Wednesday, 24 January 2024

Market Summary

Market Summary 24 January 2024

Bitcoin Price: US$39,897.60 (+0.83%)
Ethereum Price: US$ 2,242.60 (-3.09%)

SEC Commissioner Hester Peirce, also known as “Crypto Mom,” expressed that a court ruling might not be necessary for the approval of spot Ether (ETH) exchange-traded fund (ETF) applications by the United States Securities and Exchange Commission (SEC). She cited the Grayscale court ruling that preceded the approval of spot Bitcoin ETFs as a precedent, but acknowledged the differences in each ETF application. Several major firms, including BlackRock, VanEck, ARK 21Shares, Fidelity, and Invesco Galaxy, are seeking SEC approval for spot Ether ETFs. Bloomberg ETF analyst Eric Balchunas estimated a 70% chance of approval by May. Meanwhile, the Crypto Fear & Greed Index hit a 100-day low, dropping to a neutral sentiment range of 48, reflecting market concerns following the decline in Bitcoin prices post the approval of spot ETFs. The index considers various factors, including volatility, market momentum, social media, surveys, Bitcoin’s dominance, and trends. Bitcoin’s recent price decline prompted a decrease in sentiment, marking a 100-day low for the index. Additionally, the United States Air Force signed its first-ever deal for operational-level quantum computing software with Purdue spinout Quantum Research Science (QRS). The $2.5 million contract aims to build and support quantum computing software for the Air Force’s global logistics, marking a significant step toward incorporating quantum technology into military operations. Currently, classical binary computers handle military logistics, but quantum computers, with their ability to work with more variables simultaneously, offer potential advantages, such as faster processing and improved accuracy in supply chain forecasting. QRS’ quantum software demonstrated a 28% speedup over existing software running on binary computers.

The Financial Industry Regulatory Authority (FINRA) reported that around 70% of crypto-related communications from a recent survey contained “false, exaggerated, promissory, unwarranted, or misleading” claims or violated guidelines on public communications. The regulator reviewed over 500 crypto asset-related retail communications, identifying potential substantive violations of its rules. FINRA Senior Director Ira Gluck emphasised the need for clear descriptions of risks and features in crypto-related communications, which can range from podcasts to Super Bowl ads. This scrutiny follows a surge in problematic communications, with crypto firms facing questions about their public communications practices. In a separate development, cross-chain lending blockchain Radiant Capital has started repaying debts after a $4.5 million flash loan exploit earlier this month. Radiant made an initial payment of 1,190 Ether ($2.6 million), with approximately 720 ETH ($1.6 million) of bad debt remaining. The remaining debt will be paid off over the next 90 days. The exploit occurred on Radiant’s USD Coin lending pool on the Arbitrum network, highlighting the risks associated with DeFi protocols. Additionally, JPMorgan analysts downgraded cryptocurrency exchange Coinbase’s stock to “underweight,” citing falling Bitcoin prices and the approval of spot BTC exchange-traded funds (ETFs). The analysts suggested that the enthusiasm for cryptocurrency ETFs could deflate, impacting token prices, trading volume, and ancillary revenue opportunities for firms like Coinbase. The investment bank had previously categorised COIN as “neutral” but predicted a price target of $80 by December 2024, emphasising the potential negative impact of listing multiple spot Bitcoin ETFs.

OKX will compensate users for losses incurred during a flash crash in its native token (OKB) on January 23, where the price dropped 48%, wiping out $6.5 billion in market capitalisation. Users affected by abnormal liquidation will receive full compensation, with details to be provided within 72 hours. Simultaneously, a coordinated hacking and phishing campaign targeted Web3 companies, including Cointelegraph, with scammers stealing over $580,000. Exploiting email addresses and allegedly breaching the email service provider MailerLite, attackers used malicious links for phishing emails. In separate news, Invesco and WisdomTree reduced fees on their European-listed exchange-traded products (ETPs) by over 60%, following the fee war trend post the US spot Bitcoin ETF approval.

The trustee of the defunct Mt. Gox exchange has reportedly initiated the process of Bitcoin repayments by reaching out to creditors for identity verification and confirmation of account details. Creditors received emails indicating the completion of identity verification for accounts earmarked for Bitcoin and Bitcoin Cash repayments. This development comes as Mt. Gox moves ahead with bank account repayments, and some creditors have reported receiving double payments. Meanwhile, the Bank for International Settlements (BIS) Innovation Hub has outlined its 2024 work program, revealing plans to proceed to the second phase of central bank digital currency (CBDC) privacy testing and launch a blockchain-based tokenisation project called Promissa. Additionally, blockchain research platform Arkham Intelligence claims to have identified the on-chain addresses of Bitcoin backing several spot BTC exchange-traded funds (ETFs) in the U.S., including BlackRock, Bitwise, Fidelity, and Franklin Templeton, providing transparency on BTC holdings.


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