Risk Off In A Time Off Strong USD

Nodepay raised $7M in Undisclosed Funding with support by IDG Capital. Nodepay is a decentralized network that rewards users for contributing their internet resources to AI.

GT-Protocol secured an undisclosed amount in Strategic Funding with help by ChainGPT Labs. GT Protocol is an innovative DeFi platform that combines decentralized social trading and DeFi investment pools management.

ChainOpera AI obtained $17M in Seed Funding with assistance by Finality Capital Partners. ChainOpera AI is a Layer 1 blockchain and protocol for AI apps and agents.

Swan Chain acquired $2M in Undisclosed Funding with support by DWF Labs. SwanChain is an AI blockchain infrastructure utilizing OP Stack and their Ethereum Layer 2.

Trrue raised $10M in a Private Token Sale with help by Gem Digital. Trrue provides a verified credential network and Layer 1 trust infrastructure for financial services.

Melos Studio obtained an undisclosed amount in Series B Funding with assistance by LBank. Founded in 2020 in Taiwan, Melos is a decentralized Web3 collaboration platform for musicians and music creators.

The Grid secured $624K in Angel Funding without any notable investors. The Grid provides standardised metadata about blockchain and Web3 projects.

easeflow raised an undisclosed amount in Strategic Funding with help by Impossible Finance. Easeflow is a platform that focuses on simplifying the deployment and management of blockchain nodes through a one-click solution.

Usual acquired obtained $10M in Series A Funding with support by Binance Labs. Usual is focused on issuing secure and decentralized fiat stablecoins, redistributing ownership and governance through the $USUAL token.

RuneMine secured $2M in Undisclosed Funding without any notable investors. RuneMine focuses on establishing the groundwork to facilitate value exchange within the Bitcoin network.

Galaxy Digital has boldly claimed that the United States government will not purchase more Bitcoin (BTC) in 2025 but will focus on safeguarding its current holdings, which total about 183,850 BTC valued at around $17.24 billion.

Everyone Wants A Piece

It is worth mentioning that discussions about using Bitcoin as a reserve asset will continue, but the government seems focused on its existing stockpile. Federal agencies will also likely assess the impact of a Bitcoin reserve policy, aligned with Senator Cynthia Lummis and her Bitcoin Act of 2024. If passed, the bill would allow the U.S. government to accumulate 200,000 BTC annually for five years, ultimately creating a reserve of 1 million Bitcoin.

Galaxy Digital analysts suggest that a U.S. shift toward Bitcoin could spark competition by other nations, especially those with large sovereign wealth funds or those opposed to the United States, such as Russia. Bitcoin adoption might also extend to corporations, with Nasdaq 100 companies potentially adding Bitcoin to their balance sheets.

Varied Global Reactions

Japanese Prime Minister Shigeru Ishiba is uncertain about what other countries may do regarding Bitcoin, while former Binance CEO Changpeng Zhao predicted smaller nations will lead in adopting Bitcoin reserves. He also suggested China might play a key role in this shift.

Despite potential hesitation by the U.S. government to acquire more Bitcoin, MicroStrategy continues its aggressive BTC acquisition. At the same time, pro-crypto policies are becoming more urgent with a two-year legislative window during the incoming Trump administration.

The DeFi Education Fund, the Blockchain Association, and the Texas Blockchain Council are contesting the Internal Revenue Service (IRS) and their decision to classify DeFi platforms as brokers, arguing that it exceeds the authority of the agency, violates the Administrative Procedure Act (APA), and infringes on constitutional rights.

Lawsuit Against the IRS

Filed on December 27th, 2024, the lawsuit challenges the aforementioned broker rule, which expands the definition to include decentralized exchanges (DEXs) and other platforms facilitating digital asset transactions.

The rule requires DeFi platforms to report detailed transaction information, such as gross proceeds, transaction dates, and user identities (names, addresses, TINs) via Form 1099-DA, starting in 2027, to improve transparency and reduce tax evasion.

The crypto community argues that the IRS has overstepped its bounds, as DeFi platforms do not execute transactions like traditional brokers. They also claim the rules would burden software developers, who lack access to the required user data, potentially further stifling innovation.

Broader Impact On DeFi

The lawsuit also claims violations of the APA and the Constitution, highlighting that public concerns raised during the comment period were ignored. More importantly, the lawsuit comes amid increased scrutiny of the crypto industry, with potential far-reaching effects on DeFi and the broader digital asset ecosystem.

Between December 23rd and December 27th, Bitcoin (BTC) spot ETFs experienced significant outflows totaling $388 million. However, FacebookTC (by Fidelity) stood out with an impressive weekly inflow of $183 million.

