Cardano's tug of war

January 09, 2024

 

Reading time: 7 minutes

Bitcoin investors amp up holdings amid ETF optimism and upcoming halving

Key points:

  • Bitcoin saw a remarkable increase of 2922% between the 2016 halving and its 2017 peak

  • Similarly, between the 2020 halving and its all-time high in November 2021, the leading crypto recorded an impressive 654% growth

News - As enthusiasm for the first-ever spot exchange-traded funds (ETFs) in the U.S grows, Bitcoin has an additional positive factor to look forward to in 2024 — the upcoming halving event in April. 

This four-yearly event reduces miners' block rewards by half, decreasing the number of tokens in circulation and potentially increasing demand for the limited supply.

What to expect - Looking at historical trends, instances of these events have preceded periods of significant returns. A CryptoQuant analyst pointed out instances in Bitcoin's history where the cyclical event had a significant impact. In recent years, the king coin surged by 1263% between the 2016 and 2020 halvings. Going further back, there was a remarkable 5187% increase during the 2012-2016 phase.

Investor insights - Popular crypto analyst Kashif Raza recently shared that investors are holding more Bitcoin than the fresh supply mined in a month. This shift in strategy is likely driven by the prospect of Bitcoin scarcity and the challenge of repurchasing once sold, particularly in the lead-up to the halving.

Binance developers to sunset Beacon Chain tokens, transition to single blockchain

Key points:

  • Until now, the BNB BEP-2 has served as the designated currency to cover gas fees in ecosystem transactions for Binance's native token, BNB

  • Meanwhile, BEP-20 tokens share similarities with ERC-20 tokens as they incorporate smart contract functionality 

News - The creators of Binance's BNB Smart Chain are working towards combining the BNB Beacon Chain (BEP-2) and BNB Smart Chain (BEP-20) into a singular blockchain.

What this means - With the tentative deadline for the BNB Chain Fusion set for April 2024, Binance has advised users to transfer their BEP-2 and BEP-8 tokens to the BEP-20 chain, ensuring a 1:1 asset preservation ratio. The transfer can be executed through exchanges, the BNB Chain Wallet, and other self-custody wallets. 

For users who miss the deadline, there will still be an option to bridge their assets using a legacy feature. However, the recovery process for BEP-2 assets post-fusion may take up to seven days and is command-line-based, lacking a graphical user interface. It is also important to note that BEP-2 tokens issued without cross-chain support won't be eligible for recovery after the fusion.

Why was this decision taken? The rapid advancement of BSC has rendered the Beacon Chain a hindrance, developers stated, highlighting that the existing dual-chain setup hampers development iteration due to continuous bridging requirements and exposes BNB to security risks.

ADA struggles with price decline despite Cardano's dev activity boom

Key points:

  • At press time, ADA was priced at $0.48, with a 8% decline in its value over the past 24 hours

  • Nevertheless, the token continued to witness significant whale activity, as indicated by an upward trend in its whale transaction count graph

News - On 7 January, Cardano Feed highlighted a notable accomplishment for the blockchain in a post on X, revealing an almost 250% surge in Cardano's development activity within the last 30 days.

Current state of the blockchain - AMBCrypto's analysis revealed a notable increase in the token's dev. activity contributor count in addition to the significant spike in ADA's development activity over the past week. Elevated development activity is commonly interpreted as a positive indicator, reflecting developers' efforts to enhance the blockchain.

What about ADA? Despite the substantial surge in Cardano's development activity, its native token ADA experienced a significant downtrend, plummeting by more than 18% over the last seven days, according to CoinMarketCap. The prevailing bearish sentiment surrounding the token was further emphasized by a dip in its Weighted Sentiment. 

However, a decline in ADA's Open Interest  pointed towards an optimistic outlook, indicating the potential for a positive trend reversal. Historical patterns suggest that a drop in Open Interest is often followed by a shift in the market.

