I. Today's Major Events
1. BTC fell below 94,000 USDT this morning, with a 24H decline of 0.55%. Coinglass data shows that in the past 24 hours, the entire network faced liquidations totaling $150 million, with long positions liquidated at $122 million and short positions liquidated at $28.454 million.
Robert Kiyosaki stated that BlackRock, under Larry Fink's leadership, is currently selling off a large amount of Bitcoin and driving its price below $100,000 to buy at a lower price. He therefore recommends against investing in BTC through BlackRock's ETF and advocates for direct investment models, stating, "I like Bitcoin in my own wallet; I do not trust the Bitcoin in BlackRock's ETF."
I strongly agree with Kiyosaki's view, as while BTC is falling, ETH is not, which clearly indicates someone is suppressing the price to accumulate.
2. Gavin Wood stated in the 2024 annual summary that Polkadot has entered a watershed period, shifting its core goal from achieving the product objectives in the white paper to optimizing and enhancing stability to better meet market demands. On the technical front, Polkadot launched several significant advancements in 2024, with the Mythical Game project pushing towards extreme performance. Meanwhile, Gavin proposed the Proof-of-Personhood mechanism aimed at addressing the threats posed by generative AI to the free world, planning to launch in 2025 by combining ZK technology to provide a trustworthy identity solution.
3. Tether CEO Paolo Ardoino retweeted a post from weRate co-founder and JAN3 CEO on the X platform, mentioning that there is a lot of "FUD information" regarding USDT in the market, but the reality is that USDT will not be deemed illegal in Europe on December 30, 2024. MiCA rules need to be followed, but stablecoin service providers have a transition period of 6 to 18 months, and some exchanges are awaiting clear information.
While USDT is facing FUD, Tether has exceeded $10 billion in net profit this year, stimulating multiple global banks to join the stablecoin market and share in the profits, including:
1) Societe Generale-Forge, a subsidiary of Société Générale, launched a euro-backed stablecoin;
2) Oddo BHF SCA is also developing a euro-denominated stablecoin;
3) London-based Revolut is considering issuing its own stablecoin;
4) DWS, a subsidiary of Deutsche Bank, plans to launch a stablecoin next year;
5) BBVA also plans to enter the stablecoin market and has partnered with Visa to launch a tokenized network for banks to issue stablecoins, which will be piloted in 2025.
6) Standard Chartered Bank and Animoca Brands, along with Hong Kong Telecom, have been selected by the Hong Kong Monetary Authority as one of the first banks to issue Hong Kong dollar stablecoins in the experimental project.
4. MicroStrategy founder Michael Saylor has released Bitcoin Tracker-related information for the eighth consecutive week. However, this time is different from previous ones; he stated, "The blue line on the website is disturbing." (Note: After each BTC purchase by MicroStrategy, a green dot is marked on the corresponding date, while the BTC price trend line is shown in blue.) According to previous patterns, MicroStrategy always increases its Bitcoin holdings the day after related news is announced.
II. Market Data
1. According to data from the RWA monitoring platform RWA.xyz, as of December 30, the market size of tokenized U.S. Treasury bonds reached $4 billion. Additionally, the on-chain value of RWA assets once exceeded $15 billion, currently standing at $14.8 billion.
2. As of December 27, the cumulative increase in the U.S. Bitcoin spot ETF for the month is 49,591 BTC, currently the sixth highest month of accumulation this year.
Currently, BlackRock's IBIT holds 552,555 BTC, which is 2.67 times the holding of Grayscale's GBTC (206,860 BTC).
3. The nominal value of the total open positions for BTC options across the network is $25.08 billion; the nominal value of open positions for ETH options is $6.37 billion, which has sharply decreased compared to two days ago. (Indicators are more sensitive than contracts)
4. In December, the overall market capitalization of Memecoin dropped by about 30%, indicating a slowdown in the development momentum and demand for meme-based tokens. CoinMarketCap data shows that on December 1, the total market capitalization of memecoins was $120.14 billion. On December 9, this figure rose to $137.06 billion and then fell to a low of $92.67 billion on December 23. This means that the market capitalization decreased by 32.38% during the month. Currently, the market capitalization is approximately $98.78 billion, down about 14.61% from the beginning of the month.
5. Bitcoin mining difficulty experienced an adjustment at block height 876,960 (December 30, 2024, 5:55:37), increasing by 1.16% to 109.78 T, setting a new historical high. The current average network hashrate is 781.07 EH/s.
III. Industry-related knowledge
The U.S. Treasury Department and the IRS released the final version of the regulations last Friday (27th), which will require "decentralized finance (DeFi) brokers" to report the total earnings from digital asset sales starting January 1, 2027, to strengthen tax compliance and reduce the tax gap. The new regulations clearly define the scope of brokers, covering various service providers in cryptocurrency trading, with a particular focus on detailing the tax information reporting obligations of DeFi participants. New regulations for DeFi brokers: Analysis of obligations, scope, and exceptions Broker information reporting obligations
According to KOL Ni Da's summary, all future DeFi brokers will need to submit information reports to the IRS (such as Form 1099-B), which should include the following content:
- Total trading revenue: The total earnings amount from digital asset trading.
- Information of both parties in the transaction: including identity, address, and other basic information.
- Transaction details: Record the asset transfer price and cost basis.
- Expansion of the definition of brokers
- The new regulations clarify the definition of brokers, including individuals and organizations that provide services for digital asset trading, including but not limited to:
- Transaction matching service providers
- Market makers
- Order matching service providers
- Enterprises providing custodial or similar services
Especially in the DeFi space, intermediaries participating in digital asset trading, such as major entry websites or protocol front-end service providers involved in digital asset transfers, will also be considered brokers.
Exception clauses
The following categories do not fall under the broker reporting obligations:
- Participants who are only responsible for verifying transactions (such as validators).
- Providers who only manage digital asset private keys through hardware or software.
- Other participants who do not directly participate in the transaction facilitation or do not have knowledge of transaction details.
- The crypto industry rebounded, but there may be room for adjustments.
After the new regulations were released, they sparked widespread criticism within the crypto industry. Some believe that the requirement for "DeFi to have KYC" is unrealistic. Galaxy Digital's research director Alex Thorn pointed out as early as last year that the DeFi industry may face three choices in the future:
- Complying with IRS reporting requirements and accepting broker identity.
- Preventing U.S. users from using their services.
- Abandoning upgrades and income generation for smart contracts.
If DeFi applications do not provide a front-end website, do not support upgrades, and do not charge transaction fees, they may avoid being classified as brokers. In other words, extremely decentralized applications, due to their inability to obtain relevant information, cannot meet the reporting requirements for brokers.
Despite the new regulations being finalized, their implementation still has uncertainties. The new rules may face congressional scrutiny, especially after the inauguration of new congressional members, as Congress has the authority to review or veto the provision. Earlier this year, Congress vetoed the SAB 121 rule regarding digital asset accounting. Consensys lawyer Bill Hughes criticized the timing of the new regulations' release on social platform X and explained:
- Lawsuits are expected to allege that the provision exceeds the Treasury's authority and violates the Administrative Procedure Act (APA).
- The regulations may enter the congressional review phase, at which point Congress may veto the provision, similar to the handling of SAB 121.
The outgoing government has not left quietly; this game is still ongoing. If you are feeling lost and unsure how to approach this market, like and leave a message, and I will guide you through the entire bull market.
