Daily News | The SEC Announced the Deadline for Bitcoin Spot ETFs Application; Solana's Network Activity Data Achieved A Record High; Bitcoin Halving Time is Less than 120 Days

Crypto Daily Digest: SEC announces final deadline for spot ETFs, Solana’s online activity data sets a record for the year

According to sources cited by Reuters, US SEC officials met with representatives of at least seven issuers hoping to launch Bitcoin spot ETFs in early 2024 and told at least two companies to submit final changes by the end of 2024. According to a public memorandum and two sources familiar with the matter, the SEC will decide on January 10th whether to approve or reject the joint proposal between ARK and 21 Shares. Most issuers expect the SEC to approve multiple applications simultaneously a few days before the deadline.

The utives of the two companies who met with regulatory authorities stated that due to the confidentiality of the discussions, the SEC has set December 29th as the final deadline for updating the documents. Issuers who fail to complete the deadline will not be included in the first batch of potential spot Bitcoin ETF approvals in early January.

According to former SEC official John Reed Stark’s analysis, the political legacy of SEC Chairman Gary Gensler may be the approval of Bitcoin spot ETFs.

After its SOL price increased by 100% compared to last month, Solana Network also set a record for new and active addresses on the network for the year. According to The Block’s data, although there is still one week left for the month, the Solana network has set a record for the number of new and active addresses added each month. The number of active Solana network addresses has increased by about 50% compared to November, reaching over 15.6 million, an increase from the record of 15.2 million set in January this year. As of now, the number of new addresses added in December has also set a record of 6.8 million, while the previous record was 6.6 million in May 2023.

On December 24th, according to Coinpost, the Japanese government approved the tax reform outline for the fiscal year 2024 at a cabinet meeting on the 22nd. The amendment includes the following changes, which apply to companies holding third-party issued crypto assets (virtual currencies) that will not be subject to market value tax. Through this tax reform, the scope of application of the end of year market value assessment in the Corporate Income Tax Law will change. Prior to this, third-party issued crypto assets (virtual currencies) held by legal entities were recognized as profits or losses in year-end accounting based on the difference between market value and book value. However, through this reform, the application of this market value assessment will be abolished for long-term holdings. The bill will be submitted to Congress in January next year and requires approval from the House of Representatives and Senate.

On December 23rd, well-known crypto influencer Arthur Hayes posted a lengthy article on his blog, delving into topics such as changes in Federal Reserve policy, regulated decentralized finance (Permissioned DeFi), real-world assets (RWA), and Bitcoin ETFs. Hayes believes that Bitcoin and cryptocurrency are the best ways to combat the depreciation of fiat currencies. He compares them to gold, the S&P 500 index, and the Nasdaq 100 index, pointing out that since 2020, Bitcoin has performed far better than other risky assets. When discussing policy changes at the Federal Reserve, Hayes particularly emphasized the significant impact of political factors on Federal Reserve decisions.

He pointed out that Federal Reserve Chairman Jerome Powell once emphasized the necessity of raising interest rates to cope with runaway inflation during the post pandemic period. However, based on recent statements and actions, there seems to be a significant shift in the Federal Reserve’s policy, and it is beginning to consider possible interest rate cuts in 2024. This policy shift reflects the direct impact of the current political situation in the United States on the Federal Reserve’s policies. Hayes analysis suggests that this policy change may stem from pressure from political leadership, especially in major election years. In order to gain voter support, political leaders may prefer to adopt loose monetary policies to stimulate economic growth and improve the performance of financial markets, even if this may lead to long-term inflation risks.

Hayes is critical of regulated decentralized finance (Permissioned DeFi). He believes that this financial model, which combines centralized and decentralized elements, violates the core principles of decentralization and may only be another way for traditional financial institutions (TradFi) to try to leverage retail investors. Regarding the tokenization of real-world assets (RWAs), Hayes believes that although this attempt may sound attractive, it will face many challenges in practical operation. He specifically pointed out that tokenizing assets such as real estate and bonds may be difficult to succeed due to a lack of standardization and liquidity.

Finally, Hayes holds a reserved attitude towards Bitcoin ETFs. He proposed that if ETFs are heavily held and stored by traditional financial institutions without utilizing the Bitcoin blockchain, it may pose a threat to the value and existence of Bitcoin. He emphasized that Bitcoin is different from other currency assets in history, as its value lies in its liquidity and usage, rather than just holding.

On December 24th, according to the Bitcoin lockhalf website, the current block height is less than 120 days away from the halving time of Bitcoin. The halving time is expected to be April 22nd, 2024, and the block reward will be reduced from 6.25 BTC to 3.125 BTC during the session.

