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• Bitcoin’s 60% year-to-date surge in value may point to a bull market ahead.
• The two-year “Z-score” for miner revenue from fees has turned positive after a long time.
• This suggests miners’ revenue from transaction fees is deviating higher from the two-year mean in a sign of increased network demand.

Bitcoin Miners’ Revenue From Fees Rises

The Bitcoin (BTC) network’s recent 60% year-to-date surge in value may be pointing to a major bull run, as miner revenues from fees have risen to suggest an onset of new waves of adoption. According to data source Glassnode, the two-year “Z-score” for miner revenue from fees has turned positive after a long time, signaling increased network demand and higher fees than usual.

What is the Z Score?

The Z score measures the number of standard deviations from the two-year mean fee revenue. It is usually positive and rising during bull runs and negative during bear runs. During this period, Bitcoin miners are solving complex algorithms which require resources and energy, with their reward coming in both block rewards and transaction fees.

Indicator Suggests Return of High Fees

According to Glassnode’s lead analyst James Check, the indicator turning positive indicates a return of high fees which often coincides with new waves of adoption on the Bitcoin network.”Bolstered by a new demand from Ordinals and Inscriptions, the 2yr Z Score for miner revenue from fees has turned positive,” Check said in his weekly market update.”Elevated fee pressure is a common precursor to more constructive markets, coincident with new waves of adoption, expressed via increasing demand for blockspace,” he added.

Increased Network Demand

The increasing miner revenues from transaction fees points towards increased network demand as it suggests that more users are now willing to pay higher transaction costs than before – particularly Ordinals who want their transactions processed quickly on the blockchain – resulting in an increase in overall fee pressure on the network. This could potentially lead to further price appreciation if this trend continues into 2021 and beyond.

Historically Proven Precedent

Historically speaking, this phenomenon has proven itself as being an indicator that precedes major bull runs – so investors should keep an eye out for signs that this could be signalling one again as we move forward through 2021. With more people than ever before looking at cryptocurrencies as potential investments or hedges against inflation due to macroeconomic uncertainty around traditional assets such as stocks or bonds, there is certainly plenty of potential here for significant gains over time if things go according to plan.

• The U.S. government is currently backing the USDC stablecoin, with Circle keeping around a quarter of USDC’s reserve assets at about six banks.
• Circle CEO Jeremy Allaire discussed emergency measures taken and game theorizing for secure deposits.
• BitMEX co-founder Arthur Hayes has proposed NakaDollar (NUSD), a stablecoin backed by bitcoin and derivatives that could be deeply liquid and attractive to traders.

Banking Crisis Spurs Stablecoin Experimentation

The banking crisis has provided a unique opportunity for experimentation within the world of stablecoins. The U.S. Treasury Department, Federal Reserve, and FDIC have all announced plans to backstop all deposits at two failed banks in order to secure 8% of the collateral for the USDC stablecoin – an initiative led by Circle, which keeps around a quarter of USDC’s reserve assets at about six banks worldwide. Meanwhile, BitMEX co-founder Arthur Hayes has proposed NakaDollar (NUSD), a stablecoin backed by bitcoin (BTC) and derivatives – an idea which could revolutionize how crypto exchanges handle liquidity and provide stability if accepted and used by investors.

Circle’s Emergency Measures & Game Theorizing

Circle CEO Jeremy Allaire spoke about some of the emergency measures his company took amid the banking crisis as well as serious game theorizing Circle has played over the past two years to spread out its cash reserves in order to eventually create “straight-through government obligation money.” As Allaire explained on the “Bankless” episode: “We moved very quickly…we started moving funds out of certain institutions into other institutions…we were attempting to diversify where our reserves were held.” This effort was part of their larger goal to eventually achieve trustless financial infrastructure through blockchain technology that is completely secure from any external forces or failures in traditional banking systems.

