023

Market Summary

Market Summary 13 December 2023

Bitcoin Price: US$41,492.39 (+0.58%)
Ethereum Price: US$ 2,203.46 (-0.97%)

BlackRock has revised its spot Bitcoin exchange-traded fund (ETF) application, introducing a new in-kind redemption “prepay” model to facilitate easier participation by Wall Street banks such as JPMorgan and Goldman Sachs. This model allows authorised participants (APs) to create new shares in the fund with cash instead of cryptocurrency, addressing restrictions that prevent banks from holding Bitcoin directly. If approved, this adjustment could enable large banks with trillion-dollar balance sheets to play a more active role in the cryptocurrency market. The revised model also aims to enhance liquidity, reduce transaction costs, and strengthen investor protections while providing resistance to market manipulation. In another development, the European Central Bank (ECB) has assessed the environmental impact of using banknotes, revealing 16 environmental impact categories. The study found that energy use by ATMs and transportation were significant contributors to banknotes’ environmental footprint, prompting the ECB to explore ways to reduce the impact further. Meanwhile, S&P Global has launched stablecoin ratings, ranking Gemini (GUSD), Pax (USDP), and USD Coin highest with a rating of 2 (strong), while Tether (USDT) received a rating of 4 (constrained) based on transparency concerns. Moody’s has also entered stablecoin analysis with its Digital Asset Monitor service.

Terraform Labs co-founder Do Kwon, facing extradition to the U.S. for alleged involvement in the collapse of Terra, will remain in Montenegro until February. Following his arrest in March for using falsified travel documents, Kwon was sentenced to four months in prison. The U.S. and South Korea requested an extension of Montenegrin custody after Kwon’s sentence concluded. If extradited to the U.S., Kwon faces eight criminal charges related to commodities fraud, securities fraud, wire fraud, and market manipulation. Terra collapsed in May 2022, causing a market downturn, with TerraUSD depegging from the U.S. dollar and several firms, including Voyager Digital, BlockFi, Celsius Network, and FTX, filing for bankruptcy. In another development, crypto exchange KuCoin has agreed to pay $22 million to the State of New York and bar residents from using its platform as part of a settlement. KuCoin admitted to operating a cryptocurrency trading platform without being registered as a securities or commodities broker-dealer or exchange in New York. The exchange will close New York residents’ accounts within 120 days and restrict withdrawals within 30 days, allowing users 90 days to withdraw funds. KuCoin, once known for its pro-privacy policy, ended its policy by announcing mandatory KYC for all users in June 2023. Additionally, layer-2 network StarkWare and the Starknet Foundation plan to distribute a 10% cut of network fees to developers as part of the “Devonomics” pilot program. StarkWare will allocate 8% to decentralised app builders and 2% to infrastructure engineers and core developers through transparent and open voting. The initiative aims to support developers and contribute to the expansion of the Starknet ecosystem. Initial distributions will be in ETH before transitioning to the Starknet governance token, STRK.

The Chinese Ministry of Public Security is set to launch RealDID, a blockchain-based platform for verifying the real-name identities of citizens. Developed in collaboration with the Blockchain Service Network (BSN), RealDID will offer personal real name confirmation, data encryption and certification, private logins, business identities, personal identification certificate services, and information vouchers on personal identity. Chinese citizens can register and log into online portals anonymously using decentralised identifier (DID) addresses, ensuring privacy in transactions and data exchanges. The initiative follows a recent mandate in which six Chinese social media platforms, including WeChat, required content creators with 500,000 to 1 million followers to display their real names and financial backing publicly. China continues to accelerate initiatives around emerging technologies, including artificial intelligence, central bank digital currencies (CBDCs), and cryptocurrencies, while also working to reduce dependency on U.S.-made semiconductor chips by boosting domestic production. In the cryptocurrency market, Bitcoin stabilised around $41,000 ahead of the last U.S. interest rate decision for the year, with altcoins showing varied performance. Celestia’s native TIA token surged to a record high of $12.35 as it announced integration with Polygon’s Chain Development Kit (CDK), while the Chinese blockchain firm KuCoin agreed to pay $22 million to the State of New York and bar residents of the state from using its platform.

Three U.S. presidential candidates, including entrepreneur Vivek Ramaswamy, former Arkansas Gov. Asa Hutchinson, and Democrat Rep. Dean Phillips, pledged to revitalise the cryptocurrency ecosystem and alleviate regulatory pressures on crypto companies during an event hosted by the Coinbase-backed Stand with Crypto Alliance. While each candidate had varying approaches, they shared a common theme of creating a clear, cohesive regulatory framework for digital assets. They criticised the Securities Exchange Commission’s (SEC) crackdown on crypto exchanges, including Coinbase, Kraken, and Binance, calling for a reduction in the SEC’s powers. The candidates discussed blockchain’s potential to disrupt traditional finance, emphasising transparency and a fairer financial system. In a separate development, Binance announced the end of ruble support on its peer-to-peer (P2P) trading platform as the company exits Russia following its sale to CommEX. The move comes as part of Binance’s compliance strategy and amid increased regulatory scrutiny.


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