I. Today's major events
1. BTC fell below 94,000 USDT this morning, with a 24-hour decline of 0.55%. Coinglass data shows that in the past 24 hours, a total of $150 million was liquidated across the network, including $122 million in long positions and $28.45 million in short positions.
Robert Kiyosaki stated that under Larry Fink's leadership, BlackRock is currently selling off a large amount of Bitcoin and driving its price down to below $100,000 in order to buy at a lower price, thus advising against investing in BTC through BlackRock's ETF and advocating for direct investment models, stating, "I prefer to have Bitcoin in my own wallet; I do not trust the Bitcoin in BlackRock's ETF."
I resonate with Kiyosaki's viewpoint, as BTC is falling while 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, with its core goals shifting from achieving the product objectives of the white paper to optimizing and enhancing stability to better meet market demands. In terms of technology, Polkadot made significant progress in 2024, with ecological advancements such as the Mythical Game project pushing performance to the limits. Additionally, Gavin proposed the Proof-of-Personhood mechanism to address the threats posed by generative AI to the free world, aiming to provide a trusted identity solution by combining ZK technology, with plans to launch in 2025.
3. Tether CEO Paolo Ardoino retweeted a post from the co-founder of weRate and CEO of JAN3 on platform X, mentioning that there is currently 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. The MiCA regulations need to be adhered to, 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 exceeds $10 billion, "stimulating" several 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's 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, having 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 experimental projects.
4. MicroStrategy founder Michael Saylor released Bitcoin Tracker-related information for the eighth consecutive week. However, this time he stated, "The blue line on the website is disturbing." (Note: Previously, after each purchase of BTC by MicroStrategy, the website would mark a green dot on the corresponding date, while the BTC price trend line was blue.) According to past patterns, MicroStrategy always increases its Bitcoin holdings the day after related 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. Additionally, the on-chain value of RWA assets once exceeded $15 billion, currently at $14.8 billion.
2. As of December 27, the U.S. Bitcoin spot ETF has accumulated an increase of 49,591 BTC this month, currently the sixth highest monthly increase of the year.
Currently, BlackRock IBIT holds 552,555 BTC, which is 2.67 times the holding amount of Grayscale GBTC (206,860 BTC).
3. The notional value of open positions in BTC options across the network is $25.08 billion; the notional value of open positions in ETH options is $6.37 billion, a sharp decline compared to two days ago. (Indicators are more sensitive than contracts)
4. In December, the overall market value of Memecoins dropped by about 30%, indicating that the momentum and demand for meme-based tokens have slowed down. 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 dropping to a low of $92.67 billion on December 23. This means that the market value decreased by 32.38% that month. The current market value is approximately $98.78 billion, down about 14.61% from the beginning of the month.
5. The mining difficulty of Bitcoin faced 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 hash rate is 781.07 EH/s.
III. Industry-related knowledge
The U.S. Department of the Treasury and the IRS released the final regulation last Friday (27th), which will require "decentralized finance (DeFi) brokers" to report the total income from digital asset sales starting January 1, 2027, in order to strengthen tax compliance and reduce the tax gap. The new regulations clearly define the scope of brokers, encompassing various service providers in cryptocurrency trading, especially refining the tax reporting obligations of DeFi participants. DeFi Broker New Regulations: Obligations, Scope, and Exception Analysis Broker Information Reporting Obligations
According to KOL Ni Da's summary, all future DeFi brokers are required to submit information reports to the IRS (e.g., Form 1099-B), and the reports should include the following:
- Total trading revenue: the total income amount from digital asset trading.
- Information of the trading parties: including basic information such as identity, address, etc.
- Transaction details: Record the asset transfer price and underlying costs.
- Expansion of the definition of brokers
- The new regulations clarify the definition of brokers, including individuals and organizations providing services for digital asset trading, including but not limited to:
- Transaction matching service providers
- Market makers
- Order matching service providers
- Enterprises providing custody or similar custody services
Especially in the DeFi field, 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 clause
The following categories are not within the reporting obligations of brokers:
- Participants who are only responsible for verifying transactions (e.g., validators).
- Vendors that only provide hardware or software to manage digital asset private keys.
- Other participants who do not directly engage in transaction facilitation or do not have details of the transactions.
- The crypto industry is rebounding, but there may be room for adjustment
After the new regulations were released, widespread criticism arose 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 last year that the DeFi industry might face three choices in the future:
- Comply with IRS reporting requirements and accept the identity of brokers.
- Preventing U.S. users from using their services.
- Abandoning upgrades to smart contracts and revenue generation.
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 obtain the relevant information and therefore cannot meet the reporting requirements for brokers.
Although the new rules have been finalized, their implementation still has uncertainties. The new regulations may face congressional review, especially after the inauguration of new congressional members, as Congress has the authority to re-examine or veto the regulations. Earlier this year, Congress vetoed the SAB 121 rules concerning digital asset accounting. Consensys lawyer Bill Hughes criticized the timing of the new regulations' release on social media platform X and explained:
- Lawsuits are expected to allege that the regulations exceed the Treasury's authority, violating the Administrative Procedure Act (APA).
- The rules may enter the congressional review phase, at which point Congress may veto the regulation, similar to the handling of SAB 121.
The outgoing government has not left quietly; this game continues. If you still feel confused and don't know how to approach this market, like, comment, and I'll guide you through the entire bull market layout.
