Cryptoverse Inches towards $1 Trillion, SBF Arrested

Bitcoin Higher Week-over-Week despite Rate Hike Pullback

After trading within a relatively narrow range for several weeks, Bitcoin prices (BTC-USD) have broken out higher, briefly topping $18,400 per coin after the latest inflation data. However, a rate hike decision by the U.S. Federal Reserve on Wednesday sparked a pullback from highs. Week-over-week, Bitcoin managed to climb 3.5%, mirroring the upturn in U.S. equities as the end of the year approaches. 

The latest rally has been fueled in part by growing speculation that the bottom is in for Bitcoin prices, with analysts increasingly anticipating a rally in 2023 as the market recovery continues to gain momentum. Shifting market sentiment echoes this view, with the Bitcoin Fear and Greed index trending in the least fearful range in over a month. The gains haven’t been felt in Grayscale’s Bitcoin Trust (OTC:GBTC) equity product, which is still trading at a substantial discount to Bitcoin spot prices. 

Even amid the modest upturn in prices, short-term Bitcoin volatility and trading volumes remain subdued, drifting near the lowest levels since October 2020. Part of this can be attributed to traders unwinding leveraged positions, with nearly $3 billion in Bitcoin futures liquidated over the last 2-months as speculators exited the market. 

Toncoin Telegram Feature Pushes Outperformance

Among the best performers over the last week was Toncoin (TON). Originally the brainchild of Telegram, the messaging platform has since distanced itself from the development of The Open Network (TON) earlier in the year after SEC pressure forced it to repay $1.2 billion raised during an ICO. Now, TON is up over 50% since the beginning of December, rallying 28.9% week-over-week after announcing a new feature for Telegram users. 

A fresh integration means TON users can use tokens to purchase virtual phone numbers with the +888 prefix, offering greater user anonymity. Although these virtual phone numbers cannot be used to interact or register for third-party services, users with these NFT-like anonymous virtual numbers in their Toncoin wallets can resell these digital assets on secondary markets.

Not far behind Toncoin’s results were XDC Network (XDC) and Bitcoin SV (BSV). Although there was no major news catalyst behind the gains, XDC and BSV were among the best-performing assets in the top 100 cryptocurrencies by market capitalization, climbing 18.7% and 13.6%, respectively.

Waves Neutrino Stablecoin De-Pegs as DOGE Declines

As questions surrounding the value of stablecoins continue to mount following the meltdown of TerraUSD (UST) earlier this year and the resulting collapse in LUNA, another algorithmic stablecoin has de-pegged. Neutrino USD (USDN), an algorithmic stablecoin pegged to the U.S. dollar and backed by WAVES as collateral, is down more than 26.5% week-over-week after losing its 1:1 peg with USD. 

The reason behind the sharp decline in Neutrino USD on the Waves network (native token WAVES) follows a warning issued by the Korean Digital Asset Exchange Association about the adequacy of the peg, especially if there is high volatility in WAVES. The resulting fear has driven USDN to approximately $0.64, well below the intended $1 peg.

Another major underperformer over the last seven sessions was Dogecoin (DOGE). After more than doubling from multi-month lows beneath $0.0600 per coin, the memecoin favored by Twitter’s Elon Musk is back on the retreat, sliding more than 10% despite an uptick in large transactions amounting to over $1 million.

SBF Behind Bars as Binance Warns of Turbulence Ahead

As the FTX saga continues to play out in the media, former CEO Sam Bankman-Fried is now sitting in a Bahamanian prison after being arrested. He faces charges from multiple authorities across different global jurisdictions. The Bahamas arrested SBF on Monday on behalf of the United States after multiple agencies and regulators charged him for his role in the collapse of FTX and numerous other charges relating to campaign finance violations.

He will likely remain in prison in the Bahamas without bail before extradition to the United States to face a host of charges, including conspiracy, wire fraud, and misuse of customer funds.

Finally, Binance CEO CZ warned employees at the world’s largest exchange by trading volume that the months ahead in the crypto ecosystem would be difficult and volatile. In a memo to staff, CZ highlighted the high pace of withdrawals from the exchange platform and addressed concerns about pausing stablecoin withdrawals.

In addition to his comments, CZ also highlighted the growing scrutiny of its recent reserve audit by Mazars Group. Despite the platform’s efforts to be transparent about reserves, questions continue to swirl about the audit and the exchange’s actual cryptocurrency holdings.

Disclosure