Following an impressive rally, bitcoin took a breather this week as investors are awaiting the SEC’s decision on a spot Bitcoin ETF in early January. While down almost 5% over the past seven days, bitcoin is still on track to outperforming all major asset classes, hovering at a gain on the order of 160% year-to-date. In contrast, the recent strength in token prices of major alternative Layer 1 blockchains is unchanged amid large trading volumes. Altcoins such as Solana (SOL), Cardano (ADA) and Avalanche (AVAX) hit new annual highs this week, adding billions of dollars to their market capitalization. US equities also extended their rally on Thursday against the backdrop of the US Fed’s plans to cut rates more than expected in 2024, with the Dow Jones Industrial Average surpassing 37,000 for the first time in history as investors are betting on a “soft landing” in 2024. The Nasdaq is shaping up to record its best performance since 2009 after gaining more than 51% this year. On the interest rate front, the Fed now expects its Fed Funds Rate rate ending 2024 at just 4.6% against 5.1% projected three months earlier, suggesting 75 basis points of rate cuts next year. The US inflation rate is playing a part in this forecast, as it continues to approach the Fed’s 2% goal. On Tuesday, US CPI data in November came in broadly in line with expectations, with core CPI increasing by 4% year-on-year (yoy) while headline inflation (ex food and energy) rose by 3.1% yoy. As for a potential soft landing, global economic indicators remain mixed. While US business activity expanded at the fastest pace in five months, economic activity in both the eurozone and China continues to weaken, according to recent PMI and consumer spending data, respectively.
Market Overview
The global cryptoasset market capitalization currently amounts to roughly $1.65 trillion – down from $1.68 trillion last week, with bitcoin accounting for about 49.5%. Among the Top 30 cryptoassets by market cap, Injective (INJ) outperformed, gaining about 79% over the week. The price of bitcoin (BTC) fell by 4.4% to $41,765 while the price of ether (ETH) decreased by 4.9% to $2,235. The total value locked (TVL) in DeFi is sitting at roughly $52 billion, with Ethereum (excluding Layer 2s) currently accounting for about 56% of TVL.
This Week’s Headlines
- Change to the structure of BlackRock’s spot Bitcoin ETFs would enable authorized participants to create new shares with cash
- SEC denies Coinbase’s 2022 petition for rulemaking
- Coinbase to bring TradFi assets on-chain with new platform built on base under Abu Dhabi regulator’s oversight
- FASB publishes new crypto rules that will let firms use fair-value accounting
- Crypto exchange KuCoin to shut in New York, pay $22 million to settle lawsuit, Reuters reports
- FTX says IRS demand for $24 billion in unpaid taxes is delaying recovery of user funds
- Supply chain attack targets Ledger crypto wallet users
- DeFi protocol SafeMoon files for Chapter 7 bankruptcy after exec arrests, SEC charges
- Former US President Donald Trump launches new “Mugshot Edition” NFT collection
Notable Deals and Fundraising
- Asian messaging giant LINE raises $140 million to expand NFT venture
- UK-regulated crypto derivatives venue GFO-X announces a $30 million Series B round led by M&G Investments
- Dynamic Labs secures $13.5 million of Series A funding in round led by a16z crypto
- Digital asset brokerage firm Nonco raises a $10 million in seed funding
- Farcana raises $10 million for NFT esports shooter that pays out bitcoin
- Bitcoin rewards provider Lolli raises $8 million in Series B funding
- NodeKit closes $1.2 million pre-seed round to build Avalanche-based network for rollups
- Web3-focused news organizations Decrypt and Rug Radio to merge their operations next year, Axios reports
- Early Ethereum backers Cyber.Fund to invest $100 million in “cybernetic economy”
