Token Chronicle - Week 4 December 2024

Top cryptos

Meme of the week

Market update: As expected, we see a calmer market with slightly less volatility; BTC is trading between $92K and $96K after hitting the ATH of $108K on December 17. There is a lot of uncertainty about a potential deeper dip before the rally resumes at the end of January; the market currently offers several short-term buying opportunities ahead of the major bull run in 2025.

Main points this week:

International Updates

1. MARA Holdings now heats 80,000 people through Bitcoin mining in Finland
   Bitcoin mining, often criticized for its energy consumption, is once again demonstrating its ecological potential. MARA Holdings uses the heat produced by its mining operations in Finland to heat more than 80,000 people, illustrating an innovative shift toward sustainable use of energy resources. While Bitcoin's energy consumption exceeds that of some countries, it remains far below that of common activities such as the use of dryers in the United States or Christmas lights and decorations. Bitcoin mining could play a significant role in Finland's environmental goals for 2030. In response to European Union requirements, the country has pledged to completely eliminate the use of fossil fuels for heating buildings, favoring bio-oils and other green solutions.

2. France: Exaion, a subsidiary of EDF, receives PSAN approval
   In recent days, the Financial Markets Authority (AMF) has granted PSAN approval to several French companies. Among them is Exaion, a subsidiary of EDF, known for designing and offering digital solutions, some of which are blockchain-based. Founded in 2020, Exaion develops and offers various digital solutions to support companies in their digital transformation "in a responsible and sustainable way." The EDF group company will soon enter the blockchain world by becoming a validator for the Tezos (XTZ) network.

3. France: Cometh obtains enhanced PSAN registration and launches its crypto treasury optimization service
   After Société Générale - Forge, Deblock, and GOin, Cometh has announced obtaining its enhanced PSAN registration. For the company, this is a golden opportunity to become one of the major players in blockchain adoption in France and Europe. Founded in 2021, the company was created with the aim of "offering secure, compliant, and efficient services in the digital asset ecosystem." Thus, Cometh supports companies in adopting blockchain. Alongside obtaining its enhanced PSAN registration, Cometh introduced a new solution it describes as a treasury optimization service. Its goal: to ensure that companies can capitalize on their surplus treasuries. With its new service called Treasury, the company invites businesses to manage their treasuries using stablecoins.

4. Russia bans Bitcoin (BTC) mining in 10 regions until 2031
   Starting January 1, 2025, 10 Russian regions will see cryptocurrency mining banned on their territory until 2031. What is striking is that, apart from the last two cities located in Ukrainian territory, the other eight regions are near the border with Georgia, with whom Russia shares tensions.

5. El Salvador adapts its Bitcoin strategy but does not abandon its vision
   A president is, above all, there to govern his country and address the concrete challenges of his people, and Bitcoin is just one tool among others to help achieve these goals. Despite recent adjustments, El Salvador's Bitcoin strategy remains unchanged, with the goal of using it to modernize the economy and attract investments while meeting the needs of its people. El Salvador has announced that it will continue its Bitcoin purchases, perhaps more rapidly, a day after reaching a financing agreement with the IMF, which had recommended limiting its exposure to cryptocurrency.

6. Russia uses Bitcoin for international transactions, claims the Russian Finance Minister
   Bitcoin is officially part of Russia's economic strategy. Anton Silouanov, Minister of Finance, confirmed the use of BTC by Russian companies for international trade. This announcement, combined with favorable mining and trading regulations, illustrates the rapid evolution of Russia's position regarding Bitcoin usage. In March 2024, an investigation revealed that $20 billion of USDT had passed through Garantex, a Russian exchange platform, despite international sanctions. Meanwhile, the Central Bank of Russia announced that citizens had exchanged a total of $51 billion in cryptocurrencies in 2023.

7. Bitcoin and Ethereum ETFs arrive in Argentina
   Argentina is opening up to global investments by allowing access to investment funds (ETFs) based on cryptocurrencies like Bitcoin and Ethereum, as well as gold. This approach aims to diversify investments, strengthen the economy by attracting foreign funds, and offer Argentines a way to protect their money against inflation and currency devaluation.

8. El Salvador now holds over 6,000 bitcoins (BTC)
   As El Salvador continues its Bitcoin purchases, its reserve now stands at over 6,000 BTC. At the current price, this represents $570 million.

