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 total liquidation across the network was $150 million, including $122 million in long liquidations and $28.45 million in short liquidations.
Robert Kiyosaki stated that BlackRock, led by Larry Fink, is currently selling off a large amount of Bitcoin and driving its price down to below $100,000 to buy it at a lower price. Therefore, he advises not to invest in BTC through BlackRock's ETF, but to advocate for direct investment models, stating, 'I prefer Bitcoin in my own wallet; I don't trust the Bitcoin in BlackRock's ETF.'
I strongly agree with Kiyosaki's view, as BTC fell while ETH did not, which clearly indicates that someone is suppressing prices for accumulation.
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 of the white paper to optimization and stability improvement to better meet market demands. Technically, Polkadot has made significant progress in 2024, with the ecosystem, such as the Mythical Game project, pushing towards extreme performance. At the same time, Gavin proposed a Proof-of-Personhood mechanism aimed at addressing the threat of generative AI to the free world, providing a trusted identity solution through the combination of ZK technology, which is planned for release in 2025.
3) Paolo Ardoino, CEO of Tether, retweeted a post by the co-founder of weRate and CEO of JAN3 on platform X, mentioning that there is a lot of 'FUD information' about 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 6-18 months, and some exchanges are waiting for clear information.
While USDT is facing FUD, Tether's net profit this year exceeded $10 billion, 'stimulating' multiple banks worldwide to enter 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, with a pilot scheduled for 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 released Bitcoin Tracker-related information for the eighth consecutive week. However, this time is different from before; he stated, 'The blue line on the website is disturbing.' (Note: Each time MicroStrategy buys BTC, a green dot is marked on the corresponding date on the website, while the BTC price trend line is in blue.) According to previous patterns, MicroStrategy usually increases its Bitcoin holdings the day after the relevant news is released.
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. In addition, the on-chain value of RWA assets once exceeded $15 billion, currently standing at $14.8 billion.
2) As of December 27, U.S. Bitcoin spot ETF accumulated an increase of 49,591 BTC this month, currently the sixth highest month for accumulation this year.
Currently, BlackRock's IBIT holds 552,555 BTC, which is 2.67 times the holding amount of Grayscale's GBTC (206,860 BTC).
3) The nominal value of the total open interest in BTC options across the network is $25.08 billion; the nominal value of the total open interest in ETH options is $6.37 billion, a sharp decline compared to two days ago.
(Indicators are more sensitive than contracts)
In December, the overall market value of Memecoins 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 value of memecoins was $120.14 billion. On December 9, this figure rose to $137.06 billion, before falling to a low of $92.67 billion on December 23. This means that the market value declined by 32.38% during the month. The current market value is about $98.78 billion, down approximately 14.61% from the beginning of the month.
5) The difficulty of Bitcoin mining is set to adjust at block height 876,960 (December 30, 2024, 5:55:37), with an increase of 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 and IRS issued the final 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 narrow the tax gap. The new rules clearly define the scope of brokers, covering various service providers in cryptocurrency trading, especially 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 compilation, all DeFi brokers in the future must submit information reports to the IRS (such as Form 1099-B), which should include the following content:
- Total transaction income: the total revenue amount from digital asset transactions.
- Information of both parties in the transaction: including basic information such as identity and address.
- Transaction details: Record the asset transfer price and underlying cost.
Expansion of the broker definition
The new regulations clarify the definition of brokers, including individuals and organizations that provide services for digital asset transactions, including but not limited to:
- Transaction matching service providers
- Market makers
- Order matching service providers
- Companies that provide custody or similar custody services
Especially in the DeFi space, intermediaries participating in digital asset transactions, such as major entry websites or front-end service providers involved in digital asset transfers, will also be considered brokers.
Exceptions clause
The following categories are not subject to broker reporting obligations:
- Participants who are only responsible for verifying transactions (such as validators).
- Vendors that only provide hardware or software to manage digital asset private keys.
- Other participants who are not directly involved in transaction facilitation or do not have knowledge of transaction details.
The cryptocurrency industry rebounds, or there may be room for adjustment
After the release of the new regulations, there was widespread criticism within the cryptocurrency industry. Some people believe that the requirement for 'DeFi to have KYC' is unrealistic. Galaxy Digital's research director Alex Thorn pointed out last year that the DeFi industry may face three choices in the future:
- Comply with IRS reporting requirements and accept broker status.
- Preventing U.S. users from using their services.
- Abandon upgrades and income generation for smart contracts.
If DeFi applications do not provide front-end websites, do not support upgrades, and do not charge transaction fees, they may avoid being classified as brokers. In other words, extremely decentralized applications cannot meet the broker reporting requirements due to the inability to obtain relevant information.
Despite the new rules being finalized, there are still variables in their implementation. The new rules may face congressional review, especially after the inauguration of new congressional members, as Congress has the authority to re-examine or veto the regulation. Earlier this year, Congress vetoed the SAB 121 rule regarding digital asset accounting. Consensys lawyer Bill Hughes criticized the timing of the new rules' release on social platform X and explained:
- Lawsuits are expected to be filed claiming that the regulation exceeds the authority of the Treasury Department, violating the Administrative Procedure Act (APA).
- The rules may enter the congressional review stage, at which point Congress may veto the regulation, similar to the treatment of SAB 121.
The outgoing government has not left quietly; this game is still ongoing. If you still feel confused and don't know where to start in this market, like and comment, and I will guide you through the entire bull market.
