Wednesday, 20 December 2023

Market Summary

Market Summary 20 December 2023

Bitcoin Price: US$42,275.99 (-0.90%)
Ethereum Price: US$ 2,177.91 (-1.87%)

MicroStrategy’s Executive Chairman, Michael Saylor, emphasised the significance of upcoming spot Bitcoin ETFs, suggesting it could be the most significant development on Wall Street in 30 years. He compared it to the introduction of the S&P 500 ETF, highlighting the potential to provide mainstream investors with a high-bandwidth, compliant channel to invest in Bitcoin. Saylor predicted a demand shock for Bitcoin, driven by the ETF, followed by a supply shock after the halving event in April. In another development, Ondo Finance expanded its tokenised real-world assets, including U.S. Treasury-backed tokens, to the Solana blockchain, joining the growing trend of tokenising traditional assets on blockchain networks. The move follows Circle’s introduction of the euro-backed stablecoin EURC to the Solana ecosystem. Meanwhile, HashKey Capital’s Singapore subsidiary secured a Capital Markets Services license from the Monetary Authority of Singapore, allowing it to provide fund-management services in the country, reinforcing the convergence of traditional and digital financial ecosystems in the region.

OKX Wallet users are urged to update their iOS app due to a critical Remote Code Execution (RCE) vulnerability found in a previous version, posing a risk of compromising sensitive data and crypto assets. Cryptocurrency wallets and exchanges have been increasingly targeted by hackers recently, with incidents at Poloniex, HTX, Heco, and Atomic Wallet. In another development, bankrupt crypto lender Genesis has secured a court order to prevent its parent company, Digital Currency Group (DCG), from selling or reducing ownership until Chapter 11 proceedings conclude. This move aims to preserve tax benefits linked to Genesis remaining part of DCG’s tax-consolidated group. Immutable has launched “Immutable Passport,” a new wallet infrastructure that enables users to create and recover their wallets using Google or Apple accounts or email addresses. Five games and apps, including Gods Unchained and TokenTrove, have already implemented Immutable Passport, providing a familiar and secure experience for users.

FTX debtors have reached a global settlement with the Joint Official Liquidators for the firm’s Bahamian arm in the ongoing bankruptcy proceedings. The debtors plan to pool assets with FTX Digital Markets, aiming to distribute funds to users of the defunct exchange. The settlement, subject to court approval, outlines a reimbursement plan for users in U.S. dollars, excluding non-fungible tokens (NFTs). FTT interests against FTX Debtors and FTX Digital Markets will be treated as equity without recovery. This development is part of FTX’s bankruptcy proceedings following the exchange’s collapse in November 2022. Meanwhile, the core development team behind the Ethereum proof-of-work (PoW) hard fork has decided to disband, with EthereumPoW continuing with PoW as its main consensus and transitioning to decentralised governance. Existing EthereumPoW servers will be transferred to OneDAO on the Harmony network for transitional maintenance. EthereumPoW was created to preserve the original Ethereum’s PoW mechanism after the Ethereum mainnet transitioned to proof-of-stake. The move comes after Grayscale Investments halted support for post-Merge Ethereum PoW tokens, citing liquidity concerns. In another development, Marathon Digital is set to acquire two operational Bitcoin mining sites for $178.6 million, preparing for the 2024 Bitcoin mining reward halving. The acquisition from Generate Capital adds 390 megawatts of capacity, boosting Marathon’s total mining capacity to 910 megawatts. Marathon aims to own and run 45% of its mining capacity, with plans to double its hash rate to 50 exahashes over the next two years. The deal is expected to reduce the cost of mining a single Bitcoin by 30% and enhances Marathon’s ability to capitalize on energy hedging opportunities.

Major players in the race to launch a spot Bitcoin exchange-traded fund (ETF) in the United States are adjusting their strategies to align with the Securities and Exchange Commission’s (SEC) preference for a cash redemption model. BlackRock and ARK Invest, prominent applicants for a Bitcoin ETF, have amended their S-1 registration statements filed with the SEC. The changes emphasize a move towards cash redemption rather than in-kind redemptions involving non-monetary payments like Bitcoin. The SEC’s insistence on a “cash-only” approach requires authorised participants to use cash to obtain more ETF shares, ensuring transparency in sourcing underlying Bitcoin. WisdomTree, another global ETF provider, has also filed for an S-1 amendment but retains the option for in-kind creation and redemption. The adjustments signal a broader trend in the industry, with other ETF applicants like Invesco and Galaxy previously updating their S-1 filings to comply with the “cash-only” model. Meanwhile, the SEC has delayed decisions on multiple Ether ETFs, including the Hashdex Nasdaq Ethereum ETF and the Grayscale Ethereum Futures ETF, pushing the final decision to May 2024. Analysts suggest that the SEC could approve spot Bitcoin ETFs as early as January 10, 2024, with a high probability of approval, driving market optimism and price gains in both Bitcoin and Ether over the last six months. Amid these developments, the blockchain space has witnessed a recent surge in a “gold rush” for inscriptions, causing disruptions across several blockchain networks due to the mass inscription of diverse digital content directly on-chain. This trend, observed in platforms like Arbitrum, Avalanche, Cronos, zkSync, and The Open Network, has triggered partial or complete outages, reflecting the intersection of technological experimentation, market dynamics, and regulatory considerations in the blockchain domain.


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