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- Bitcoin, Ethereum, Cosmos and more Week 50 2024
Bitcoin, Ethereum, Cosmos and more Week 50 2024
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TL;DR
BlackRock Advocates 2% Bitcoin Allocation
Russia Considers Strategic Bitcoin Reserve
Eigen Foundation Supports Ethereum’s Protocol Guild
Grayscale Expands with Lido and Optimism Funds
Cosmos Acquires Skip for Growth
SilentSwap Launches Privacy-Focused Cross-Chain Aggregator
Early Bitcoin Investor Sentenced for Tax Evasion of $3.7M
Japan Considers Strategic Bitcoin Reserve
and much more!
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Bitcoin Highlights of the Week
BlackRock, managing $11.5 trillion in assets, recommends a 1-2% Bitcoin allocation for traditional portfolios, highlighting its diversification benefits while emphasizing risk management. In a typical 60/40 portfolio split, Bitcoin’s risk profile aligns with mega-cap tech stocks like Apple and Microsoft, which also influence risk-weighted portfolios significantly.
However, allocations exceeding 2% could amplify overall volatility due to Bitcoin’s unique market dynamics. This cautious endorsement marks a pivotal step in Bitcoin’s mainstream acceptance, signaling its role as a credible asset. As Bitcoin’s volatility declines, its utility and adoption in institutional strategies could grow, further integrating cryptocurrency into global financial systems.
Russian State Duma Deputy Anton Tkachev has proposed creating a strategic Bitcoin reserve akin to the country’s traditional currency reserves. Submitted to Finance Minister Anton Siluanov, the proposal argues that Bitcoin offers a viable alternative to inflation-prone and sanction-vulnerable currencies like the dollar and euro.
The initiative also aligns with Russia's ongoing experiment in cross-border crypto settlements. This proposal comes amidst a global trend, with nations like the U.S., El Salvador, and Brazil exploring similar reserves. Recently, President Putin reinforced Bitcoin’s inevitability, legalizing its mining and emphasizing its growing role in international trade and financial stability.
The City of Vancouver has approved a motion to explore integrating Bitcoin into its financial system. Led by Mayor Ken Sim, the initiative includes examining Bitcoin's potential for tax payments, municipal reserves, and as a hedge against inflation. A feasibility report is expected by Q1 2025.
While proponents highlight Bitcoin's decentralized nature and performance as a hedge, critics cite environmental concerns and its links to crime. Regulatory hurdles, including restrictions on local governments holding digital assets, could impede progress. The study will assess risks, benefits, and environmental impacts, marking a pivotal moment in Vancouver's financial strategy.
Microsoft shareholders voted against a proposal to allocate 1% of the company’s $78 billion treasury to Bitcoin at the December 10 shareholder meeting. Citing Bitcoin’s price volatility and its unsuitability for stable reserves, Microsoft’s board emphasized the need for predictable investments.
The proposal, backed by MicroStrategy co-founder Michael Saylor, garnered only 0.55% approval. While Bitcoin advocates criticize this cautious stance, Microsoft prioritizes investments in strategic areas like AI. The board remains open to reassessing Bitcoin as regulations evolve and markets stabilize, reflecting the ongoing debate between traditional finance priorities and digital asset opportunities.
Marathon Digital Holdings (MARA) has expanded its Bitcoin treasury with the purchase of 11,774 BTC for $1.1 billion, funded through zero-coupon convertible notes. This brings MARA’s total holdings to 40,435 BTC, valued at approximately $3.9 billion—nearly 0.2% of Bitcoin’s finite supply.
The company has achieved a year-to-date Bitcoin yield of 47.6%, underscoring its aggressive accumulation strategy. Despite a Q3 net loss of $124.8 million, MARA’s approach mirrors MicroStrategy’s bold Bitcoin bet, reflecting confidence in its long-term potential. However, the strategy carries risks tied to debt and shareholder dilution, making it a high-stakes play on Bitcoin’s future.
Ethereum Highlights of the Week
The Eigen Foundation has pledged 1% of its EIGEN token supply to the Ethereum Protocol Guild, benefiting 180 members from 29 teams focused on Ethereum layer-1 maintenance. EigenLayer, a restaking protocol integral to Ethereum, allows staked assets like Ether to be reused, offering additional yields while enhancing network security.
Dominating the restaking sector with $18.2 billion of the $26.9 billion total value locked, EigenLayer plays a pivotal role in reducing entry barriers for developers and DApps. This move aligns with the broader adoption of restaking, emphasizing its potential to attract fresh capital and boost decentralized finance ecosystems.
Grayscale Investments has launched funds for Lido DAO (LDO) and Optimism (OP) tokens, enhancing its suite of single-asset crypto products. Lido, the largest decentralized finance protocol with $40 billion in total value locked, simplifies Ethereum staking, while Optimism, a leading layer-2 solution with $800 million in TVL, powers Ethereum scaling and supports networks like Base and Unichain.
These funds aim to provide qualified investors exposure to Ethereum-focused efficiency and scalability innovations. Grayscale, managing $35 billion in assets, continues expanding its offerings, including recent trusts for Aave, MakerDAO, and Sui, alongside its flagship Bitcoin and Ethereum ETFs.
The U.S. Securities and Exchange Commission (SEC) has progressed NYSE Arca's application to list Bitwise’s Bitcoin and Ethereum spot exchange-traded fund (ETF), soliciting public comments on the filing. Proposed on Nov. 26, the ETF seeks to offer balanced exposure to BTC and ETH in an accessible format.
Industry analysts predict a rise in index ETFs, akin to the S&P 500 in traditional finance. Competing filings, including Bitwise’s 10 Crypto Index Fund and Grayscale’s Digital Large Cap Fund, highlight growing interest. The regulatory landscape may shift in 2025 as crypto-friendly leaders are set to assume key roles under President-elect Donald Trump.