Time To Reassess

These fluctuations in inflows and outflows reflect the changing sentiment of investors during the Christmas to New Year period, highlighting the uneven performance of Bitcoin ETFs. Currently, the total net asset value of Bitcoin spot ETFs stands at $106.683 billion.

The recent withdrawals suggest that investors may be reassessing their positions amid market volatility, marking a shift compared to the inflows observed in previous weeks. Despite this trend, some ETFs like FBTC demonstrated resilience, continuing to attract capital during this period.

Ethereum ETFs Outperform Bitcoin ETFs
While Bitcoin ETFs experienced withdrawals, Ethereum spot ETFs saw positive movement, attracting a net inflow of $349 million last week. Leading this growth, ETHA (by BlackRock) garnered a weekly inflow of $182 million, followed closely by FESH (by Fidelity), which drew $160 million in inflows.

These gains indicate growing investor interest in Ethereum-based assets. In fact, Ethereum spot ETFs have now experienced multiple consecutive weeks of positive net flows, remaining robust. Even as Bitcoin ETFs contend with outflows, Ethereum continues to strengthen its appeal, attracting both institutional and retail investors alike.

As Tether (USDT) takes a step back, many financial institutions like Standard Chartered and Revolut are positioning themselves to take advantage of the growing demand for blockchain-powered financial services, particularly stablecoins.

Banks Go All In

EURt, introduced by Tether in 2016, initially struggled to gain momentum and was eventually discontinued to comply with new MiCA regulations in Europe. This regulatory clarity has opened the door for banks to create their own euro-backed stablecoins, with Société Générale-Forge leading the way and others preparing to launch similar products.

On a global scale, Visa is facilitating stablecoin issuance, while Standard Chartered and JPMorgan Chase are investigating blockchain-based alternatives. However, challenges remain in the form of liquidity risks, regulatory uncertainties, and competition by Central Bank Digital Currencies (CBDCs). 

Changing Times

Despite the aforementioned obstacles, the profitability of stablecoins continues to attract banks keen on advancing within the digital finance sector. As more banks enter the stablecoin arena, competition may significantly impact the way digital currencies are integrated into traditional finance going forward.

With new players entering the market and forging partnerships, the stablecoin sector is set to grow, providing consumers with a combination of the reliability of conventional banking and the speed and efficiency of blockchain technology.

As 2024 comes to a close, many experts believe the performance for Bitcoin (BTC) has been a little disappointing, with the asset falling to below $94,000 yesterday, down by $14,000 since peaking last Tuesday.

Altcoins have experienced significant losses as well, with sharp declines for tokens like AVAX, LINK, SUI, and others. Still, many are currently in the green as of this writing. The total cryptocurrency market capitalization also dropped by $150 billion in just two days.

BTC Faces Continued Struggles
The downturn began last week as Bitcoin fell to $92,000 in a matter of days despite reaching a new ATH of over $108K earlier this month. While it managed to somewhat recover last weekend, even briefly reaching $99,000, the rally was short-lived, and the price quickly dropped again on Monday. After another dip to around $92,000, Bitcoin saw a brief resurgence, reaching a multi-day high of just under $100,000. However, this rally was also quickly halted, and the price started to decline once again.

Yesterday, after failing to hold at $97,000, Bitcoin slid to below $94,000. Though it has since recovered slightly and is now trading above that level, it is still down by more than 2% on the day. Bitcoin also saw its market capitalization fall to $1.87 trillion, with its dominance over altcoins dropping to 54.4%.
 

Altcoins Face Significant Losses
Ethereum (ETH) leads the market with a current price of $3,396, seeing a modest increase of 0.2% over the past 24 hours and maintaining strong performance in the last 7 days. Tether (USDT) and Dogecoin (DOGE) follow closely, with USDT at $0.9983 and a market cap of $138.76 billion, and Dogecoin at $0.3275 with a 4.8% gain in the last week. Solana (SOL) and Binance Coin (BNB) are also notable, trading at $195.13 and $714.92, respectively, with Solana seeing a solid 6.0% rise in the past week.

Other key players include XRP, which is priced at $2.19, and Cardano (ADA) at $0.8896, both showing slight gains. The market also highlights the stablecoins USDC and USDE, priced at $1.00 and $0.9972, and the dynamic rise of tokens like Bitget Token (BGB), which has surged 86.5% in the past 7 days. The diverse crypto landscape also includes newer assets such as Hyperliquid (HYPE) and Aptos (APT), both showing impressive short-term growth.

