SEC ‘backed into a corner,’ IRS tracks crypto trades, and Mickey Mouse NFTs: Hodler’s Digest, Dec 31 – Jan 6

Top Stories This Week

SEC has been ‘backed into a corner’ on BTC ETF approval — Bloomberg analyst

The United States Securities and Exchange Commission “has been backed into a corner” in approving a spot Bitcoin exchange-traded fund (ETF), according to Bloomberg analyst James Seyffart. The analyst said the investment vehicle has a 90% chance of receiving the green light between Jan. 8 and 10. A go-ahead in the coming days could bring $10 billion in inflows to Bitcoin ETFs in the first year. However, widespread adoption could take weeks or even months, as institutional investors will likely carry out due diligence before adding the cryptocurrency to their portfolios, noted Seyffart.

IRS rules require reporting data from $10k crypto transactions in 2024

Crypto brokers are now required to report personal information on digital assets transactions worth more than $10,000 to the Internal Revenue Service (IRS). The requirement is part of the infrastructure bill signed into law in 2021 by President Joe Biden, and seeks to reduce the size of the tax gap in the United States. Upon completion of a transaction, brokers must provide the tax agency with the sender’s name, address and social security number within 15 days. Following the bill’s passage, many lawmakers suggested additional legislation to “fix” the reporting requirement, claiming that the information required from brokers would be difficult or impossible to collect.

Early Mickey Mouse version becomes top NFT on OpenSea after copyright expires

Walt Disney Company’s original incarnation of the Mickey Mouse mascot recently entered the public domain and quickly became the top trending nonfungible token (NFT) on OpenSea. Three NFT collections featuring the classic mascot dominated OpenSea’s trending list on Jan. 2, with the “Steamboat Willie Public Domain 2024” collection reaching the top spot, achieving around $1.2 million in trading volume. Disney clarified that while this early version of Mickey, known from Walt Disney’s 1928 animated short film, “Steamboat Willie,” is now public domain, the copyrights of modern iterations remain intact.

Bitcoin Birthday: 15 years after Satoshi Nakamoto mined genesis block

The genesis block, also known as the first Bitcoin block, was mined on Jan. 3, 2009, by its mysterious creator Satoshi Nakamoto. What followed was years of triumph versus naysayers that included critics, mainstream media, politicians and governments worldwide. As of January 2024, the cryptocurrency is the 9th most valuable asset in the world based on market cap alone. On the occasion of Bitcoin’s 15th birthday, we take a bird’s eye view of the Bitcoin ecosystem.

SEC asks court to consider Terraform Labs ruling in Binance case

The U.S. Securities and Exchange Commission has filed a motion in federal court asking a judge to consider a recent ruling over Terraform Labs’ case in its lawsuit against crypto exchange Binance. The SEC said its case against Terraform Labs and its co-founder, Do Kwon, had a “number of issues” similar to its enforcement action against Binance, Binance.US and former CEO Changpeng Zhao. The SEC argued the Terraform Labs judgment provided “further grounds,” asking the judge to consider denying a motion to dismiss from Binance. The crypto exchange and Zhao filed a motion to dismiss in September claiming the SEC had overreached on its authority and imposed its standards on securities “retroactively.”

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $43,756, Ether (ETH) at $2,241 and XRP at $0.57. The total market cap is at $1.66 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Internet Computer (ICP) at 40.50%, Arbitrum (ARB) at 30.17% and Celestia (TIA) at 25.56%. 

The top three altcoin losers of the week are Bonk (BONK) at -26.94%, MultiversX (EGLD) at -21.99% and Uniswap (UNI) at -17.41%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“ETFs don’t really compete with Bitcoin […]; however, they are useful as a bridge solution as legacy finance adapts to the new Bitcoin reality.”

Samson Mow, CEO of Jan3

“The prevailing one-sided market consensus anticipates SEC approval of Bitcoin Spot ETFs by next week. We, however, see an opportunity to trade against consensus.”

Markus Thielen, crypto analyst at Matrixport

“Approval is going to pave the way for pension funds and RIA-based funds to be able to invest in assets in a spot Bitcoin ETF.”

