Ethereum's big day

July 23, 2024

Reading time: 5 minutes

U.S. government sells seized Bitcoin as part of DOJ’s forfeiture plan

Key points:

  • U.S. government transfers seized Bitcoin ($4 million worth) to Coinbase.

  • Funds were originally obtained from Ryan Farace in connection with dark web drug sales.

News - The U.S. government transferred nearly $4 million worth of Bitcoin to cryptocurrency exchange Coinbase on Monday. This move comes after the Department of Justice seized the funds from Ryan Farace in 2018 for selling illegal drugs on the dark web.

The transferred amount, 58.742 BTC, originated from an address linked to the U.S. government and identified as "U.S. Government: Ryan Farace Seized Funds."

The Justice Department recovered the Bitcoin from Ryan and his father, Joseph Farace, who was convicted of laundering the proceeds.

What’s more? This recent transfer potentially represents the start of the government's plan to liquidate the seized Bitcoin, announced in January. However, with a total daily trading volume of over $35 billion, the sale is unlikely to significantly impact the Bitcoin price.

For comparison, the recent sale of nearly 50,000 BTC by the German state of Saxony caused a drop in Bitcoin's value. Unlike the large German sale, the U.S. government transfer represents less than 1% of the daily trading volume.

Spot Ether ETFs set to go live today; could drive significant price movements

Key points:

  • Spot Ether ETF launch could impact ETH price in the short term.

  • Uncertainty surrounds long-term impact due to potential underwhelming demand.

News - The launch of spot Ether ETFs in the U.S. today could significantly impact the price of Ether in the coming days, according to crypto analytics firm Kaiko. However, analysts are divided on the long-term effect of these ETFs.

Kaiko warns that the price might be sensitive to initial investment flows, unlike the underwhelming demand seen for futures-based ETH ETFs launched late last year.

The firm expects potential outflows from Grayscale's Ethereum Trust (ETHE) as investors seek to convert their shares to a more easily tradable spot ETF.

While spot Bitcoin ETFs significantly boosted Bitcoin's price, analysts are unsure if Ether ETFs will achieve similar success.

Crypto market maker Wintermute predicts lower-than-anticipated demand for Ether ETFs, with total first-year inflows reaching only 10-12% of what Bitcoin ETFs might attract. This could limit the price increase of ETH to around 24% by year-end, according to Wintermute.

However, boutique crypto asset firm ASXN offers a more bullish outlook, with projections of average monthly inflows between $800 million and $1.2 billion into Ether ETFs.

India's Finance Minister ignores crypto industry’s call for TDS reduction

Key points:

  • India’s Finance Minister did not alter current crypto tax rules in the 2024-2025 budget.

  • The crypto industry requested a significant reduction in the TDS rate and changes to the tax structure.

News - In her budget address for the fiscal year 2024-2025, India's Finance Minister Nirmala Sitharaman announced that existing cryptocurrency tax rules would remain unchanged.

The crypto industry had been advocating for a reduction in the tax-deducted-at-source (TDS) rate on crypto transactions from 1% to 0.01%.

Industry representatives had presented various studies and evidence to support this request, arguing that the current rate hampers the sector’s growth.

More details - Additionally, they called for a shift from a flat 30% tax rate on gains to a progressive tax system and the ability to offset losses against gains. They also sought the establishment of a multi-agency regulatory framework for the industry.

This budget announcement marks the first since Prime Minister Narendra Modi's re-election for a third term. However, Modi’s Bharatiya Janata Party (BJP) did not achieve a majority in the recent elections, leading to the formation of a coalition government.

Altcoin season delays as Bitcoin's dominance increases significantly

Key points:

  • Altcoin season seems unlikely due to rising Bitcoin dominance and stagnant altcoin prices.

  • The Average Directional Index (ADX) suggests a weakening uptrend in the altcoin market.

