Crypto Market

BTC and ETH Market Insight

In 2023, crypto assets had a remarkable year, experiencing significant growth in their market caps. Bitcoin's market cap increased by 172%, while the broader crypto asset ecosystem saw a rise of over 90%. This week, we saw the biggest BTC market liquidation event since the uptrend from 25k began in August. Also, it was the most significant liquidation event for altcoins in two years and the whole market cap was down 7.2% because of the rumor of the ETF being denied. $SEI and $ARB were among the top performers bouncing back after the sudden dip, and funding rates were back down to normal territory.

Options Market

The swift correction on Wednesday washed out most of the leveraged longs and reset the funding cost, which consequently could lower the volatility on the impending ETF decision.7-day implied volatilities popped above 70 points  and keep climbing up as we approach the big event. The options market isn’t paying a huge premium for calls compared with October/November level, which suggests that ETF news has been mostly priced in - traders prefer bullish call spreads to outright calls. To speculate on the downside, bearish risk reversals and put butterflies could be choices.

Altcoins and Blockchain News

• According to Coinglass data, the grayscale GBTC premium rate has narrowed to 5.59%, while the ETH trust premium rate is 9.96%.
• Bitcoin Core developer Luke Dashjr initiated proposal "datacarriersize: Match more datacarrying #28408" to discuss the issue of restricting inscriptions. After discussions among multiple Bitcoin Core developers, the proposal did not pass.
• According to Fox Business, BlackRock expects Bitcoin ETF to be approved on Wednesday.
• Synthetix officially announced the launch of the Andromeda version on social media, introducing Core V3 and Perps V3 deployments, adopting USDC as a new collateral, and expanding to the Base chain. This step makes Synthetix a multi-chain protocol.
• Binance announced its support for Kava (KAVA) Ethereum Virtual Machine (EVM) integration.
• AI startup Perplexity completed a Series B funding round with a valuation of $520 million and raised $73.6 million. The round was led by IVP, with participation from A-round investors NEA, Elad Gil, Nat Friedman, and Databricks, as well as new investors including NVIDIA, Jeff Bezos (through the Bezos Expeditions fund), Balaji Srinivasan, Guillermo Rauch, Austen Allred, and others.
• Binance Labs announced an investment in Memeland's native ecosystem token, Memecoin (MEME).
• Mina Protocol plans to deploy the Berkeley upgrade this year. The upgrade will bring performance enhancements while leveraging Mina's design without affecting scalability or decentralization.

Macro

The major indexes took a breather for the first week of 2024, after a nine-week winning streak: the DJIA lost -0.6%, the S&P 500 lost -1.5%, and the NASDAQ -3.2%. The benchmark 10-year U.S. Treasury note moved higher for the week. That said, the market jumped into 2024 with favorable expectations: the upcoming rates cutting and the recovery of the global economy.