HIVE HIVE Digital Technologies Ltd

Possible approval of a Bitcoin ETF could lead to a ‘news-driven sell-off,’ according to a report

A report from CryptoQuant suggests that the approval of a spot Bitcoin ETF could trigger a “news-driven sell-off.” With Bitcoin recovering above $40,000, many holders are sitting on unrealized profits, historically a precursor to price corrections. Miners are also profiting, increasing selling pressure. The price of Bitcoin is expected to drop to around $32,000 in a “news-driven sell-off,” despite the high probability of the ETF being approved by the SEC in early 2024.

Cathie Wood repositions ARK Next Generation Internet ETF’s Bitcoin portfolio 

Cathie Wood’s ARK Next Generation Internet ETF (AMEX:ARKW) has sold all 2.25 million shares in Grayscale Bitcoin Trust (USOTC:GBTC) due to doubts about the trust’s conversion into an ETF. Simultaneously, the fund acquired 4.32 million shares in the ProShares Bitcoin Strategy ETF (AMEX:BITO), which invests in Bitcoin futures (COIN:BTCUSD). The strategy reflects ARK’s caution amid regulatory uncertainty from the SEC regarding the approval of spot Bitcoin ETFs.

Bitcoin mining stocks outperform Bitcoin’s own growth

In 2023, Bitcoin mining stocks posted an impressive performance, outpacing Bitcoin’s 160% increase (COIN:BTCUSD), with Hive Digital Technologies (NASDAQ:HIVE) and Marathon Digital Holdings (NASDAQ:MARA) growing by 251% and 781%, respectively. Notably, these stocks have high short interest, according to Fintel data and Mortensen Bach analysis, and this short interest has contributed to the rising stock prices. The Valkyrie Bitcoin Miners proxy (NASDAQ:WGMI) grew by 132% in three months, compared to Bitcoin’s 53% growth. The increasing interaction between high short interest and rising stock prices indicates a potential short squeeze scenario, potentially driving prices even higher.

Court approves Celsius’ Chapter 11 restructuring

The US Bankruptcy Court in the Southern District of New York has approved Celsius’ restructuring, allowing the formation of a new Bitcoin mining company. This decision, part of the Chapter 11 bankruptcy process, involves a $225 million capitalization and the transfer of specific mining assets, excluding some key assets. Contractual amendments were approved, along with a detailed budget for the settlement. The SEC retains its authority over crypto tokens, setting a new course for Celsius and revised guidelines for creditors.

Bitcoin options volume hits a historic record

According to The Block’s Data Panel, Bitcoin options trading volume (COIN:BTCUSD) reached a historic high, surpassing $38 billion on major derivatives exchanges before the end-of-month, quarter, and year expiration date. Deribit led with $26.7 billion, followed by increases on OKX and Binance. Around $7.7 billion in Bitcoin options are set to expire on Deribit, marking the exchange’s largest expiration. The intense activity signals growing interest among traders in hedging and rolling strategies. Additionally, options volume on the CME also reached a historic high, indicating increased interest from sophisticated market participants.

SEI reaches an all-time high with rapid price rise

The price of the SEI cryptocurrency (COIN:SEIUSD) has made a remarkable recovery since November, reaching a new all-time high of $0.537. This surge was preceded by a significant increase since December 19, marked by a series of strong daily gains. The token experienced a slight drop after the peak, currently at $0.4782, but it marks a 151% increase year-to-date in 2023.

CAKE rises with PancakeSwap’s supply reduction proposal

PancakeSwap’s CAKE token (COIN:CAKEUSD) saw a price increase after the proposal to reduce the maximum token supply from 750 million to 450 million. This change aims to transition PancakeSwap from a high-inflation model to an “Ultrasound CAKE” scenario. Reducing the maximum supply would increase the circulating supply to 59%, potentially increasing scarcity and token value in the market. At the time of writing, CAKE has recorded a weekly increase of 22.5%, with a positive 8.5% gain year-to-date in 2023.

Bitcoin SV shines in the last week of the year

Bitcoin SV (COIN:BSVUSD) stood out as one of the biggest gainers of the week, with an impressive increase of over 70%, reaching a yearly high of 101%. This increase was largely driven by South Korean traders, representing 76% of the total trading volume. Despite the recent growth, BSV is still about 80% below its all-time high.

Vitalik Buterin proposes a change to Ethereum’s PoS model

Vitalik Buterin, the founder of Ethereum (COIN:ETHUSD), has proposed a significant change to the Proof of Stake (PoS) model after the Shanghai upgrade. The current system, with around 895,000 validator objects, faces technical challenges such as processing a high number of signatures, currently 28,000, with a projected 1.79 million. Buterin proposes reducing it to 8,192 signatures per slot, simplifying the operation, improving security, and addressing quantum resistance. This change is crucial for balancing Ethereum’s security, decentralization, and usability. He criticized committee-based security on other blockchains and suggests maintaining high penalties for attackers. Buterin explored three approaches, including decentralized stake pools, two-layer staking, and rotating participation, emphasizing “security through simplicity” in response to concerns about state-level attacks.

zkSync surpasses Ethereum in monthly transactions

n the past month, zkSync, a Layer 2 scaling solution for Ethereum, exceeded Ethereum’s mainnet (COIN:ETHUSD) in transaction volume, processing 34.7 million transactions compared to Ethereum’s 34.2 million. This milestone, primarily driven by the introduction of rollups—a concept similar to Bitcoin’s ordinals—in EVM networks, including Layer 2, highlighted zkSync as the leader in transaction activity, surpassing even Arbitrum (COIN:ARBUSD) with 31.4 million transactions. zkSync, which operates as a Layer 2 network, bundles multiple transactions into a single cryptographic proof, offering faster and more cost-effective processing. Since mid-December, registration transactions have been a key factor in the increase in zkSync’s activity.

