Synopsis
- Latest on the Bitcoin ETF!
- Bitcoin makes merry in December
- PancakeSwap community votes to reduce max supply
- FIU slaps show–cause notice on Binance on other exchanges
- Biggest winner and loser of the week
Key Observations
Analysis
What’s happening on the Bitcoin ETF forefront?
Major players in the cryptocurrency space are gearing up in anticipation of the potential approval of Exchange-Traded Funds. There has been speculation surrounding updates from the SEC about the date for approval.
Let’s discuss how institutions are preparing to welcome this:
- Earlier this year, Coinbase hired a new executive to head its custody department. The move came as major financial firms like BlackRock, Franklin Templeton, and Grayscale Investments have tasked Coinbase to provide custodial services should their funds be approved.
- BlackRock announced that Jane Street and JP Morgan as authorized participants, who will acquire the bitcoin on behalf of BlackRock, which is not legally allowed to purchase the cryptocurrency itself.
- Fidelity also named Jane Street Capital and JP Morgan Securities as authorized participants. It also said its proposed fund would have a sponsor fee of just 0.39%, which so far is speculated to be the cheapest fund.
As the race for the ETF heats up, Bitcoin managed to reclaim April 2022 levels of $45,000.
Bitcoin celebrates a fruitful December
Bitcoin has witnessed a strong finish to 2023 as it charged towards April 2022 levels of $45000. It also recorded a new high of $890B in market cap, and a 50% surge in 24-hour trade levels pushed the volume to over $25B.
Figure 2: Let us take a look at some of the other achievements by Bitcoin in December 2023.
- In December 2023, miners in the Bitcoin network witnessed the highest revenue of the year at an impressive $1.51 billion. This notable sum, which includes a record-breaking $324.83 million generated from on-chain transaction fees, sets a new benchmark within the cryptocurrency industry.
- As per blockchain reporter Colin Wu, December witnessed the highest-ever sales month for NFTs created on the Bitcoin blockchain. “Cryptoslam data reveals that NFT sales on the Bitcoin chain reached $881,223,753.92 in December 2023, establishing a new record for the highest single-month sales. This includes 111,713 buyer addresses and 98,744 seller addresses, both marking the highest single-month records to date.”
Governance Vote on PancakeSwap
PancakeSwap has witnessed a governance vote with 98% of its voters choosing to cut down the maximum supply by 300 million tokens. This move is a significant step in positioning the decentralized exchange’s token to capture a larger market share across various blockchain networks. The protocol’s plan will introduce a maximum cap of 450 million CAKE, aiming to address concerns related to token inflation and foster sustained growth.
Figure 3: CAKE supply has been reduced after the recent governance voting
The CAKE community has grappled with inflation since its inception in 2021, and after three years of development, the focus has now shifted towards reducing the total supply and moving away from hyperinflation. The project team believes that establishing a new cap of 450 million CAKE is a reasonable approach, ensuring an ample supply for future expansion while maintaining a deflationary trajectory over the long term.
Trouble brewing in crypto-paradise?
The Financial Intelligence Unit (FIU) sent a show cause notice to cryptocurrency exchange Binance. The nodal agency claims that Binance and other crypto exchanges have been non-compliant with the money laundering policies and have been operating through an off-shore entity to bypass these regulations.
The other cryptocurrency firms to which notices have been sent are Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex.
The FIU also wrote to the Ministry of Electronics and Information Technology (MEITY) asking them to block these services’ websites. We await responses from these firms to see how this situation develops. The FIU further added that cryptocurrency firms are required to report suspicious activity like traditional banking institutions and abide by the Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) framework in place.
Deep dive into the top gainer and loser
We closely analyze the performance of the top 50 coins by market capitalization and take a closer look at the best and the worst performers of the week.
Top gainer of the week: Internet Computer Protocol (ICP) up by 44.43% ⬆️
Opinions:
Technical Analysis: ICP is expected to break out from the resistance at 13.36, and this seems unlikely considering the current levels. We can anticipate the levels of 12.32 if current levels fail to hold. The buying action corresponds to price rally and we anticipate a correction from current levels.
Oscillator indicators: 1 bearish, 8 neutral, 2 bullish
Moving average indicators: 1 bearish, 1 neutral, 13 bullish
Biggest loser of the week: Near Protocol (NEAR) down by 11.50% ⬇️
Opinions:
Technical Analysis: NEAR has seen nearly a 100% surge over the last month. This correction was anticipated. NEAR is likely to move within the specified range before trying to break out of the 4.25 level. In case, current levels fail to hold NEAR will test the support at 3.76.
Oscillator indicators: 2 bearish, 9 neutral, 0 bullish
Moving Average indicators: 0 bearish, 1 neutral, 14 bullish
Conclusion
The cryptocurrency market was marked with important events. The markets recovered, with Bitcoin touching $45k after April 2022. Bitcoin finished the year strongly in terms of the NFT markets and miner revenues. FIU slaps Binance and other exchanges with a notice of non-compliance and Pancakeswap votes to combat inflation. These events round up this week’s highlights.