North Korean hackers Lazarus Group resurfaces with $1M Bitcoin transfer

Key points:

  • In March 2022, the Lazarus Group allegedly pulled off the biggest hack in crypto history, stealing over $600 million worth of ETH and USDC from Axie Infinity's Ronin Bridge

  • The infamous group reportedly uses creative tactics, including fake job offers and assuming the identities of well-known venture capitalists, to gain access to its targets

News - After weeks of inactivity, North Korean hackers Lazarus Group transferred more than $1 million worth of Bitcoin on 8 January.

Decrypting the deets - As per blockchain analysts Arkham Intelligence, the Lazarus Group utilized a cryptocurrency mixer for two transfers, moving a total of 27.371 BTC valued at $1.2 million. Following this, the group sent 3.343 BTC, worth $150,582, to an inactive address they had used before.

Following the transactions, Arkham Intelligence revealed a $79 million balance in the Lazarus Group portfolio. Although the transfers don't signify anything specific, they could imply preparations for heightened activity.

For context - Allegedly sponsored by the North Korean government, the Lazarus Group has been accused of carrying out approximately one-third of all crypto hacks in 2023, accumulating profits of up to $700 million in that year.

Having reportedly stolen around $3 billion between 2017 and 2023, the group's activities have also triggered responses from the United States Treasury Department's Office of Foreign Assets Control (OFAC).

Did you know?

  • One Bitcoin transaction’s carbon footprint is equivalent to more than 762,000 Visa transactions, according to Digiconomist.

  • The difficulties of tax reporting and the controversy surrounding crypto have resulted in digital assets being entirely banned in ten countries: Algeria, Bolivia, Bangladesh, Dominican Republic, Ghana, Nepal, North Macedonia, Qatar, Saudi Arabia and Vanuatu.

  • Surprisingly, the concept of cryptocurrencies can be traced back to the 1980s. The idea of untraceable peer-to-peer digital money was first proposed by an American IT named David Chaum in 1983 — long before the creation of Bitcoin.

Top 3 coins of the day

Polkadot (DOT)

  • As of the 7th of January, DOT had a total issuance of over 1.3 billion, out of which more than 52% were blocked in staking, reflecting strong community support

  • As per Santiment's data, the token's Social Volume remained relatively high throughout the last week, suggesting heightened interest

What you should know - According to CoinMarketCap, DOT was down by more than 14.5% in the last seven days. The token witnessed a massive sell-off near the $8.8 mark. Soon after that, another sell-off spree began near $8.6, causing a price correction. At the time of writing, DOT was trading at $7.31 with a market cap exceeding $8.6 billion. Having gained 2.1% in the last 24 hours, the crypto hinted at a potential bearish trend reversal, a sentiment supported by the RSI standing at 47 and showing signs of weakening bearish momentum.

  • According to Lookonchain, 12 new wallets possibly belonging to an institution accumulated LINK worth  $17.5 million over the weekend

  • The number of LINK holders increased from 699,710 on 1 December 2023, to 711,000 at press time, indicating a bullish sentiment

What you should know - Despite the bullish sentiment around Chainlink, its value has decreased in the last 24 hours. At press time, LINK changed hands at $13.67, representing a 0.5% decrease within the said period. The Awesome Oscillator showed signs of bears gathering increasing momentum by flashing red signal bars below the half line. Currently, the token is moving sideways between $16.9 and $12.9. This price range marks a critical phase in Chainlink’s market trajectory, with bearish influences seemingly gaining the upper hand.

Polygon (MATIC)

  • NFT sales worth more than $36 million were recorded on Polygon PoS in the last week

  • Meanwhile, MATIC plunged nearly 20% over the last seven days, according to CoinMarketCap’s data

What you should know - MATIC, after an increase of 0.4% in 24 hours, was changing hands at $0.80. If MATIC sustains a price above the $0.0800 support level, there's the potential for momentum to grow, possibly leading to a test of resistance at $0.9600. Holding this level could set the stage for further gains, reaching up to the $1.0000 mark, where it could encounter psychological resistance. However, the RSI was seen moving steadily below the 50-mark, indicated ngthat average losses had surpassed average gains.

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