Blockchain Blast attracts $1.1 billion in deposits before launch

The Layer 2 blockchain Blast, developed by the NFT Blur team, has accumulated over $1.1 billion in deposits ahead of its scheduled activation in February. The promise of an airdrop in May encouraged $1 billion in deposits in Staked Ether (COIN:STETHUSD) and $103 million in Dai Stablecoin (COIN:DAIUSD). Depositors earn approximately 5% yield and “Blast Points” for the airdrop launch. Despite the initial success, the project faces criticism and comparisons to pyramid schemes, especially for allowing deposits before the platform’s activation.

Swell doubles locked value in staking to $245 million

Swell, a liquid staking protocol, has seen its total locked value double to 108,000 Ether, approximately $245 million. This significant increase followed the introduction of “Pearl” rewards and the expansion of EigenLayer support to include liquid staking tokens like swETH (COIN:SWETHUSD). Swell now positions itself as one of the leading liquid staking protocols, attracting growing interest within the Ethereum ecosystem.

Ripple Labs transfers 310 million XRP from the escrow wallet

In December, Ripple Labs (COIN:XRPUSD) transferred 310 million XRP, approximately $198 million, from its escrow wallet. This leaves about 26.34 million XRP in the wallet, worth $16.7 million. With less than 40 billion XRP tokens in escrow, Ripple plans gradual releases until 2027. Ripple faces challenges, including SEC allegations, but also opportunities in instant payments and partnerships, such as with the National Bank of Georgia.

$2.4 million in Ether moved by wallet linked to Donald Trump

A wallet associated with Donald Trump transferred over $2.4 million in Ether (COIN:ETHUSD) to Coinbase (NASDAQ:COIN), possibly selling accumulated cryptocurrencies. These Ether were generated as royalties from a collection of Trump NFTs on OpenSea. Arkham Intelligence, which monitors the wallet, reported that after months of accumulation, the wallet began sending ETH to Coinbase. Despite Trump’s skepticism about cryptocurrencies, recent documents suggest he profited between $500,000 and $1 million from the sales of his NFT collection.

Artificial intelligence dominates crypto narratives in 2023

A CoinGecko survey revealed that artificial intelligence (AI) was the dominant crypto narrative in 2023, capturing 11.3% of total interest. Driven by the launch of chatbots like ChatGPT, this trend increased focus on AI-related cryptocurrencies, with Akash Network (COIN:AKTUSD) and Render (COIN:RNDUSD) showing significant price gains. Akash Network increased by 1,055% in the last year, while Render rose by 1,003%. Besides AI, GameFi and meme coins were also popular. The sector is paying attention to the legal implications of recent developments, such as the New York Times’ lawsuit (NYSE:NYT) against OpenAI and Microsoft (NASDAQ:MSFT), and innovations like LG’s robotic assistant.

Worldcoin launches identity verification services in Singapore

Worldcoin (COIN:WLDUSD) is expanding its global presence by introducing its innovative identity verification system, Orb, in Singapore. Additionally, Worldcoin has been expanding to other cities worldwide, including several in Spain and Germany, marking a significant step forward in its global identity verification initiative.

Argentina proposes regularization of crypto-assets with tax incentives

Argentina, under newly elected President Javier Milei, proposes a controversial bill to legalize and tax cryptocurrencies, both domestic and foreign. As part of a broader economic reform, the bill encourages voluntary declaration of crypto assets with reduced tax rates, starting at 5% until March and increasing to 15% by November. The measure aims to regularize assets held abroad and faces strong opposition shortly after its introduction. Argentina’s long history of high inflation and monetary instability motivates this initiative.

Bitzlato suspends withdrawals after asset seizure by France

Bitzlato, a Russian cryptocurrency exchange, announced the temporary suspension of “special balance withdrawals” due to legal issues related to the seizure of its assets by French authorities in January. The company, which had its infrastructure and assets seized by other international authorities as well, is facing money laundering and other charges. Its founder pleaded guilty in the United States, agreeing to surrender $23 million.

Levana protocol loses $1.1 million in exploitation on the Osmosis blockchain

The Levana perpetual swap protocol on the Osmosis blockchain suffered an exploitation that resulted in the loss of over $1.1 million from its liquidity pools. The attack lasted 13 days, from December 13 to 26, exploiting network congestion and a bug in Osmosis’s fee market code (COIN:OSMOUSD). This allowed attackers to manipulate prices and drain the pools. Levana is working on a fix and plans to compensate affected users through an airdrop and protocol fee distribution.