Other Markets

China has taken steps to stimulate its economy by encouraging banks to lend more and cutting key interest rates, as Shanghai remains a focal point of these efforts. Meanwhile, hedge funds are continuing their bullish stance on the banking sector, while momentum trading reaches new heights despite emerging vulnerabilities. In Singapore, former oil mogul Lim Oon Kuin faces sentencing after his empire collapsed, leading to his bankruptcy declaration.

Elsewhere, the Argentinian economy is slipping into recession, spurred by President Milei and his austerity measures, with the country spending $803 million this week to meet the demand for dollars by importers. On the commodities front, oil prices are set to record their largest weekly gain since early 2023, driven by growing risks surrounding Middle East crude flows.

In Canada, stocks have dropped following a global market selloff, but strategists remain optimistic, predicting the TSX will reach 28,000 next year as interest rates fall. Meanwhile, companies in the U.S. and Europe are scrambling to place orders early and consider price hikes, as tariff threats by Trump disrupt global supply chains and Chinese factories search for new buyers.

The meme coin market experienced significant volatility in December, with their market capitalization surging to $137 billion before plummeting to $92 billion, resulting in a loss of over $40 billion.

A Notable Decline

The overall market cap for meme coins dropped by 30%, signaling a slowdown in demand for meme-based tokens. CoinMarketCap data shows that on December 1st, the total market cap was $120.14 billion, peaking at $137.06 billion on December 9th, then falling by 32.38% to $92.67 billion by December 23rd.

By the end of the month, the market cap stood at $98.72 billion, an 18% decline. A key driver of the meme coin surge was the listing of PEPE on exchanges like Binance.US and Coinbase, which helped propel its price and market cap. On December 7th, following its Binance.US listing, Pepe surpassed UNI in market cap, with its value soaring to over $11 billion.

Staggering ROI

Throughout the year, savvy traders profited significantly, such as one who invested $3,000 in Pepe in April and saw it grow to $46 million by May. In December, another trader, after holding $27 worth of Pepe for over 600 days, transferred $52 million worth of tokens, yielding a whopping 1,900,000x return on investment, according to Lookonchain analytics.

The cryptocurrency market experienced substantial growth in 2024, spurred by several key events such as the launch of Bitcoin ETFs, the halving, and Donald Trump once again becoming U.S. President. Naturally, some cryptocurrencies vastly outperformed others this year.

Meme Coins Dominated 2024

While Bitcoin posted an impressive 121% gain between January 1st to December 24th, the altcoin market outperformed it by a wide margin, with some altcoins posting gains as high as 1.84 million percent.

Leading the pack was Fartcoin, a meme coin launched in mid-October, which skyrocketed by an extraordinary 1,847,357% after Trump won the presidential election. Other major gainers included Mantra (8,776%), Virtuals Protocol (6,068%), and Ondo (1,758%), which capitalized on the growing demand for cryptocurrencies with real-world use cases such as RWA tokenization and the integration of AI into decentralized applications.

Altcoins Soar As BTC Makes Headlines

Aerodome, a decentralized exchange protocol on Coinbase, surged by 1,672%, and meme-driven tokens like Pepe gained 1,249%. The overall success of these altcoins reflected the rising interest in utility-focused and meme-based projects, as the market embraced cryptocurrencies that offered tangible applications or had a strong cultural following.

In any case, this year saw a clear trend of utility and novelty driving the altcoin boom, demonstrating the evolving nature of the crypto market. Still, Bitcoin continues to make headlines, as not only is it widely seen as a viable long-term investment by various institutions like Metaplanet, MicroStrategy, and KULR Technology, but both the U.S. and Russia have also started implementing their own Bitcoin reserve strategies.

Approximately $1.7 billion in crypto was lost due to the theft of private keys in 2024. In its annual Web3 Security Report, Hacken, a reputable cybersecurity firm, emphasized that private key theft continues to be the most critical threat for crypto investors worldwide.

Private Keys Continue To Be Targeted

According to Hacken, smart contract exploits are significantly less frequent compared to the theft of private keys. In 2024, access control vulnerabilities, which are closely related to private key compromises, accounted for most crypto hacking-related losses. This represents nearly $1.7 billion lost this year.

By comparison, smart contract vulnerabilities contributed just 14% of total losses in 2024, highlighting the dominant risk posed by unauthorized access and private key theft. Private keys are alphanumeric strings generated by crypto wallets, used to authorize transactions and verify ownership. They play a crucial role in encrypting data and safeguarding assets against theft.

Main Reasons For Theft

Hacken also outlined four key reasons why private keys are often stolen, namely the use of insecure management platforms, falling victim to social engineering attacks, improper data backups, and weaknesses in single-signature crypto wallet schemes.

