“With their increasing importance, dollar-backed stablecoins are set to have a profound impact on the financial sector, potentially reshaping how money is moved across borders.” – Andrew Peel, Morgan Stanley’s head of digital assets
Biweekly News Roundup
1. Bitcoin and Cryptocurrency Market Trends
Launch and impact of spot Bitcoin ETFs: Spot bitcoin ETFs began trading on Jan. 11, with bitcoin surging to $49,000 in the minutes after their launch. Spot Bitcoin ETFs generated just over $1.8B in total volume on Jan. 16. In comparison, the combined Jan. 16 trading volume for all 500 ETFs launched in the US in 2023 at just $450M. Bitcoin ETFs top 3X daily volume of all 500 ETFs launched in 2023 combined. Bitcoin ETFs amass 95,000 BTC in 6 days, approaching $4B AUM.
Bitcoin’s price movements and rallies: The rise was fleeting and the crypto market remained around 14% down on its highs. Bitcoin price rallied to $42K after options expiry on Jan. 26, a reduction in inflation and a positive report from JP Morgan boosted BTC’s prospects.
Dogecoin’s performance: Dogecoin hits seven-day high as “XPayments” account gains 100,000 followers in a day.
Predictions for Bitcoin’s future prices: Pixelmatic and JAN3 CEO Samson Mow has given one of the most “outrageous” predictions yet for Bitcoin, hinting that the BTC price may well be on its way to $1M.
Bitcoin’s 50-week SMA and 200-week SMA crossover: The 50-week simple moving average (SMA) on bitcoin has crossed over the 200-week SMA for the first time on record, confirming the golden cross and indicating a positive shift in asset prices.
Ether options trading surge: January witnessed a remarkable surge in Ether options trading, reaching an all-time high of $17.9B.
Ethereum development updates: Ethereum devs expect 10x lower rollup costs as Dencun upgrades hit testnets.
Polygon’s user growth: Layer-2 scaling network Polygon almost acquired as many crypto users as Ethereum in 2023 while Bitcoin came in third.
Bitcoin’s anticipated halving and market optimism: The upcoming halving is less than 100 days away, and market observers are optimistic about the possibility of a new Bitcoin ATH.
Global Bitcoin ATM distribution: 106M people around the world currently hold the cryptocurrency and there are now Bitcoin ATMs in more than 80 countries.
Bitcoin mining sustainability metrics: The Bitcoin ESG Forecast has revealed that Bitcoin mining using sustainable energy has increased to a new all-time high of 54.5%, with sustainable mining rising by 3.6% overall during the calendar year of 2023.
2. Global Cryptocurrency Adoption and User Base
Increase in global cryptocurrency users by the end of 2023: More than half a billion people had become cryptocurrency users or owners by the end of 2023, increasing by 34%.
Projections for user base growth by the end of 2024: Bitfinex predicted that the global cryptocurrency user base would increase to an estimated 950 million people by the end of 2024.
3. Institutional and Financial Market Developments
Morgan Stanley’s commentary on the U.S. dollar and digital assets: Morgan Stanley said the dominance of the U.S. dollar as the linchpin of the international financial system is being increasingly questioned due to shifting geopolitical currents and the US growing twin deficits. The recent growth in interest in digital assets such as BTC, growth of stablecoin volumes and the promise of CBDCs, have potential to significantly alter the currency landscape.
BlackRock’s spot Bitcoin ETF achievements: BlackRock’s spot BTC ETF hit the $2B assets under management mark, becoming the first of the recent cohort of bitcoin ETF providers to hit the milestone.
SEC’s decisions on cryptocurrency-related ETFs: The SEC pushes decision on BlackRock’s spot Ethereum ETF to March.
Circle’s USDC usage and impact on blockchain transactions: Since Circle’s introduction in 2018, USDC has been used to settle over $12 trillion in blockchain transactions. USDC use for Asia remittances is surging as the Asia-Pacific region accounts for 29% of all global digital currency value received, compared to 19% for North America, and 22% for Western Europe.
Performance of crypto projects in Switzerland and Liechtenstein: The value of crypto projects based in Switzerland and Liechtenstein has increased by 107% year-over-year to $382.93 billion.
Fidelity’s predictions on stablecoins and DeFi: Fidelity predicts stablecoins and DeFi resurgence will be ahead of Fed rate cuts. Fidelity also anticipates corporations becoming more comfortable adding digital assets to their balance sheets.
4. Regulatory and Legal Developments
SEC’s case against Coinbase: A federal judge heard oral arguments from the SEC and Coinbase on JAN. 17 in the exchange’s move to dismiss the case against it. It could take days to months to deliver the ruling.
U.S. businesses and cryptocurrency transaction reporting: US businesses won’t yet need to report cryptocurrency transactions above $10K to the IRS until the tax agency releases a regulatory framework.
Cryptocurrency tax rankings by U.S. state: Florida has been named the “best state” for cryptocurrency taxes in the US, while the state of New York was named the worst state.
5. Technology Integration and Innovation
Blockchain governance discussions at the World Economic Forum: The 54th World Economic Forum, held in Davos from January 15-19, addressed topics from geopolitical tensions to AI’s impact.
Big Tech companies’ valuations and AI initiatives: With Big Tech set to dominate AI, decentralizers made the case for a blockchain governance layer for the next era of the internet. Microsoft crossed a 3-trillion valuation and Apple resided at the top spot with a valuation of $3.03T.
Nvidia and NSF partnership for responsible AI: Nvidia and the National Science Foundation partnered to advance responsible AI discovery and innovation.
Google Research’s AI video generator Lumiere: Google Research just unveiled Lumiere, an AI video generator capable of creating five-second photorealistic videos from simple text prompts.
Bitcoin-based digital art auction at Sotheby’s: Bitcoin-based digital art image “Genesis Cat” sells for $254K in Sotheby’s auction.
Mercedes-Benz’s virtual assistant with NFT and AI capabilities: Mercedes-Benz unveils in-car virtual assitant with NFT and generative AI capabilities.
6. Corporate Cryptocurrency Holdings and Strategies
Tesla’s Bitcoin holdings and ranking among public asset holders: Tesla maintained its Bitcoin holdings of over 9,720 BTC in Q4 2023, ranking as the third-largest public holder of the asset after MicroStrategy and Marathon.