John Palmer, president of Cboe Digital

“I think it is important to make sure the lessons are learned and hammer home that these are failures of individuals and centralized companies, not of crypto or blockchain technology.”

Guy Turner, host of the Coin Bureau

“The SEC is backed into a corner here. I think they have to approve [a spot Bitcoin ETF].”

James Seyffart, analyst at Bloomberg

“Phishing on the Solana network isn’t new but with the resurgence of Solana’s price, cybercriminals are beginning to focus on targeting individuals in the ecosystem.”

Joe Green, analyst at CertiK

Prediction of the week

BTC price centers on $43K as nervous Bitcoin traders await ETF news

Bitcoin remains stuck amid uncertainty over a spot ETF approval in the United States, but BTC price holds higher versus earlier in the week. Data from Cointelegraph Markets Pro and TradingView showed BTC price acting in an area above $43,000 on Jan. 5.

Commentators had expected volatility on the day as rumors swirled over a potential approval of the first spot Bitcoin ETF of Wall Street. Markets likewise refused to price in an imminent decision, with Bitcoin staying broadly rangebound after recovering from a liquidity cascade earlier in the week.

As Cointelegraph reported, versions of how the price could react to the decision vary considerably, with both upside and downside forecasts on the table.

“For now, the topside remains capped by resistance at the 46 – 48.5k region with support at the 40.5 – 42k region,” trading firm QCP Capital wrote in its latest market update sent to Telegram channel subscribers on Jan. 5. “In spite of the leveraged washout, BTC has climbed back up to 44,000 level. While we remain wary of a ‘sell the news’ knee-jerk reaction to the downside, this resilient price action gives us more confidence in the medium-term bullish view into BTC halving towards Mar/Apr this year.”

FUD of the Week

dYdX identifies attacker, considers legal action over $9M loss

Decentralized exchange dYdX says it has uncovered the identity of the attacker responsible for its v3 platform attack on Nov. 17, which resulted in a loss of $9 million from its insurance fund. In a post-mortem on the “targeted attack” on the exchange, dYdX confirmed that it is now looking into legal action against the person responsible. DYdX triggered its insurance fund to cover users’ trading losses on Nov. 17 after a “profitable trade” targeting long positions on the YFI token caused the liquidation of positions worth nearly $38 million.

China state daily calls crypto ‘corruption channel’, urges crackdown

A call to crackdown on bribery using cryptocurrency and other forms of electronic payment has appeared on China’s Legal Daily website. The Jan. 1 issue of Legal Daily, which is published by the Chinese Communist Party Central Commission for Political and Legal Affairs, quoted Hebei University Law School associate professor Zhao Xuejun as saying virtual currency and electronic gift cards have become “hidden channels” for bribery as cards and digital currencies in “cold storage” devices that can be carried abroad for redemption.

Crypto VC Polychain Capital confirms founder’s X account hacked

Crypto venture capital firm Polychain Capital has confirmed the X (formerly Twitter) account of its founder and CEO, Olaf Carlson-Wee, has been compromised, with the hacker posting phishing links disguised as a website to claim an airdrop. Polychain urged X users to avoid interacting with Carlson-Wee’s handle until further notice. The hacker promoted a fake “$PCHAIN” token airdrop, encouraging Carlson-Wee’s followers to click a link to participate. According to a recent report by security platform Scam Sniffer, cryptocurrency phishing scams exploited 324,000 victims for nearly $300 million in 2023.

Top Magazine Pieces of the Week

Which gaming guild positioned itself best for the bull market?

Blockchain gaming guilds amassed treasuries worth billions last cycle. But how did they pivot to set themselves up for the 2024 bull run?

Cory Klippsten’s warning for ‘shitcoin traders’ in the bull market: X Hall of Flame

Bitcoin maxi Cory Klippsten, founder of Swan Bitcoin, advises caution to crypto traders, urging them to avoid the altcoin season hype.

Fake news crypto panic, Binance gains users as market share falls? Asia Express

Singaporean investment firm Matrixport blamed for Bitcoin price correction, Asian exchanges performance in 2023, and more!