Enter NakaDollar

BitMEX co-founder Arthur Hayes recently proposed NakaDollar (NUSD), a revolutionary new kind of stablecoin backed by both Bitcoin (BTC) and Bitcoin derivatives – an idea which could potentially become deeply liquid and attractive to traders if accepted and used by investors across different crypto exchanges worldwide. According to “The Hash” panel discussion about this proposal, there is still much more work that needs to be done before it can become reality – but it does open up interesting pathways for exploring alternative models for collateralizing stablecoins in uncertain times like these when traditional banking systems are failing us left and right .

Stablecoin Market Outlook

Although there are still many unknowns surrounding this ever-evolving world of digital money, one thing is certain: we are witnessing unprecedented experimentation with regards to how we use cryptocurrency as collateralized money – particularly during times like these when traditional banking systems are in turmoil due to government bailouts or other unforeseen events such as natural disasters or pandemics like COVID-19. It will be interesting to see what kinds of innovations arise from these experiments over time, especially since they have already paved way for some exciting possibilities such as BitMEX’s NakaDollar proposal .

Conclusion

To conclude, while there may be many unknowns regarding digital money moving forward due to ongoing experimentation within this space, it’s clear that we live in exciting times where innovative solutions such as BitMEX’s NakaDollar proposal can help us explore alternative models for collateralizing stablecoins even during turbulent times caused by economic downturns or crises – ultimately paving way towards greater financial security in future generations through blockchain technology .

• Blockchain.com is suspending operations of its recently launched asset management arm due to the prolonged crypto winter.
• The business was launched just 11 months ago, in April 2022 but has been affected by the downturn in the crypto market.
• In January, Blockchain.com announced it was laying off 28% of its workforce due to these challenges.

FinanceBlockchain.com Pauses Asset Management Arm

FinanceBlockchain.com, a crypto financial services company, has decided to suspend operations of its recently launched asset management arm due to the prolonged crypto winter. The business was launched just 11 months ago in April 2022 and had been affected by the downturn in the crypto market and other challenges that have arisen since then.

Reason for Suspension

The company’s spokesperson stated that they made this decision because macroeconomic conditions had deteriorated rapidly since their launch, leading them to pause operating this institutional product as a result of these challenging times for the cryptocurrency industry.

Layoffs Announced in January

In January 2021, Blockchain.com announced that it would be letting go 28% of its workforce due to issues arising from these difficult market conditions and an overall lack of growth within the industry during this time period.

Aims To Attract Institutional Investors

BCAM (Blockchain Asset Management) was created with hopes to attract more institutional investors when it first opened up last year but unfortunately did not achieve this goal given current market conditions and other factors affecting investor sentiment towards cryptos at present time..

Conclusion

Ultimately, Blockchain’s decision serves as an example of how much impact the bearish markets can have on businesses operating within them- even those with such high ambitions like BCAM’s original goals were unachievable given current conditions within cryptocurrencies today..

• Swing, a cross-chain liquidity protocol, released a new “no-code” product that is designed to reduce the time needed to deploy and update decentralized applications across multiple blockchains.
• The product, Swing Platform, will be provided to developers at ETHDenver and will allow updates to configurations without changing the code.
• Chainalysis estimated that hacks and other thefts from cross-chain bridges cost $2 billion in the first eight months of 2022.

Swing Releases ‘No-Code’ Product for Speeding Up App Deployment

Benefits of Product

Swing Platform is designed to reduce the time needed to deploy and update decentralized applications across multiple blockchains. It allows developers to update configurations without having to change any code. This could prove invaluable in critical scenarios when it’s necessary to disable a particular token or bridge due to a security flaw.

Hacking on Cross-Chain Bridges

Cross-chain applications that straddle multiple blockchains are becoming more common, though the cross-chain “bridges” often used to move digital assets back and forth between different networks are frequently targeted by hackers. According to Chainalysis, a blockchain security firm, costs associated with hacks and thefts from cross-chain bridges amounted up to $2 billion during just the first eight months of 2022.