On December 25th, according to Token Unlocks data, this week DYDX, YGG, IMX, OP and other tokens will experience a one-time large unlock, with a total release value of approximately $205 million. Among them:

At 12:00 (UTC) on December 26th, dYdX will unlock 575,000 DYDXs (approximately $1.73 million), accounting for 0.21% of the circulating supply; In addition, DYDX will add 35.49 million circulating tokens (approximately $106 million) this week, accounting for 13.19% of the circulating supply;

At 14:00 (UTC) on December 27th, Yield Guild Games will unlock 16.69 million YGGs (approximately $7.15 million), accounting for 5.94% of the circulating supply;

At 0:00 (UTC) on December 28th, SingularityNET will unlock 9.25 million AGIXs (approximately $3.26 million), accounting for 0.74% of the circulating supply;

At 0:00 (UTC) on December 29th, Immotable will unlock 1.22 million IMX per day for 28 consecutive days (approximately $2.99 million per day), accounting for 2.83% of the circulating supply;

At 4:00 (UTC) on December 30th, Optimism will unlock 24.16 million OPs (approximately $79.97 million), accounting for 2.65% of the circulating supply;

At 4:00 (UTC) on December 31st, Sui will unlock 4 million SUIs (approximately $2.92 million), accounting for 0.39% of the circulating supply;

Today’s Main Token Trends

BTC

Last week, BTC consistently closed above $42,500. This morning, it closed retracing to the midpoint of the channel. This week is expected to test two resistance targets: $45,345 and $47,990. The support levels are holding at $40,280 and $38,399, indicating continued high-level volatility in the medium term.

ETH

ETH maintained high-level oscillation above $2,135 last week. This week anticipates a continuation of the upward trend, targeting $2,489 and $2,838 in the medium term. Utilizing a risk-reward strategy for spot and contracts, with a short-term focus on support at $2,135.

COMP

The daily chart has converged for a year and a half, signaling a potential upward movement. This week may bring a bullish trend, with support at the trend upper boundary and $54.82. Breakthrough targets include $64.97, $72.85, $77.71, and $81.64.

Macro level: “interest rate cut flame” continues to spread, to liquidity shortage during Christmas holiday

Over the past week, after Federal Reserve Chairman Powell “released a dovish stance,” several Federal Reserve officials quickly appeared to “put out the fire” and attempted to ease market expectations. But after several impressive inflation reports were released on Thursday and Friday, the market became more convinced that the Federal Reserve would cut interest rates in March next year.

Last Friday, the US dollar index fell slightly during the European session and briefly hit an intraday low of 101.42. However, it regained some lost ground during the US session and ultimately closed down 0.08% at 101.70. The yield of 10-year US Treasury bonds fell first and then rose, and closed at 3.9% during the US market period, ultimately closing at 3.901%; The two-year US Treasury yield, which is more sensitive to the Federal Reserve’s policy interest rates, closed at 4.329%.

Spot gold once surged above the $2,070 level, reaching a new high in nearly two weeks, but ultimately failed to stabilize above the $2,070 level and gave up most of its gains, closing up 0.34% at $2,052.99 per ounce; Spot silver plummeted significantly in the US market and briefly approached the 24 mark, ultimately closing down 0.87% at $24.19 per ounce.

Due to market concerns that Angola’s announcement of withdrawal from OPEC may further increase production, international crude oil has slightly declined. WTI crude oil was blocked around $75 and then plummeted significantly during the US session, ultimately closing down 0.7% at $73.93 per barrel; Brent crude oil still failed to stabilize above the $80 mark and ultimately closed down 0.6% at $78.87 per barrel.

For the US stock market, the S&P 500 index rose more than 4% in December alone, and has accumulated a total of 24% since the beginning of this year, less than 1% away from historical highs. In addition, the US S&P 500 index closed up 0.17%, while the tech dominated Nasdaq Composite Index closed up 0.19%. The Dow Jones Industrial Average closed down 0.05%, and it is worth noting that the three major US stock indexes have recorded their eighth consecutive week of gains.

If viewed from history, this momentum may continue in the short term. The end of the year is often a strong period for the stock market, and this phenomenon is known as the “Santa Claus rebound.”

In addition, although the Federal Reserve’s voting committee is about to undergo an annual rotation, and the voting members in 2024 are slightly more hawkish than those who will step down in 2023, the market does not expect this to change the prospect of the Federal Reserve turning to interest rate cuts next year.

Many analysts believe that if inflation continues to decline faster than expected, Federal Reserve policymakers will hope to cut interest rates by more than the 75 basis points implied by the latest forecast released last week. The PCE data only reinforces this viewpoint.

In addition, some analysts suggest that there is another reason for interest rate cuts next year, which is that keeping the benchmark interest rate unchanged will push up actual borrowing costs as inflation decreases. Therefore, the Federal Reserve must lower policy interest rates to prevent excessive tightening.

As the United States enters the Christmas holiday this week, it is unlikely that Federal Reserve officials will suddenly appear to hit market expectations, and the flame of interest rate cuts is likely to continue to ravage the market.

For traders, a major risk to be wary of this week may be a shortage of liquidity. Due to many traders being taken offline due to holidays, market liquidity will be scarce.

When liquidity is low, financial markets may fluctuate significantly without any real news. If there are news headlines, their impact on the market may be greater than usual. In other words, low liquidity conditions will amplify volatility.

This Monday’s Christmas is a public holiday in most parts of the world, so most stock and bond markets will be closed. However, the foreign exchange market will continue to open as usual.