Hodler’s Digest, January 14-20 – Cointelegraph Magazine

This week's main news

Coinbase Shares, Terraform Labs, and Huawei Debate in 5-Hour SEC Hearing

U.S. District Judge Catherine Polk Faila heard arguments from the U.S. Securities and Exchange Commission (SEC) and Coinbase in June 2022 to dismiss the lawsuit filed by the administrator. The five-hour hearing featured a broad overview of key arguments in the courts about the crypto space, assets and the SEC's role in regulating the industry. During the hearing, the SEC argued that token buyers are investing in the underlying network or ecosystem, which indicates that there is value behind the token purchase. Coinbase's lawyers, however, countered the argument that Bitcoin – which was described as a commodity by an SEC lawyer during the hearing – is also supported by a community and has a network.

Sam Bankman-Fried's parents want FTX's clawback lawsuit dismissed

The parents of former FTX CEO Sam Bankman-Fried are seeking to have FTX's lawsuit dismissed, saying they knew about the crypto exchange's problems and knowingly benefited from malpractice at the company. According to court filings, attorneys representing Joseph Banman and Barbara Fried argued that FTX's lawsuit sought to “capitalize on the fact that the former FTX CEO's parents.” In September 2023, FTX sued Bankman and Fried, alleging that they used their influence in the FTX empire to enrich themselves.

The Ethereum Denkun update is live on the testnet after a 4-hour delay

The new Ethereum network update, named “Cancun-Deneb” or “Dencun”, went live for the first time on the Goerli testnet, according to a January 17 social media post by Ethereum developer Parithosh Jayanthi. An error delayed the launch of the network for four hours. Once implemented on the main network, the Denkun update will significantly reduce the cost of transactions on Ethereum layer 2s such as Optimism, Base, Polygon zkEVM and others, developers said. It also limits self-destruct operations and allows for new bridge and pool features.

The IRS is rolling back crypto tax laws by exempting TXs over $10K

U.S. businesses will no longer be required to report cryptocurrency transactions over $10,000 to the Internal Revenue Service (IRS) until the tax agency issues a regulatory framework. The decision follows revisions to the Infrastructure Investment and Jobs Act by the US Treasury and the IRS. The law went into effect on January 1 and requires all US businesses to report crypto transactions over $10,000. However, the tax inspectorate is reluctant to enforce the rule now. The IRS said it and the Treasury plan to issue proposed rules regarding digital asset reporting, but did not say when they would be introduced.

Spot Bitcoin ETFs collected another 10,600 BTC on the 5th day

Issuers of Bitcoin exchange-traded funds (ETFs) added another net 10,667 bitcoins on a rising fifth trading day. Data compiled by X-account CC15Capital for January 17 shows that a net $440 million in Bitcoin was added to the fund's holdings by the end of the day. BlackRock ETF will take the lion's share with the purchase of 8,700 BTC, valued at $358 million. The data shows that nine ETFs (except Greyscale) have bought about 68,500 BTC since their launch, with a current value of about $2.8 billion. The funds saw a 34% daily volume jump on the fifth day of trading.

Winners and losers

At the end of the week, Bitcoin (BTC) at $42,067, Ether (ETH) at $2,497 and XRP at $0.54. According to CoinMarketCap, the total market cap is $1.57 trillion.

Among the largest 100 cryptocurrencies, the top three altcoin gainers for the week were Flare (FLR) at 29.32%, Siacoin (SC) at 28.79% and Astar (ASTR) at 12.24%.

The top three altcoin losers of the week were Optimism (OP) at -21.12%, Helium (HNT) at -18.70% and FTX Token (FTT) at -17.66%.

Be sure to read Cointelegraph's market analysis for more information on crypto prices.

The most memorable quotes

“I will never allow the creation of a central bank digital currency.”

Donald Trump presidential candidate and former president of the United States

“Many people don't understand the enormity of the hurdles that have been raised, making ETFs as easy an investment commodity as any other.”

John Naas, senior vice president of business development at Ava Labs

“Today [Coinbase] The hearing revealed a key flaw in the SEC's legal theory: It turns every asset on the planet into a security.

Jake Chervinsky, Variant's chief legal officer

“I think SEC Chairman Gary Gensler has become a political liability in the United States.”

Ripple CEO Brad Garlinghouse

“With their growing importance, dollar-backed stablecoins are poised to have a major impact on the financial sector, potentially reshaping how money moves across borders.”

Andrew Pell, Morgan Stanley's head of digital assets

“The United States wants to be competitive with blockchain technology, but regulators will do everything they can to prevent or control it.”

Sandra Carter, Chief Operating Officer at Unstoppable Domains

Forecast of the week

A new bearish signal has been signaled by a bitcoin trader who called the $48K BTC price high.

If a BTC price chart pattern plays out like normal, Bitcoin could lose more, veteran anonymous analyst Filbfilb has warned.

According to the analyst, when the three-day chart crosses below the daily 50-time simple moving average (DMA), it will trend lower. “3-Day Red Break Below 50 DMA. There are few examples of this phenomenon in the past,” he commented.

Additionally, financial analyst Tedtalksmacro has suggested $40,000 as the next milestone.

BTC's price action dropped to $40,600 on January 19, almost a 20% retreat from last week's local highs, data from Cointelegraph Markets Pro and TradingView confirms. Various market participants see the mid-$30,000 range as a potential bounce zone.

FUD of the week

Alex Mashinsky wants to dismiss two lawsuits, asking the court not to mention the loss of Celsius

Attorneys representing former Celsius CEO Alex Mashinsky have filed a motion in federal court to drop charges related to commodity fraud and market manipulation. According to the document, the second count of commodity fraud is “disgusted” and based on the government's handling of crypto “from the first securities fraud.” Mashinsky was indicted on seven felony charges in July 2023 and is currently free on $40 million bail.

Manta Network has experienced a DDoS attack on an exchange listing.

On January 18th, a distributed denial-of-service attack by Manta Network was successfully reported on several exchanges. Kenny Lee, founder of P0x Labs, the team behind the Manta network, says the blockchain's nodes have experienced more than 135 million remotes. Procedure call questions. “This is a very powerful and timed attack,” he commented, “Blockchain is working safely” and “money is safe.” Communication between applications and the network was severely affected by the attack.

GameStop to close NFT marketplace due to regulatory limbo

Gaming retailer GameStop has warned it will shut down its NFT market next month due to regulatory concerns. The company says users have only two weeks left to use its NFT platform. However, the company has assured NFT holders that its decision to further reduce its exposure to crypto will not affect NFTs. The gaming company cited a lack of regulation as the reason for the further decline of crypto services. In December 2022, GameStop announced its exit from the crypto initiative following a Q3 net loss of $94.7 million and layoffs in its digital assets division.

The best magazine sections of the week

Bitcoin ETF guru Eric Balchunas has the last laugh on the skeptics: X Hall of Flame

Bloomberg ETF guru Eric Balchunas shares his decade-long journey into Bitcoin ETFs and his newfound fame as a crypto influencer.

‘It Hurts To Think': NFT Creator Ne Alex Is Selling 70 CryptoPunks Too Early

After selling 70 CryptoPunks and 30 Autoglyphs “too early” to lock in the profits, Nate Alex went on to create Chainwind and Squiggly WTF.

A Real Doctor Who on the Web 3: Tony Pearce's Journey Through Time and Space

Reality+ founder Tony Pearce discovered blockchain in 2017 and has now introduced millions of Doctor Who fans to Web3 collections.

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Editorial staff

Cointelegraph magazine writers and reporters contributed to this article.