MARKET WRAP

1. ‘Tis the Season for Hibernation - Crypto Market said

CoinDesk - December 27, 2022. at 6:52 AM

Cryptos

Comparing the crazy market affected by the FED announcements from 2 weeks ago, Christmas market was fairly quiet as investors wound down for festive activities and a series of awkward, yet sweet family dinner. This left the BTC’s Relative Strength Index (RSI) momentum appearing a bit lifeless since its move was tethered on neutral territory only.

As such, BTC was trading flat between $16,500 and $16,800 over the Christmas weekend. ETH also mirrored the largest cryptocurrency by market cap by marching sideways marginally above $1,200. Prices have been projected to hover more or less at the same level in the upcoming days due to the compounding effect of volume reduction that is historically typical of year-end trades and enterprise activities.

Another noticeable event taking place last week, which cast a straightforward effect on the most trusted value-storing cryptocurrency, was the voluntary discontinuation of mining activities as the extreme weather of winter got the best of the entire US, putting a strain on the nation’s power grid. As a consequence, this has drawn public attention to a fleeting, yet concerning on-chain dip in BTC’s hash rate.

Considered by a large number of investors as a requisite for the founding network’s security, Bitcoin’s hash rate measures how many hashes are produced daily by Bitcoin miners. A declining number in hash rate could mean that fewer fences (in the case of PoW consensus algorithm - miners) are employed to hold down the fort.

While billions of people on the Earth were sound asleep at midnight on Christmas’ Eve, waiting for Santa to do his highly-anticipated job, US-based BTC miners were suffering from widespread outages, and hence forced to unplug their mining rigs from the central electricity supply as the biting cold hit them as well as millions of other US citizens.

Statistics released by the Cambridge Bitcoin Electricity Consumption Index indicated that the United States accounts for a massive 37.84% of the average monthly hash rate share as some states’ regulation deems favorable to not only mining operation but also power cost. That’s why when the US mining population was cut off from the mainstream, the heavy weight imminently burdened on the rest of the system, which manifested through a precipitous 39% decline in the token hash rate, as observed from CoinWarz data (Figure 1).

 

As the following week approaches, the number of hashes proposed on the network has seen a certain setback, though has not regained as much of its footing as before the holiday’s peak at 276.4 EH/s.

Other high-profile cryptocurrencies also witnessed some minor corrections as the market withered to an unappealing submission towards last weekend but has since shown promising forays into the green zone as a new week is dawned upon the bear Cryptoville. XRP, the token of the public blockchain Ledger XRP, got a decent 1.7% 7D slide at $0.346 on Sunday and has increased 6.9% to over $0.36 cents within the past 24 hours. On the other hand, the valuation of L2 platforms’ native tokens - Polygon's MATIC and the autonomous blockchain platform Cardano's ADA - tumbled to a dismally lower level, $0.79 (declining 3.2%) and $0.25 (declining 3.8%) over a week span of comparison, but then bounced back to their feet by a ceiling of 2% each.

Equities

Decoupling from the volatile neighborhood Cryptoville, Wall Street experienced slight upticks in quite a diversity of major indexes, namely the S&P 500, the Dow Jones Industrial Average, and the technology-heavy Nasdaq Composite all rising by 0.6%, 0.5%, and 0.2%, respectively.

As of the glittering gold market, the week was a roller coaster. Although spot trading was triggered with a leap to $1,816 per ounce over the first half of the week, the joy was not quite fulfilled during the second half when it plummeted by 2% on Thursday and has since gained back traction.

Insights

Although the current market is in a sensitive period with no actual prediction of whether the market will recover or not, the accusation of North Korea building their effort to hack South Korean crypto exchanges seems like really bad news.

The South Korean National Intelligence Service (NIS) which was tasked with responding to North Korean cyber threats asserted that while North Korea has historically targeted South Korean cryptocurrency exchanges, it is now concentrating on the citizens. Besides that, they will also focus on the decentralized finance (DeFi) in South Korea. According to the NIS, hackers working in Pyongyang, the center of North Korea, would "concentrate on targeting DeFi providers" in 2023 because there is a regulatory imperfection in the South for these services.

