This week in crypto, the market is buzzing with pivotal developments that promise to shape the future of digital assets. From the new spot Bitcoin ETFs, critical legal battles to groundbreaking token launches and strategic platform upgrades, the events unfolding are set to have a profound impact on market dynamics and investor strategies.
#1 New Spot Bitcoin ETF Data This week, the crypto market’s main focus will remain the new spot Bitcoin ETFs. Following a record-breaking start, Bitcoin’s price experienced a significant drop. Despite that, the ETFs witnessed inflows of over $1.4 billion in the first two days, overshadowing Grayscale Bitcoin Trust’s (GBTC) outflows of $579 million, resulting in a net inflow of $818.9 million.
However, Grayscale remains in the spotlight as investors shift from GBTC, with its 1.5% annual fee, to other ETFs charging less than 0.3%. This trend is believed to have contributed to last week’s Bitcoin price decline. Importantly, due to the SEC’s “cash-redemptions” rule, there’s a time delay in moving between ETFs, which is crucial for market dynamics. Watching the Grayscale GBTC outflows will be pivotal.
Moreover, ETF issuers are currently believed to be buying Bitcoin over-the-counter (OTC) to minimize market impact. However, as OTC sources become exhausted, market orders will become necessary for BlackRock and others, potentially leading to significant price movements in Bitcoin.
#2 Coinbase Vs. SEC Hearing The SEC vs. Coinbase hearing, set for January 17 (Wednesday), focuses on Coinbase’s Motion for Judgment on the Pleadings. James “MetaLawMan” Murphy from Ludlow Street Advisors LLC outlined the four potential outcomes:
Judge Denies The Coinbase Motion: This would allow the SEC to proceed with the case, provided they show that their allegations are plausible. The case would then move to a discovery phase, akin to the Ripple case, involving a detailed examination of evidence and extending the legal process for over a year. Judge Grants Coinbase’s Motion “With Prejudice”: This outcome would dismiss the entire case at the District Court level, leaving the SEC with the option to appeal at the Second Circuit Court of Appeals. Judge Grants Motion “Without Prejudice”: The SEC would be allowed to amend their complaint to address any deficiencies pointed out by the judge. However, if the court rules that the SEC lacks congressional authority to regulate crypto exchanges, amending the complaint might be pointless. Split Decision On Motion: The judge could grant the motion regarding the claims related to the 13 crypto tokens but deny it concerning the staking service. The case would then focus solely on the staking service and whether it constitutes an investment contract. Murphy anticipates that while a decision might not be immediately issued at the hearing, hints could emerge through the judge’s questioning. He expects a ruling within three months, given the case’s high stakes.
#3 Will The Crypto Shift To Ethereum Continue? While Bitcoin struggled post-ETF, Ethereum (ETH) saw a 13.8% rise over the last week, with significant gains against Bitcoin and reaching its highest USD value since mid-2022. However, concerns arise as the Ethereum market faces $1.35 billion in fresh open interest, which could lead to market instability.
Analysts like Maartunn from CryptoQuant stated, “There is still a looming sword of Damocles over the Ethereum market in the form of $1.35 billion in fresh open interest.
Daan Crypto Trades, a renowned analyst on X, remarked with regards to the ETH/BTC pair:
ETH Important area below at ~0.058 with the Daily 200MA/EMA and horizontal. Would be a bullish level to hold in case of a retest. Falling back below and failing to retake it wouldn’t be the best look.
ETH/BTC 1-day chart | Source: X @DaanCrypto #4 Solana: Jupiter Token Launch Approaches The Jupiter token launch on the Solana blockchain is approaching and is expected to significantly impact the ecosystem. Jupiter, known for its decentralized trading aggregator capabilities on Solana, has planned a strategic airdrop of its JUP token, setting aside a substantial 40% of the total supply for this purpose. The launch is scheduled for the end of January.
The eligibility criteria for the initial airdrop include users who have interacted with the Jupiter platform before November 2, 2023. This airdrop is considered one of the largest in the Solana ecosystem and is anticipated to drive considerable attention and activity towards both Jupiter and Solana.
Jupiter’s role as a trading aggregator is pivotal in the Solana ecosystem, facilitating optimized trade execution across various decentralized exchanges (DEXes) on the network. The introduction of the JUP token is expected to enhance Jupiter’s functionalities, potentially increasing user engagement and liquidity on the platform.
The Solana community and wider crypto market are closely watching the JUP token launch. It’s anticipated to boost the activity within the Solana ecosystem and potentially influence Solana’s valuation and perception. Thus, the Solana hype could return this week. Anticipation is high, with JUP tipped to be a standout crypto in 2024.
#5 MultiversX Upgrade And Major Announcement MultiversX is gearing up for a major announcement set for January 31, following the Sirius upgrade scheduled for January 16. The Sirius proposal, which received 98% approval, will bring the v1.6 mainnet upgrade to MultiversX. This upgrade introduces new features like DNS v2 and VM 1.5 and is expected to drastically reduce infrastructure costs for validators and node operators, with potential savings of up to 92%.
The introduction of the multikey feature is another notable part of this upgrade, signifying a major step forward for the MultiversX platform.
At press time, BTC traded at $42,782.
BTC price has lost the uptrend channel, 1-day chart | Source: BTCUSD on TradingView.com Featured image from Shutterstock, chart from TradingView.com