Swing Platform Application

Developers can use Swing Platform in order to quickly respond in case of a security incident or if something happened outside of ordinary working hours which requires nontechnical team members act fast. Viveik Vivekananthan, founder of Swing said: “Launching and maintaining a cross-chain application is generally fraught with risk and off-limits to all but the best-funded developer teams,” Swing founder Viveik Vivekananthan said in the press release.”Swin will make bridging much easier for projects at any stage.”

Conclusion

The release of Swing Platform marks an important step forward for making it easier for developers at any stage of their project lifecycle design efficient cross chain applications without sacrificing safety concerns related hacking attempts on these bridges

• Last week, a hacker exploited a bug in the Platypus Finance protocol to steal $9.2 million worth of digital assets.
• The protocol has since managed to recover $2.4 million of USDC stablecoins and Tether froze $1.5 million of stolen USDT.
• Platypus Finance has promised to repay users at least 63% of their funds.

Platypus Finance Suffers Major Hack

Last week, the Avalanche-based protocol Platypus Finance was hacked for $9M worth of digital assets. The exploit took advantage of a bug in the platform’s solvency check mechanism, leading to its native stablecoin USP being depegged from the dollar.

Recovery Efforts So Far

The protocol worked with crypto exchange Binance to identify and confirm the identity of the exploiter responsible for last week’s attack, who used a Binance account that had gone through know-your-customer checks for a withdrawal request. Additionally, blockchain security firm BlockSec recovered $2.4 million worth of USDC stablecoins while Tether froze $1.5 million worth or USDT tokens stolen from the hack. Furthermore, around $380K of stablecoins were mistakenly transferred to lending protocol Aave; however Platypus has submitted a proposal to Aave’s governance forum for release of those funds as well.

Repayment Plan

In light of these efforts, Platypus is planning on repaying at least 63% of user funds that were lost in the attack back to them – an unprecedented level given most protocols are unable to recover any funds after such hacks occur.

A Rampant Problem

The exploit on Platypus is another reminder that hacking continues to be one of crypto’s biggest problems and platforms need stronger security measures in order protect user assets better going forward.

Law Enforcement Involvement

Platypus contacted law enforcement and filed a complaint with authorities in France regarding this incident and is working with them towards resolving this situation further as well as pursuing legal action against those responsible for it..

• The TRU token, the governance token of decentralized lending protocol TrueFi, surged 220% in an hour on Thursday.
• The rally appears to be from traders mistakenly connecting it with TUSD, a stablecoin that had been issued by TrueFi in the past but no longer is.
• Binance minted $50 million of TrueUSD (TUSD) stablecoin, sparking speculation among traders about TUSD potentially gaining a larger role in trading on Binance.

TRU Token Rallies Over 200%

The TRU token, the governance token of decentralized lending protocol TrueFi, surged 220% in an hour on Thursday. This rally appears to come from traders mistakenly connecting TRU with TUSD, a stablecoin that had been issued by TrueFi in the past but no longer is.

Binance’s TUSD Mint Sparks Speculation

Binance, the world’s largest crypto exchange by volume, minted $50 million of TrueUSD (TUSD) stablecoin earlier this week which sparked speculation among crypto traders about TUSD potentially gaining a larger role in trading on Binance after the regulatory crackdown on the Paxos-issued Binance USD (BUSD).

TrustToken and TrueFi Separation

TrustToken sold TUSD in 2020 to a firm called Techteryx which is an Asia-based conglomerate with businesses … in traditional real estate, entertainment, environmental and information technology industries. TrustToken also separated from the TrueFi protocol and was renamed Archblock last year as TrueFi embarked on a road to decentralize the platform.

TRU Surge

TRU surged as high as 14.6 cents from 4.4 cents on Binance before later paring some of the gains. The token was trading at around 11 cents at press time.