Seoul has condemned North Korea for hacking $7 million from Bithumb in February 2017 and stealing 17% of the cryptocurrency assets from the Youbit platform in 2017, ultimately driving it into bankruptcy. Since then, exchanges have been overseen by Seoul with higher security levels. The North, however, refuted claims that they hacked South Korea’s crypto market, calling these claims “lies”’.

Takeaways

- The last few days of 2022 are poised to comprehend the fact that trading volume will go down, as people usually take precautious measures to preserve and conduct necessary accounting on their fund and investment during this period so that they can head off to another year with intention and new ideas.

- Sideway track of digital assets’ value and the narrowing Bollinger Bands have never been a good calling for new inflows of investment since a volatility-sensitive market and a market explosion (either up or down) are pending in the coming days.

 

CARDIAC ARREST

2. Binance.US Spends $1.02B to Buy Voyager’s Assets

CoinDesk - December 20, 2022 at 11:06 PM

On Dec 19, Binance.US agreed to buy the bankrupt crypto lender Voyager Digital assets for $1.022B. The bid is made for the fair market value of Voyager's cryptocurrency holdings, now valued at about $1.002 billion, plus an extra $20 million in value. VGX, the native token of Voyager Digital, was boosted by over 32% when the news came out.

Binance.US will provide a $10 million good faith deposit and will pay up to $15 million in reimbursements to Voyager for specific costs. Additionally, Voyager will ask the bankruptcy court for permission at a hearing on January 5, 2023. 

Earlier this year, FTX had outbid Wave Financial and Binance for Voyager’s assets. However, following the pulverization of FTX, Binance for the US market now took over became the next legal owner of the associated properties.

3. Sam Bankman-Fried Gets a $250 Million Bailout

CoinDesk - December 23 2022 at 12:05 AM

After Sam Bankman-Fried appeared in U.S. federal court in New York on Thursday on allegations that he was the brain behind the overlinked fraud, money laundering and unauthorized management of customer funds inside his former crypto business since day 1, a federal judge decided to grant his freedom over a $250 million personal recognizance bond - which means that no upfront payment is required except for the secured collateral of existing assets, which, in SBF’s case, is the equity in his parents' house in Palo Alto (California).

The clinched bail deal comes with an extended list of conditions that SBF must adhere to. Any violation against these conditions would result in a warrant for his arrest and an immediate request for bond payment. However, while being free, he is restricted to controllably conduct transactions totaling more than $1,000, is not permitted to create new credit accounts, is only allowed to leave the house for exercise, and is required to undergo treatment for his substance misuse and mental illness.

Before this, two of Sam’s trusted arms at the time of fund misappropriation - Caroline Ellison and Gary Wang - have also pled guilty for accused charges and agreed to corporate for further investigation.

4. Solana-Based Raydium Decentralized Exchange Suffers Exploitation

Raydium - December 18, 2022

It was recounted that a bad-faith individual took control of the Pool Owner (Admin) account to begin his exploit quest on the Raydium Liquidity Pool V4’s authority account on December 16. Around the same time, Nansen data also detailed the 7-digit value of stolen funds from the pool:

As of December 21, Raydium initiated how the remediation of funds for affected users will look like.

WEAK PULSE

5. Ankr Ex-Employee Caused $5M Exploit

CoinDesk - December 22, 2022 at 3:56 AM

Ankr claimed that one of their former employees was the one who orchestrated the $5 million exploit earlier this month. The ex-employee was found to have used a malicious code package to launch a supply chain attack, allowing a user to mint 6 quadrillion aBNBc tokens.

The attacker subsequently exchanged those newly issued tokens for Binance Coin (BNB) and sent the illicit gains to the US-Treasury-sanctioned cryptocurrency mixer Tornado Cash. In the end, they exchanged the BNB tokens for USDC - which was valued at up to $5M.

Ankr said they were working with law enforcement to discharge the exploiter.

