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Bullish Insights Weekly Market Recap

Jan 18, 2024 3 min read

Bullish exchange

This week’s peak spot exchange trade volume (24h): $1,029,391,745 on January 17, 2024.

This week’s headlines

  • The European Council and Parliament have tentatively agreed on a new anti-money laundering framework that will enforce stricter due diligence requirements for cryptocurrency firms, especially for transactions over €1,000 or involving self-hosted wallets. This agreement awaits formal adoption by both bodies and subsequent publication in the EU's Official Journal to become effective.
  • Wise Lending, a Web3 lending app and yield aggregator, was compromised on January 12, losing 170 ETH worth $440,000, likely due to a flash loan exploit involving an oracle price manipulation. The attacker used a flash loan to borrow $2.9 million in Lido Staked Ether (stETH) from Aave and transferred various tokens to an unverified contract before siphoning off the assets.
  • The US Treasury and IRS have announced their decision to temporarily suspend the enforcement of new digital asset reporting rules while they refine the regulations under the Infrastructure Investment and Jobs Act. Although the Act reclassified digital assets as "cash equivalents," requiring businesses to report transactions over $10,000, this mandate is on hold until further guidance is issued.
  • Ethereum's core developers have rolled out the Dencun upgrade, which includes proto-danksharding via EIP-4844, on the Goerli test network, before the eventual mainnet deployment. The upgrade that went live at around 1:35 a.m. ET introduces a new way to handle transactions and off-chain data that aims to significantly cut costs for Ethereum-based applications, with Layer 2 rollup chains standing to gain the most.
  • Solana Mobile is gearing up to release a second device, featuring a built-in crypto wallet, a dedicated dApp store etc. The new hardware is reportedly priced at a more affordable range. The original device, initially costed $1000, experienced price cuts following lackluster sales after its launch last year.
  • CTO of Bitfinex, Paolo Ardoino confirmed in an X post that there was an attempted exploit known as "Partial Payments" aimed at @bitfinex but the attacker was unsuccessful.
  • According to Arkham Intelligence, in the past week, Celsius has moved over $125 million in ETH to various cryptocurrency exchanges, including $95.5 million to Coinbase and $29.7 million to FalconX, as part of its strategy to start repaying its creditors.

Equity markets

  • Consumer discretionary stocks and airline shares rallied in Friday’s session with the S&P 500 up by 0.1%. The Dow Jones Industrial Average fell by 0.3% and the Nasdaq Composite was flat.
  • US equity markets closed on Monday for public holiday.
  • US equity markets saw a pull-back in Tuesday’s session after Fed Governor Christopher Waller’s comments of a slower pivot to easing policy. The S&P 500 fell 0.4%, the Dow Jones retreated by 0.6% and the Nasdaq Composite dipped by 0.2%.
  • US equity markets retreated in Wednesday’s session after retail sales indicated growth of 0.6% in December from the month prior dialing back expectations of any immediate rate cuts by the Fed. The S&P 500 fell 0.6%, the Dow Jones retreated by 0.3% and the Nasdaq Composite dipped by 0.6%.

Crypto market highlights

  • Tether USDT has grown significantly in market dominance over the past year to currently holding 71% of the total stablecoin marketcap. Surprisingly, majority of the total $95bn circulating supply is on Tron chain at $48.6bn followed by Ethereum at $39.7bn and Binance Smart Chain at $3.6bn.
  • On-chain private credit is starting the year off with a strong rebound in active loans. From $255.98mn on January 1, the value of total active loans has almost doubled to $490.76mn as of January 17. Centrifuge has seen the most notable growth overtaking Goldfinch as first place by total loan value.
  • The SEC’s approval of a spot Bitcoin ETF last week drove $1.18bn worth of inflows into digital asset investment products. Trading volume for the same week reached $17.5bn which was almost 9x 2022's weekly average. By provider, Grayscale Investments saw majority of outflows at $579mn last week. “Other” providers and ProShares ETFs saw majority of inflows at $1.6bn and $265mn respectively. By country, unsurprisingly the US saw majority of inflows at $1.24bn with Canada and Germany seeing majority of outflows at $44.2mn and $27mn respectively.
  • For the first time since September 2022, the market is now in Altcoin Season. Altcoin Season occurs when at least 75% of the top 50 cryptocurrencies outperform Bitcoin over the past 90 days. A measure of above 75 means it is Altcoin season while a figure below 25 indicates it is Bitcoin season.

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