Conclusion

In conclusion, it appears that speculation surrounding TRU rallying over 200% came from traders mistakenly connecting it with TUSD; however since TrustToken separated from Truefi last year this speculation appears to have been misplaced due to them being two different entities now. Despite this TRU still saw impressive gains before paring back some losses at press time

• The U.S. Internal Revenue Service (IRS) has filed a court petition to enforce its summons against the Kraken crypto exchange and its subsidiaries.
• Kraken recently settled Securities and Exchange Commission (SEC) charges it offered unregistered securities through its staking-as-a-service program and will pay $30 million in fines.
• The IRS is looking to examine Kraken’s books and papers in order to determine the identity of U.S. customers who conducted transactions in cryptocurrency for the years ended December 31, 2020, 2021, 2022, and 2023.

IRS Takes Aim at Kraken Crypto Exchange

The U.S. Internal Revenue Service (IRS) has filed a court petition seeking permission to enforce a summons for information against the Kraken crypto exchange and its subsidiaries. The IRS first issued a summons in 2021 but so far, Kraken has failed to comply with the request for documents related to customer identity and their cryptocurrency related transactions from 2020 – 2023.

Kraken Fined by SEC

Kraken recently announced it would pay $30 million in fines as part of settling Securities and Exchange Commission (SEC) charges that it had offered unregistered securities through its staking-as-a-service program for U.S customers, which will be immediately discontinued following the settlement agreement with the SEC..

What Information Is The IRS Seeking?

The IRS is looking to examine Kraken’s books and papers in order to determine the identity of U.S customers who conducted transactions in cryptocurrency during the years ending December 31st of 2020 – 2023 as well as their correct federal income tax liability associated with these activities during this time period..

Implications For Crypto Regulation

CoinDesk Global Policy & Regulation Managing Editor Nikhilesh De discussed some of the wider implications that come along with this action taken by the IRS including increased scrutiny on cryptocurrency exchanges when it comes to compliance with laws related to money laundering and other financial crimes..

Final Thoughts

This recent move by the IRS shows increased enforcement efforts concerning digital assets are likely here to stay moving forward into 2021 & beyond as regulation surrounding cryptocurrencies continues to evolve around jurisdictions all across America & elsewhere around world..

• Crypto startups only raised $548 million in January, a 91% drop from January 2022.
• The FTX collapse likely played a role in the decrease in venture capital investments.
• Most of the January 2023 deals were early-stage companies and CeFi investments dropped off significantly.

Crypto Winter Led to Significant Investment Decline

A CoinDesk analysis shows crypto startups only raised $548 million last month, a 91% decrease from $6 billion in January 2022. The FTX failure’s full impact on industry fundraising is yet to be seen, as many transactions take months to close. Venture capital (VC) and other investments plummeted and most of the 2023 deals were for smaller companies.

FTX Collapse Impacted CeFi Investments

The collapse of FTX created doubts about centralized exchange (CeFi) models for trading crypto, resulting in 99% drop of CeFi deals to $22.8 million in January 2023. Many investors shifted their focus towards decentralized finance (DeFi) and decentralized exchanges (DEX). The coming months will reveal how much investment capital dried up after the FTX scandal came to light.

Blockstream Investment Was Sole Deal Exceeding $100 Million

January 2022 saw 17 investment rounds that exceeded $100 million, including the transaction that valued the now-collapsed FTX crypto exchange at $32 billion. An investment in Blockstream was the only deal that big a year later, highlighting just how much funding has decreased over time due to crypto winter conditions and market uncertainty.

Fundraising Deals Take Time To Finalize

Funding rounds can take months to finalize or close, meaning any drought resulting from the November FTX collapse might not even be fully reflected yet by last month’s low numbers. This suggests more caution may be needed when predicting future industry trends based on recent data points alone.

Conclusion

This data reveals just how much volatility exists within cryptocurrency markets and serves as a reminder that investors must remain cautious when investing in this space – especially during times of economic uncertainty such as we are currently experiencing with cryptocurrency winter conditions leading to significant declines across all metrics of venture capital investments for crypto startups

• A $10 million pay and bonus package for BlockFi staff was approved by New Jersey bankruptcy court Judge Michael Kaplan.
• The package is necessary to retain critical workers, argued counsel for BlockFi.
• The package applies to around 130 staff, and will be paid in three installments over a year.