BlackRock’s iShares Ethereum Trust has experienced a remarkable surge, drawing in $1.5 billion in inflows over a 16-day period, with a $200 million increase on December 14. This follows a successful streak since its July launch, making Ethereum ETFs a key focus for institutional investors.
Global investment in Ethereum products reached $3.5 billion in the same period. Despite challenges from layer-2 networks, Ethereum’s appeal is rising. BlackRock’s dominance, alongside rising competition from other asset managers, signals growing institutional interest in Ethereum, contributing to its price momentum and making Ethereum ETFs a dominant force in the market.
Ethereum's price rebounded 11.6% from December 10 to 12, climbing from a $3,500 low. Key drivers include robust inflows into Ether spot ETFs and a surge in decentralized application (DApp) activity. Ethereum’s total value locked (TVL) rose to $78 billion, a 31% increase in 30 days, fueled by increased deposits in protocols like AAVE and EigenLayer.
Ethereum’s dominance in DApp volumes remains at 47%, surpassing Solana in various sectors. Analysts, including Bitwise, project further growth, with a $7,000 target driven by ETF adoption and layer-2 expansion, suggesting Ethereum could reach new highs in the short term.
Cosmos Highlights of the Week
The Interchain Foundation (ICF) has acquired Skip, a leading ecosystem team, renaming it Interchain Inc. This move brings Skip's expertise in product strategy and engineering to accelerate Cosmos’ growth. Under the leadership of Skip co-founders, Interchain Inc. will focus on enhancing the Cosmos Hub, expanding liquidity, and improving user adoption.
The ICF shifts to an in-house development model, aiming to unify the ecosystem, streamline the Interchain Stack, and strengthen Cosmos' market position. With a goal of increasing liquidity 100x, Cosmos is poised to expand its reach, drive user growth, and enhance its developer ecosystem.
Helix, the first fully on-chain orderbook for native spot, perpetuals, and RWAs, introduces its points program to reward user activity and loyalty. Points accrue daily based on volume, products traded, and platform engagement, with weekly updates to criteria.
Early users will receive Genesis points, and a dashboard is available for tracking progress. With revamped onboarding and upcoming trader-focused products, Helix sets the standard for on-chain trading. Fully community-driven, Helix remains free from VC influence, ensuring its ecosystem stays in users' hands.
Cosmos Hub has invested in Sphinx Protocol, aiming to revolutionize the $50 billion commodities derivatives market. By providing a blockchain-based, high-throughput, 24/7 trading system for energy derivatives, Sphinx addresses inefficiencies like high costs and limited market access.
With scalable infrastructure and near-instant transaction finality, Sphinx is set to become the first fully regulated on-chain commodities exchange. Already partnered with firms managing over $30 billion in assets and boasting 15k+ testnet signups, this investment strengthens Cosmos Hub’s position in the global commodities market, enhancing liquidity and setting new compliance standards for Web3 financial systems.
KuCoin now offers USD Coin (USDC) via the Noble network, expanding access to the stablecoin within the Cosmos ecosystem. Noble, an appchain designed for native asset issuance, integrates seamlessly with Cosmos and the Inter-Blockchain Communication (IBC) protocol.
KuCoin users can now deposit USDC on the Noble network by selecting the USDC (Noble) option in the Assets > Funding Account > Deposit page. Withdrawal services are yet to be restored, with further updates expected in a future announcement. This move enhances cross-chain interoperability within the Cosmos ecosystem, making USDC more accessible.
SilentSwap, powered by Secret Network, launched its privacy-focused cross-chain aggregator on December 9, 2024. The platform offers two privacy options for swaps: Semi-private, which allows tracking but with reduced cost and speed, and Max Privacy, providing strict anonymity.
Users can select source and destination chains, choose tokens, and set privacy levels before executing swaps. After confirming the transaction from their wallet, users can track the process in real time and receive tokens in 5-20 minutes. SilentSwap aims to meet the growing demand for secure, decentralized trading with enhanced privacy features.
Other Highlights of the Week
Frank Richard Ahlgren III, an early Bitcoin investor, was sentenced to two years in prison for tax evasion after failing to report $3.7 million in Bitcoin sales from 2017 to 2019. Ahlgren underreported his capital gains by inflating his cost basis and using methods like mixers, multiple wallets, and cash conversions to conceal the income.
This case represents the first criminal tax evasion prosecution in the U.S. focused solely on cryptocurrency. It underscores the increasing efforts by regulators to track digital asset transactions, highlighting the importance of transparent tax reporting in the crypto industry.
Ripple’s RLUSD stablecoin has received approval from the New York State Department of Financial Services (NYDFS), allowing it to launch in one of the strictest jurisdictions for digital assets. CEO Brad Garlinghouse confirmed the development, with integration into exchanges expected soon.
RLUSD will operate on both the XRP Ledger and Ethereum, positioning itself as a key competitor in the stablecoin market. This regulatory green light highlights the importance of compliance in the stablecoin space, while Ripple’s cross-chain compatibility and liquidity support could help it gain traction against rivals like USDC and Tether.
Japanese Member of Parliament, Satoshi Hamada, has proposed that Japan establish a Strategic Bitcoin Reserve, following the lead of nations like Argentina and Russia. This suggestion arises amid recent fluctuations in Bitcoin’s price, which have sparked discussions about its potential as a national asset.
The proposal underscores growing interest in Bitcoin’s role within global economic strategies, highlighting how countries are evaluating cryptocurrency reserves. As Bitcoin's prominence rises, Japan may follow suit in leveraging the digital asset for economic stability.
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