9. Russia seeks to compel merchants and banks to accept its digital ruble
   The digital ruble is coming. Russia's central bank digital currency (CBDC) is indeed the subject of a new bill: banks and merchants will soon be required to accept it.

Compliance/Regulation/Justice

1. Terra Case: A Jump Trading subsidiary sanctioned by the Securities and Exchange Commission (SEC)
   Six months after Terraform Labs was compelled to pay over $4 billion in penalties following a settlement with the Securities and Exchange Commission (SEC), the U.S. financial regulator has turned its attention to a Jump Trading subsidiary allegedly linked to the Terra case. The company will have to pay over $86 million in profits earned from stabilizing TerraUSD, plus an additional $36 million as a penalty. Earlier this year, Terraform Labs reached a similar settlement with the SEC after its collapse. The company, formerly led by Do Kwon, is expected to pay nearly $4.5 billion in penalties, primarily to reimburse creditors.

2. Interpol issues a red notice against Richard Heart, founder of Hex
   A long-time crypto entrepreneur, Richard Heart, has been under the SEC’s scrutiny for nearly two years. Now accused of physical assault and tax evasion, he is wanted by law enforcement worldwide.

3. Terra Case: Do Kwon has been extradited to the United States
   After announcing that Do Kwon would indeed be sent to the United States, Montenegro confirmed the extradition of the founder of Terra (LUNA).

4. OFAC highlights hundreds of millions of dollars in cryptocurrencies linked to a Houthi network financed by Iran
   The Office of Foreign Assets Control (OFAC) sanctioned Sa'id al-Jamal and his network for their involvement in illicit activities tied to the Houthis, including arms trafficking and the use of cryptocurrencies to evade sanctions. This action underscores the U.S.’s commitment to disrupting Houthi financing while highlighting their strategic connections with Iran, China, and Russia.

5. The IRS has finalized rules requiring DeFi brokers to report digital asset sales, including user trade data and customer details, via 1099 forms for tax compliance. The Treasury says the rules align digital asset reporting with traditional finance, aiming to simplify tax filing and close compliance gaps. Critics argue the decentralized nature of DeFi makes these regulations difficult to enforce. The rules, effective January 1, 2027, stem from the 2021 Infrastructure Investment and Jobs Act and have faced opposition from industry groups like the Blockchain Association.

6. Malaysia’s Securities Commission has taken enforcement action against Bybit and CEO Ben Zhou for operating without registration. Bybit was ordered to cease Malaysian operations and advertising by December 25 and is working to obtain proper licenses. The SC warned investors about risks of financial crimes on unregistered platforms. Bybit had similarly exited France in August due to tightening regulations.

Traditional Finance

1. Bitcoin could reach $43 million if the U.S. creates a strategic reserve, says Van Eck
   Van Eck predicts that Bitcoin could hit $43 million by 2049 if the U.S. establishes a strategic reserve. This projection is based on the purchase of 1 million BTC by the U.S. government, a move that would likely disrupt the foundations of the global economy and monetary system. Van Eck anticipates U.S. debt will continue growing at about 5% annually from 2025 to 2049, adding $37 trillion. Meanwhile, BTC could achieve an annual growth rate of 25%, climbing from around $200,000 to over $42 million. At such a price, Bitcoin’s market capitalization would reach approximately $900 trillion, representing about 18% of global financial assets. Van Eck suggests that a strategic reserve of 1 million Bitcoins would equate to about 35% of U.S. debt.

2. Bitcoin’s (BTC) market capitalization will reach 20% of gold’s in 2025, says Galaxy Research
   Bitcoin (BTC) is on an upward trajectory for 2025, according to Galaxy Research, which predicts the cryptocurrency’s market cap will explode. The firm envisions BTC reaching $150,000 in the first half of the year and $185,000 by year-end. Other analysts, including VanEck, anticipate a breakthrough above this threshold. Galaxy Research further states that Bitcoin could reach 20% of gold’s market capitalization. Currently, gold’s market cap stands at $18.5 trillion, compared to Bitcoin’s $1.85 trillion, making BTC now more valuable than silver.