The crypto lender BlockFi has been granted a $10 million pay and bonus package for its staff by New Jersey bankruptcy court Judge Michael Kaplan. This comes after court documents revealed executives from the crypto lender had received pay raises of as much as $275,000 each after the firm sought a bailout from crypto exchange FTX in June 2022.

BlockFi had requested the package in order to retain its critical workers, argued counsel for the firm, Rush Howell of law firm Kirkland & Ellis. “It’s essential that the debtors institute these retention programs to keep critical workers with the company,” he stated. The package would apply to around 130 staff, and would be paid in three installments over a year.

The package, which is worth $9.98 million, is seen as a way to secure value for former customers, which is why the judge approved it. Since BlockFi declared bankruptcy on Nov. 28, roughly 10% of staff had already left the firm. The pay and bonus package is seen as a way to incentivize and retain the staff that is still working for the firm.

The judge also noted that the package was an incentive for the staff to stay and work for BlockFi, as well as a way to reward them for the efforts they had already put in. The package is also seen as a way to attract and retain qualified individuals in the future and ensure that the company can continue to operate and move forward.

The package was obviously well received by the staff, who are now able to receive the much needed financial reward for the work they have been doing. It is likely to go some way in helping BlockFi to remain a viable and functioning company, which is what the judge was looking for when approving the package.

• Bitcoin surged 6% to trade at $22,300 while Ether was up 5% to $1,640.
• Crypto lending firm Genesis held $5.1 billion in liabilities in the weeks following its freeze on withdrawals in November.
• Genesis became the latest crypto firm caught up in the immediate fallout of FTX’s implosion, with three of its entities filing for Chapter 11 bankruptcy protection.

Cryptocurrency markets were burning red hot on Wednesday, with Bitcoin surging 6% to trade at $22,300. Ether was also trading up, by 5% to $1,640, while equities closed up.

The surge in activity came as crypto lending firm Genesis held $5.1 billion in liabilities in the weeks following its freeze on withdrawals in November. According to bankruptcy court documents signed by interim CEO Derar Islim, the run on the bank that followed the collapse of sister companies FTX and Alameda caused customers to demand Genesis repay $827 million in loans, leading the firm to freeze withdrawals.

In a first-day motion in the U.S. Bankruptcy Court for the Southern District of New York, Islim provided a breakdown of Genesis’ financial state heading into its restructuring. Genesis became the latest crypto firm caught up in the immediate fallout of FTX’s implosion, with three of its entities – Genesis HoldCo, Genesis Global Capital LLC and Genesis Asia Pacific PTE. LTD – filing for Chapter 11 bankruptcy protection late Thursday.

The filing came after a tumultuous few months for the firm, which froze loan repayments in November, citing liquidity issues. This caused a massive run on the bank, with customers demanding their funds back. The situation was further complicated by Genesis’ sudden closure of its Hong Kong offices in December, followed by its UK office in January.

Genesis had been one of the world’s largest crypto lenders, with an estimated $5 billion in loans outstanding. But the firm has been struggling since the pandemic began, with its customers increasingly becoming unable to repay their loans.

The filing is the latest sign of trouble in the crypto markets. Last month, FTX imploded, sparking a massive sell-off in the crypto markets as investors pulled their funds out of the exchange. The situation was further complicated after the US SEC accused FTX of running a fraudulent securities offering.

The market volatility and turmoil have put a spotlight on the risks associated with investing in crypto and digital assets. The SEC and other regulators have warned investors to be wary of the risks involved and to do their due diligence before investing in any crypto-related products.

The turmoil also serves as a reminder that, while crypto has seen a meteoric rise in recent months, it is still a nascent asset class with many unknowns. Investors should approach crypto with caution, being sure to diversify their portfolios and manage their risk levels accordingly.