Tuesday, 16 January 2024

Market Summary

Market Summary 16 January 2024

Bitcoin Price: US$41,732.35 (-2.60%)
Ethereum Price: US$ 2,472.87 (-4.09%)

The Fantom Foundation has reduced the validator self-staking requirement on its layer-1 blockchain, Fantom, by 90%, cutting the staking threshold from 500,000 FTM to 50,000 FTM. This move, following a governance vote in June 2023, aims to enhance Fantom’s security and accessibility for validators, making it more challenging for malicious actors to launch attacks. The foundation anticipates faster transaction processing with an increased number of validators. Despite concerns, Fantom assures that the lower staking requirements won’t compromise security, as a validator’s transaction confirmation power is proportionate to its staking amount. In a separate development, TrueUSD, the stablecoin linked to Justin Sun, has fallen below its $1 peg, dropping to $0.988 amid reports of holders exchanging hundreds of millions of TUSD for Tether. The depegging event coincides with an elevated selling volume of TUSD on Binance and reports of difficulties in providing real-time attestations of its reserves, suggesting potential under collateralisation. Traders speculate that the outsized sell-off may be related to TUSD not being listed in Binance’s Manta launch pool initiative. In the US, crypto investment products witnessed significant inflows, particularly in United States-based funds, totalling $1.24 billion, after the recent approval of spot Bitcoin ETFs by the SEC. This surge in trading volumes, reaching a new weekly all-time high of $17.5 billion, reflects increased investor interest, with Bitcoin products leading the inflows at $1.16 billion, followed by Ether funds and XRP. CoinShares noted that US-based products dominated inflows, while Canada, Germany, and Sweden-based products experienced outflows as traders switched to the US market following ETF approvals.

Despite a $20 billion decrease in its circulating supply from $45 billion to $25 billion in 2023, the number of wallets holding at least $10 worth of USD Coin (USDC) increased by 59%, reaching over 2.7 million, according to a report by Circle. The decline in USDC’s circulating supply was attributed to factors such as rising interest rates, regulatory crackdowns, and market challenges. Circle acknowledged the coin’s role as a bridge between the digital asset economy and traditional finance, with over $197 billion in USDC being minted or burned during the year. Despite the challenges, Circle reported growing acceptance of USDC, reinforcing its position in the market. In other blockchain developments, the Avalanche blockchain’s inscription tokens, ASC-20 tokens, have gained significant interest following the success of Bitcoin Ordinals and BRC-20 tokens. The ASC-20 protocol enables the creation, trading, and holding of customised tokens for various projects on the Avalanche blockchain, with over 100 million inscriptions since its inception in June 2023. A Chinese-language Twitter Space session hosted by Bitget on Avalanche inscription token Avascriptions (AVAV) attracted over 585,000 listeners, signalling strong investor interest. However, the surge in popularity has also attracted bad-faith actors, with warnings of fake token listings. Additionally, Binance Research highlighted the significant growth of BRC-20 tokens, including Bitcoin Ordinals, as one of the most important narratives of 2023. The BRC-20 token standard played a crucial role in the growth and dominance of Bitcoin, increasing its market dominance from 40.4% to 50.2%. The report emphasised the impact of inscriptions and BRC-20 tokens on Bitcoin’s mempool transaction count and market capitalisation, considering it an important narrative that will continue into 2024.

An anticipated interest rate cut by the United States Federal Reserve in 2024 could lead to renewed institutional interest in decentralised finance (DeFi) and stablecoins, according to Fidelity’s 2024 Digital Assets Look Ahead report. Fidelity expects institutions to explore DeFi for its yields if they become more attractive than traditional fixed-income yields. Improved infrastructure in 2024 could contribute to institutions having “renewed interest” in DeFi. Additionally, Fidelity predicts that corporations may become more comfortable putting digital assets on their balance sheets, and it sees institutional exploration of U.S. dollar-pegged stablecoins as a significant catalyst for adoption in 2024. The report anticipates that regulatory frameworks will become clearer, providing more certainty, and projects stablecoins like Tether and USD Coin to maintain their ground in 2024. In a separate development, BlackRock’s advertising strategy for its spot Bitcoin exchange-traded fund (ETF) is seen as targeting wealthy boomers with a calm disposition, easy-to-understand investment cases, and a lack of crypto jargon. The intentionally “boring” ad is viewed as effective in reaching this demographic, with analysts noting its appeal to the adult and wealthy investor segment. Finally, Solana Mobile is reportedly planning to launch a second crypto-ready smartphone following the success of its first device, Saga. The upcoming phone will feature an onboard crypto wallet, custom Android software, and a dApp store for crypto applications at a lower price point and different hardware. The Saga smartphone’s limited supply has created a red-hot secondary market, with prices on eBay reaching five times the original price. The new Solana Mobile phone aims to capitalise on the success of its predecessor.

Source:
https://cointelegraph.com
https://coindesk.com 

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