6. One of The Largest Bitcoin Miner Core Scientific Files for Bankruptcy

Financial Times - December 22, 2022

Core Scientific (CORZ), one of the top BTC miners by computing power went bankrupt on Wednesday and came to an agreement with some of its lenders to restructure its debt. Its market worth was about $3B in April but has subsequently dropped to less than $100M, according to FactSet data.

According to the filing, Core Scientific's liabilities were believed to be between $1 billion and $10 billion. The company's operating performance and liquidity was said to have been on the brink of destruction as a result of the protracted reduction in the price of bitcoin, the decoupling rise in electricity cost, and the failure of some of its hosting clients to honor their financial commitments.

STRONG PULSE

7. Binance Closed The Deal of Tokocrypto Trading Platform Acquisition

CoinDesk - December 20, 2022 at 0:16 AM UTC

According to CoinDesk, the acquisition of Tokocrypto by Binance is now complete. As part of the acquisition, Pang Xue Kai, CEO, and co-founder of Tokyocrypto will resign from his position but continue to serve on the board. Although acquired by Binance, Tokocrypto confirmed that it will keep its branding. Moreover, it is said that because of the unstable market conditions,  Tokocrypto will have to cut down its workforce by around 58%. TKO, Tokocrypto's exchange token, has increased by 40% today as a result of the news's initial release in Indonesia.

8. Visa Suggested Using StarkNet for Automatic Payment

CoinDesk - December 20, 2022 at 9:13 PM UTC

Recently, Visa (V), a payment processor, presented an Account Abstraction system that makes use of smart contracts to enable automatic programmable payments on Ethereum. The system will be deployed on the Ethereum layer 2 network StarkNet which would enable the conduct of all recurring payments using blockchain networks.  

On the Ethereum blockchain, Account Abstraction (AA) is a proposal that tries to unify user accounts and smart contracts into a single type of account. This is made possible by enabling the development of validity guidelines for specific transactions.

One application for AA is the development of "delegable accounts," which enables payment automation through the use of smart contracts. A user can provide a pre-approved smart contract, also referred to as an "auto payment contract," access to their delegable account in order to delegate the authority to initiate payments.

As of Tuesday, Visa had not disclosed any plans to incorporate the system into the services it provides.

9. Layer 2 Labs Raises $3M to Bring Drivechains Online

CoinDesk - December 21, 2022 at 0:00 AM UTC

In order to introduce drivechains and other kinds of cutting-edge technology to Bitcoin, Layer 2 Labs has raised a $3 million seed round from angel investors. Drivechains is a secondary blockchain that interchanges with the main blockchain and seeks to improve user experience (UX). Drivechains is a concept that Sztorc introduced in BIPs 300 and 301 for Bitcoin.

The system, on which Layer 2 Labs will primarily concentrate its efforts, enables users to transfer bitcoin (BTC) back and forth between the principal Bitcoin blockchain and several drivechains. Drivechains' goal is to provide Bitcoin users with access to novel services and goods that are now available only on altcoin networks.

10. Brazil President Approves Crypto Regulations

CoinDesk - December 23, 2022 at 3:01 AM UTC

A crypto regulatory measure approved by the Senate and Chamber of Deputies of Brazil was signed by President Jair Bolsonaro on Thursday. The new rule admonishes fraud crimes that involve crypto assets with a sanction of four to six years in jail plus a fine. Additionally, it establishes a "virtual service provider" license that firms dealing in digital assets, such as exchanges and trading intermediates, must apply for. Every digital asset that is in the category of securities will be overseen by the Brazilian Securities and Exchange Commission (CVM).

Those who don't fit that description (to be determined) will be under the control of another yet-to-be-formed entity. After the approval on Thursday, businesses will have 180 days to adjust to the new regulations.

11. Do you Know Twitter has Added Token Price Index in their Search Function?

Coin Telegraph - December 22, 2022

Try it yourself, but do not disappoint when we tell you that despite the many variations they managed to create for Bitcoin and Ethereum, the two most market-dominant tokens are the only search results you can find as price indexes, not even Musk’s favourite coin - DOGE.

 

Paying closer attention to the bottom left corner enables you to notice that the price index might have come from Robinhood’s real-time database. This could signal a prior partnership between the two tech firms although no official announcement was made before the functionality was published.