Weekly Market Rollup - 04/01/2023

In this Week's Market Rollup

Modest price action for the majors, ETH founder praises ‘ETH-killer’, SBF denies activating wallets while under house arrest, and the major crypto exchange winners after FTX's demise.

We cover it all, and more, in this week’s Rollup!

Market Highlights

• Bitcoin’s (BTC) hash rate plummeted by 38% after multiple mining companies halted operations due to extreme weather conditions.

• Lido DAO (LDO) surpassed Maker DAO (MKR) to become the largest DeFi protocol by total value locked, causing LDO’s price to surge by 17.4%.

• Wallets linked to Alameda Research were noticed transferring crypto funds and swapping numerous tokens for BTC last Wednesday.

• Ethereum (ETH) founder contributes to so-called ETH-killer's 12.0% price surge.

Price Movements

Bitcoin (BTC)

Bitcoin (BTC) and the rest of the market were mostly frozen this week, with most leading cryptocurrencies seeing very little price movement to end the year. BTC spent the better part of the week trading between US$16,500 and US$16,700, eventually closing at US$16,670, down 0.8% week-on-week.

Despite the minor price action seen with BTC at the end of the December, the new year marks the fourth consecutive red quarterly candle for the leading cryptocurrency by market cap, down 65.2% year-on-year.

Bitcoin’s hash rate tumbled nearly 40% after a number of U.S.-based BTC miners had to pause operations due to extreme weather conditions. A massive winter storm on December 23 left over one million Americans without power and caused mining companies such as Riot Platforms and Core Scientific to halt operations.

As a result, Bitcoin’s hash rate fell to 156.36 EH/s on December 24 from 252.98 EH/s on December 21, marking the biggest daily drop in hash rate since the beginning of June 2022. Despite the drastic move, the drop in hash rate had minimal impact on the price of BTC, and eventually recovered to 249.09 EH/s by Sunday evening.

Ethereum (ETH)

Ethereum (ETH) saw similar price action to BTC this week, spending the majority of the week ranging between US$1,190 and US$1,210. The recovery of Bitcoin’s hash rate on Sunday night helped push ETH’s price back above the upper range, where it closed the week at US$1,213, down 0.4% over the last seven days.

Altcoins

While it was a rather lacklustre end to the year for the vast majority of the crypto space, a few projects pulled away from the pack and posted a positive returns.

GameFi tokens surged after game publisher giant Square Enix reaffirmed its commitment to blockchain and Web3 gaming in its annual New Year's letter. ApeCoin (APE) rallied 6.3% following the announcement and continued to rally after finalising its Special Council elections on Thursday, closing the week up 8.5%.

Dent (DENT), the mobile data crypto operator built on top of Etheruem, rallied 15.1% over the last seven days. No event or announcement can be linked to the price surge precisely; however, the Dent mini-app launched on Binance marketplace on December 8, which allows users to access Dent eSIM data directly through the Binance app, increasing exposure to the protocol.

The best performer was Lido DAO (LDO), a liquid staking solution that increased by 17.4% week on week. The move followed the news of Lido DAO surpassing Maker DAO (MKR), the issuer of the stablecoin DAI, and becoming the largest DeFi protocol by total value locked (TVL). With the beacon chain withdrawals expected to go live this year with the Shanghai upgrade, the demand for liquid staking protocols could remain high as users seek out alternative ways to earn yield.

In Other News

The FTX Saga

The FTX saga continues as wallets linked to Sam Bankman-Fried’s Alameda Research were noticed swapping and transferring crypto funds to various wallets. On Wednesday, the wallets were spotted swapping over US$1 million worth of obscure tokens for BTC and ETH via coin mixers—apps that obfuscate crypto transactions to hide their origins.

People were quick to accuse Bankman-Fried of moving the funds himself; he, however, denied these allegations. Others suggested the transfers were being initiated by a liquidator, but it seems unlikely that a liquidator would require such tools. As such, the person or persons controlling the wallets remain unknown.

FTX's Pain is Coinbase and Kraken's Gain

A December report by CryptoCompare shows market share moving to regulated exchanges after the FTX collapse. With FTX’s market share falling to 0% in December, the largest gainers from October-December 2022 were Coinbase and Kraken, with gains of 10.8 and 8.7 percentage points respectively.

Vitalik Praises 'ETH-Killer'

It appears that ETH founder Vitalik Buterin has contributed to Solana’s (SOL) recent price surge. SOL saw seen its value increase by 12.0% on Monday, pushing it beyond the $11 mark.

This rally comes after Buterin expressed his optimism for so-called ‘ETH-killer’ Solana's future by tweeting that "smart people" have informed him that the smart developer community in Solana is thriving and that the chain has a "bright future". See the tweet below.

Regulatory

As of January 1, the U.K. has enacted a tax exemption for foreign investors who purchase crypto through local investment managers. The exemption is an important factor in attracting global investors and aims to build on Prime Minister Rishi Sunak’s plan to turn the U.K. into a crypto hub and provide regulators with more power over crypto.

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Recommended reading: What is Crypto Liquidity, and Why Does it Matter?