BitGo: Crypto Water Cooler — Dec 11
GM. It’s Wednesday, December 11.
Newsmakers
Bitcoin’s Triumphal Runup to $100,000
Fourteen years ago, a Florida man bought two pizzas for 10,000 Bitcoin in the first transaction using a new technology called blockchain. At the time, Bitcoin was known to few people outside of cryptography enthusiasts. Last week, it crossed $100K for the first time, now a major global asset with a market value of $1.91T at time of writing.
Outside of true Bitcoin believers, this spectacular rise was hardly a foregone conclusion.
Bitcoin started 2024 at a price of about $45,000. The January introduction of spot Bitcoin ETFs on major U.S. exchanges was the year’s first major catalyst. The initial fervor helped to push Bitcoin above $73,000 by mid-March. Then, momentum fizzled. Bitcoin stayed stuck in a narrow range for much of the spring and early summer. It fell below $54,000 in early August on concerns that the Fed waited too long to lower interest rates, and lost 8.6% for the month.
Growing excitement about the U.S. presidential election reignited the rally in the fall. With Republican candidate Donald Trump aggressively courting the industry, and surprise Democratic candidate Kamala Harris also making overtures, there was a sense that, no matter who won, better days were ahead. However, a Trump victory would all but guarantee the removal of SEC Chairman Gary Gensler. Bitcoin gained 7.3% in September and 10.8% in October to stand at about $68K on the eve of the presidential election with odds favoring Trump.
With Trump’s victory well-telegraphed, his election might have been a “sell the news” event. What was less telegraphed were the congressional races. Crypto PACs spent $119MM to promote candidates from both parties who expressed support in crypto, resulting in the election of 250+ congresspeople and sixteen senators, including Bernie Moreno who unseated crypto critic Sherrod Brown (D-OH), chairman of the Senate Banking Committee.
That trifecta, along with relentless buying by MicroStrategy, helped to extend the rally, with Bitcoin returning 37.3% for the month of November. Bulls sat ready to uncork the champagne as it surged past $99,000 on November 22. But the only fizzling sound came from Bitcoin falling to $91,000 as traders took profits and put options just below $100K were liquidated over the next several days.
The disappointment was short-lived; Bitcoin broke through $100K decisively on December 4, rocketing to a new all-time high of $103,900.47 that same day.
Read more →New York Times ($)
Trump to Tap Bush-era SEC Commissioner Paul Atkins to Head Agency
Ever since the U.S. election was decided, the crypto community has been celebrating the coming end of the Gensler era. Last week, they found new reasons to celebrate as President-elect Donald Trump announced Paul Atkins as his pick to head the SEC.
Atkins looks to be a confirmable nominee who is no stranger to a Trump administration or the agency. He served on the short-lived President’s Strategic and Policy Forum during the first Trump administration. He was appointed as SEC commissioner by George W. Bush in 2002 and served a full six-year term. Before that, he was a New York corporate attorney; served on the staff of two former SEC chairs in the 1990s; and organized the SEC’s individual investor program.
During his tenure as commissioner, he was known for having a free market bent. He called for more cost-benefit analysis of new rules and disfavored stiff penalties for fraudulent conduct, saying they did not deter crime. He also emphasized investor education and worked with law enforcement on increased efforts against online investment fraud, market manipulation, and Ponzi schemes.
He has advocated for developing digital asset best practices as the Token Alliance co-chair, a position held since 2017; he also sits on the board for the crypto advocacy group, The Digital Chamber. In a 2023 podcast, Atkins said the SEC should “try to accommodate activity that’s not criminal and then enable markets to flourish.”
Once confirmed by the Senate, Atkins could begin the “tough, slow grind” of new rulemaking or repealing old rules. Both involve a lengthy notice-and-comment process. He would also need to consider what to do with current enforcement actions and court cases.
Read more →Politico
Bull Market Boosts Popular NFT Collections
After nearly freezing to death during crypto winter, the Bitcoin bull run has breathed new life into the NFT market. To be sure, the CryptoSlam 500 NFT Index is still ~54% lower than in its glory days. But the top three “blue chip” collections that account for 73% of NFT market activity are on the rise.
Last week, Pudgy Penguins jumped more than 40% to a new all-time high of $62,000-plus. Bored Ape Yacht Club rose 69% and CryptoPunks 31%. This sector, overall, reached an $8.8B market cap in December, going up 17.3% in one week’s time.