3. Robinhood CEO Vlad Tenev revealed internal discussions about buying bitcoin, similar to MicroStrategy, but stated the company has no plans to hold BTC reserves beyond servicing client trades. Tenev emphasized Robinhood is not an investment manager but acknowledged the company’s stock (HOOD), up 202% this year, is highly correlated with bitcoin’s 110% YTD return. The news follows MicroStrategy's purchase of 5,262 BTC for $561 million, bringing its total holdings above $40 billion.

Adoption

1. MicroStrategy adds 5,262 Bitcoins: the 7th consecutive week of investment
   MicroStrategy continues its aggressive Bitcoin investments. With 5,262 BTC added to its holdings, the company reaffirms its bold strategy to gain massive exposure to the cryptocurrency. This approach inspires more and more institutional players to follow suit.

2. Michael Saylor unveils his plan to make the U.S. the global leader in the digital economy with Bitcoin
   Michael Saylor presents his "Digital Assets Framework," a strategy to position the United States as a global leader in the digital economy by strengthening the dollar with a strategic Bitcoin reserve. This plan aims to boost U.S. businesses' competitiveness, attract foreign capital, and redefine Bitcoin as a major geopolitical tool in the digital economic war.

3. Hong Kong considers state reserves in Bitcoin (BTC)?
   In Hong Kong, a legislator has proposed adding Bitcoin (BTC) to the state’s reserves. This would be a significant step forward for cryptocurrency, a step increasingly being considered by countries worldwide.

4. Bitcoin in the European Central Bank’s reserves? A former German minister says yes!
   Since Donald Trump’s election, more countries have been positioning themselves on the idea of a strategic Bitcoin reserve. This idea, once dismissed by politicians, is now gaining traction. Most recently, a former German finance minister advocated for it.

5. Switzerland: A petition launched in favor of creating a strategic Bitcoin (BTC) reserve
   As more countries consider creating strategic Bitcoin reserves, Swiss cryptocurrency supporters have taken action by launching a petition. Depending on the number of signatures obtained, the Swiss National Bank might soon be obliged to create such a reserve.

Web3 News

1. Crypto.com launches a custody service for institutions in the U.S.
   This week, Crypto.com introduced a new solution in the U.S. focusing on cryptocurrency custody. With the acquisition of a charter, the company can now cater to wealthy clients or institutions in the U.S. and Canada for the custody of their crypto assets. More broadly, this will also impact local platform users, whose assets will be transferred to this new entity.

2. Aave protocol considers leaving the Polygon blockchain
   A potentially “bold” initiative on Polygon to generate returns through immobilized stablecoins has divided Aave’s decentralized autonomous organization (DAO) in recent days. The discord has grown to the point that the protocol is seriously considering separating from the blockchain.

3. Crypto.com is launching a prediction market, inspired by the success of platforms like Polymarket and Kalshi during the U.S. election season. Polymarket alone processed $3 billion in election bets and $1 billion in Super Bowl wagers. Crypto.com, one of the fastest-growing crypto exchanges, processed $250 billion in transactions in December. It ranks as the second-most active exchange by trading volume, following Binance. The move highlights Crypto.com's ambition to expand its market offerings.

4. Binance and Kraken's venture arms led a $10 million Series A funding round for Usual, a stablecoin startup founded by ex-French politician Pierre Person. Launched in early 2024, Usual's compliant stablecoin, USD0, is backed 1:1 by real-world assets like U.S. Treasurys and shares yields with governance token holders. USD0 recently surpassed a $1 billion market cap and is approaching $1.5 billion, making it the seventh-largest stablecoin by market cap. It is also the sixth most-traded stablecoin by volume, reflecting its rapid growth and market adoption.

5. AI agent project ai16z, distinct from the VC firm, is exploring tokenomics adjustments and a potential Layer 1 blockchain for AI applications. In Q1 2025, it plans to launch a token-based platform for deploying AI projects. The ai16z token, currently valued at a $1.4 billion market cap, provides governance rights and utility within its ecosystem. The platform's Eliza framework, built in TypeScript, supports AI agent development with a collaborative open-source focus. Ai16z currently operates on the Solana blockchain.

Disclaimer: The information disclosed here does not constitute an investment advice ; it is for informational purposes only and does not constitute investment advice. You should do your own research while investing in crypto and only invest money you are ready to lose.