According to the firm, the largest exploit of 2024 involved the hack of the centralized Indian crypto exchange WazirX, where over $230 million worth of digital assets were stolen. Despite having a robust multi-party security system in place, the exchange experienced a breach due to unauthorized fund transfers through its wallets.

KULR Technology Group, Inc. has acquired 217.18 BTC at an average price of $96,556.53. This purchase marks the beginning of a broader plan to allocate up to 90% of excess cash into crypto, following the lead of industry giants like MicroStrategy. After revealing the Bitcoin strategy, KULR saw its stock surge by nearly 40% in value.

A Novel Strategy

As announced on Thursday, KULR acquired the aforementioned Bitcoin at an average price of $96,556.53 per coin. This marks just the first step in a series of purchases, with the company planning to invest up to 90% of its surplus cash into BTC. To manage its crypto assets, KULR has partnered with Coinbase Prime for custody solutions and self-custodial wallet services.

CEO Michael Mo shared that the decision to purchase Bitcoin was heavily inspired by MicroStrategy and its Executive Chairman and Co-Founder, Michael Saylor. To gauge shareholder support for this move, KULR conducted a survey, which showed strong approval for the initiative, with Mo revealing that they received an overwhelmingly positive response in favor of buying BTC.

A Growing List

KULR joins a growing list of companies incorporating Bitcoin into their treasury reserves. Just days earlier, Matador Technologies, based in Canada, announced it would add $4.5 million in Bitcoin to its balance sheet as part of a long-term capital preservation strategy. On December 20th, Quantum BioPharma, a biopharmaceutical firm, revealed it had invested $1 million in Bitcoin and other cryptocurrencies. Meanwhile, Metaplanet in Japan recently made its largest Bitcoin purchase to date, acquiring nearly 620 BTC.

The trend of corporate Bitcoin adoption gained momentum in 2020 when MicroStrategy made its first significant investment. Today, the company holds over 444,000 BTC and plans to expand its holdings by an additional $42 billion, subject to shareholder approval.

Rune transactions on the Bitcoin network have dropped to new lows, losing their dominant position compared to earlier this year, and the Bitcoin Rune protocol is seeing minimal daily fees, raising concerns in the market. Speculation is growing that increased interest in meme coins and AI agents is behind this decline in Bitcoin Rune activity.

Decline In Bitcoin Rune Transactions

Recent data shows a significant drop in Rune activity since its April launch. As of December 25th, Rune transactions now account for just 1.67% of daily Bitcoin transactions, compared to over half earlier in the year. This suggests that the initial excitement around Rune is fading, with a corresponding decline in transaction fees, which have remained under $250,000.

Impact Of Meme Coins And AI

Runes introduced a technological leap by supporting multiple token standards on the Bitcoin blockchain. However, the recent decline in activity points to a shift in investor focus, with meme coins like Dogecoin (DOGE) and FLOKI, as well as AI agents, capturing more attention. These sectors may be contributing to reduced interest in Bitcoin Runes.

Bitcoin Price, ETFs, And Future Outlook

Despite the drop in Rune transactions, Bitcoin recently reached an all-time high of $108,202 before falling to $96,102. As Bitcoin stabilizes, attention may return to projects like Runes. Meanwhile, Bitcoin ETFs have seen significant outflows, with $338.4 million withdrawn on December 25th alone. Despite market volatility, analysts expect a potential rebound for Bitcoin.

The $PENGU airdrop was one of the most highly anticipated crypto events of 2024.

Strong Engagement

After the airdrop, the $PENGU token dropped by 50%. Crypto analyst Ignas DeFi shared an update on X, revealing that 91% of the airdrop had already been claimed. Key stats included 91% claimed (1.1M addresses), 74% sold or moved tokens to another wallet (like a CEX), 16% holding, with 3.5% buying more, and 70% of the supply circulating.

Of the 23.1 billion $PENGU tokens allocated for the airdrop, 21 billion have been claimed, with only 2.1 billion left to be distributed. A large portion of recipients sold or transferred their tokens, a typical trend with airdrops. However, 16% of claimants are holding their $PENGU, with 3.5% even buying more.

Token Surge

The $PENGU token surged over 600% in just one month, partly due to its listings on Bithumb, Crypto.com, and Hyperliquid. The token is  also already listed on major exchanges like Binance, OKX, and Bybit.

With a market cap above $2 billion, analysts believe $PENGU could reach $10 billion in the current bull market. Despite heavy sell-offs, the $PENGU airdrop signals strong bullish sentiment. With 91% claimed and 16% held, $PENGU looks poised to be more than just a temporary airdrop.