Total sales hit $562MM in November, a 57.8% increase over October and the most since May. Sales on Ethereum rose 12% to $216MM. Bitcoin saw $186MM in sales, up a whopping 99.44% from October. Solano, Mythos Chain, Immutable, Polygon, and BNB Chain combined for $162.9MM in sales.
Blur and OpenSea saw the most activity on Ethereum. Blur had $271MM in trading volume with around 38,000 active traders. OpenSea did $161MM in volume with 188,000 active traders.
Rather than an expanding number of NFT aficionados, though, it’s a smaller number who are re-engaging. Unique buyers in November totaled 662,000 in contrast to May’s one million. Crypto newsletter MilkRoad says its a crypto version of the splurge effect with the newly rich spending on NFTs like they would with Rolex watches.
Read more →MilkRoad
News In Brief
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Business of Crypto
Regulation and Security
DeFi and Web3
Midweek Market Pulse
Total Market Cap: $3.39T – 7-day change as of Tuesday 12/10/24 12 PM EST: -1.2%
The crypto market edged down over the past seven days, falling 1.2% to $3.39T. Bitcoin (BTC, +1.2%) and Ethereum (ETH, +1.7%) eked out small gains amid a selloff that triggered a “liquidity cascade.” More than $750MM of leveraged positions across all cryptos were liquidated on Monday, highlighting the impact the derivatives market can have. Coinglass called it the “biggest long liquidation” of the current cycle. Roughly 570K traders and $1.7B were liquidated in the twenty-four-hour period.
Bitcoin reached a new all-time high of $103,900.47 on Wednesday before pulling back to a price of $96,314.65 at time of writing.
In Ethereum news, Justin Sun reportedly sold a massive tranche of ETH. On chain data showed the Tron founder transferring 29,920 ETH to the HTX exchange after ETH broke through $4,000. Also, well-known Ethereum developer Max Resnick announced he’ll leave Ethereum-focused infrastructure firm Consensys for Solana. Resnick has been critical of ETH’s layer 2-centric strategy, voicing his opinion that scaling should focus on the base layer like Solana.
The news did nothing to boost Solana (SOL, -5.6%), which suffered from reports that the SEC will reject the 19b-4 filings for at least two of the five Solana ETF applicants. Bloomberg’s Eric Balchunas predicts the firms will reapply for approval once the new SEC chairman is in place.
XRP (XRP, -17.1%) fell as traders took profits after its dramatic move up. Other altcoins cooled as well, including Cardano (ADA, -18.6%), Tron (TRX, -4.7%), Avalanche (AVAX, -14.1%), Toncoin (TON, -14.9%), and Hedera (HBAR, -21.2%).
The Last Word
Liquidation Cascade
: The phenomenon whereby a market dip triggers forced selling of leveraged positions, creating more downward pressure and liquidations / Liquidation cascades occur in all types of financial markets and typically start with some major catalyst.
About BitGo
BitGo provides the most secure and scalable solutions for the digital asset economy, offering regulated custody, borrowing and lending, and core infrastructure to investors and builders alike.
Founded in 2013 — the early days of crypto — BitGo pioneered the multi-signature wallet and later built TSS to improve upon other companies’ MPC offerings. Between multi-sig and TSS, BitGo offers the safest technology on the market and safeguards over 600 tokens across a wide variety of blockchains.
Over the years, BitGo has expanded from offering wallets into providing a full-suite solution that lets clients hold assets safely and then put them to work.
BitGo launched BitGo Trust Company in 2018, providing fully regulated, qualified cold storage to complement BitGo Inc’s original hot wallet solution. In 2020, BitGo launched BitGo Prime, which allows its clients to trade, borrow, and lend. Moreover, BitGo also provides access to DeFi, staking, NFT wallets, and beyond, and serves as the world’s sole custodian for WBTC, or wrapped Bitcoin.
Today, BitGo is the leader in digital asset security, custody, and liquidity, providing the operational backbone for more than 700 institutional clients in over 50 countries — a list that includes many regulated entities and the world’s top cryptocurrency exchanges and platforms. BitGo also processes approximately 20% of all global Bitcoin transactions by value.
For more information, please visit www.bitgo.com.
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