News - The arrival of an altcoin season, a period of strong performance for alternative cryptocurrencies, appears increasingly unlikely due to current market conditions.

Bitcoin's dominance is rising as its price climbs, while liquidity remains low in the broader market. This is causing altcoin prices to stagnate.

Weakening uptrend - Analysts are citing a weakening uptrend in the altcoin market based on the Average Directional Index (ADX). The ADX is approaching a key level, below which it would signal a lack of momentum and potentially dampen investors’ confidence.

The lack of growth across most altcoins is a worrying sign. Only a handful, like Toncoin and PEPE, have managed significant gains recently. This stagnation could lead to increased volatility and uncertainty in the market.

Well, Bitcoin's recent price surge has pushed its dominance to over 55%. A technical indicator suggests a further rise to nearly 57% is possible, further squeezing the potential for an altcoin season.

Did you know?

  • Most NFTs are worthless, and amount to mere pennies. There are only a handful that get valued in millions, likely those that celebrities have endorsed, case in point Justin Bieber. Well, NFTs like Bored Ape derive their worth from being scarce, valuable, and have a high barrier of entry for holders, similar to a traditional art house.

  • Contrary to popular opinion, Satoshi Nakamoto didn’t invent blockchain or cryptography. The individual or group behind Bitcoin chose this name for its meaning in Japanese - “wisdom”, “reason”, and “careless one.” The identity of Satoshi is not known, and it has been speculated that he may be Dr. Craig Wright, an Australian academic and businessman.

  • According to the “2023 Global Bitcoin Ownership Overview” by CoinShares, Bitcoin ownership has reached 106 million as of 2023, and around 400,000 individuals trade it daily. The way traders use Bitcoin varies: nearly 40% of them hold onto their coins as long-term investments instead of selling, while 11% utilize Bitcoin for making payments for goods and services. 22% of users engage in lending or staking.

Top 3 coins of the day

Worldcoin (WLD)

Key points:

  • The token unlock event for early investors and team members is set to start on 24 July.

  • The market anticipates a potential influx of supply.

What you should know - Worldcoin has experienced significant volatility in recent months. After peaking at $11.68 on 11 March, the coin has plunged by 79.48%. Since hitting a local low of $1.772 on 12 July, it has rebounded by 37.31%, trading at $2.36 currently. Despite this recovery, WLD has faced a 3.38% decline in the last 24 hours. To challenge the $4.25 resistance level, buying pressure will need to intensify. Presently, the Relative Strength Index (RSI) is at 46.59, indicating a neutral market sentiment. The overall trend remains bearish, suggesting cautious optimism for potential upward movement.

Shiba Inu (SHIB)

Key points:

  • SHIB has underperformed relative to other meme coins.

  • The token’s NVT (Network Value to Transactions) ratio has increased.

What you should know - Shiba Inu has shown signs of recovery after dropping to a low of $0.00001266. Over the past 18 days, it has surged by 41%, indicating a strong rebound. If the bullish momentum persists, SHIB is expected to encounter resistance within the $0.00002293 to $0.00002529 range. This zone could prove challenging as it may act as a significant hurdle for further gains. Additionally, the doji candlestick formation on the daily chart reflects market indecision, suggesting that traders are currently uncertain about the next direction. This uncertainty could impact short-term price movements and create a volatile trading environment.

Aptos (APT)

Key points:

  • At the time of writing, APT was trading at $7.32.

  • It was up by 8% over the last seven days.

What you should know - Aptos has experienced a significant decline, plummeting 72.70% from a high of $19.37 on 26 March to a low of $5.16 on 5 July. Currently, APT is facing a strong resistance at $10.25, which may pose challenges for upward movement. On the downside, $5.45 is identified as a support level with substantial liquidity, offering a potential cushion against further declines. The MACD and signal line are both positioned at the neutral line, indicating a lack of clear direction for future price movements.

How was today's newsletter?

Login or Subscribe to participate in polls.