This Week in Crypto: Dovish Fed Sparks Rebound

Bitcoin Unchanged as Massive Dormant Wallet Reawakens

As market participants continue to wade through the aftermath of the FTX debacle, Bitcoin (BTC-USD) prices are unchanged week-over-week, down just 0.2%. Dovish Federal Reserve Meeting Minutes telegraphing the likelihood of a slower pace of rate hikes over the coming months helped Bitcoin storm back from weekly lows of ~$15,650 to trend near $16,600.

Sentiment among Bitcoin traders remains dampened as the number of coins flowing out of exchanges reached the fastest pace recorded in 2022, and miners continued offloading their reserves amid the ongoing crypto winter. Moreover, news of a dormant whale wallet containing 10,000 BTC believed to be from failed exchange BTC-e being back on the move and transferring 3,500 coins reignited concerns among investors. The Bitcoin Fear & Greed Index underscores the market’s anxiety as sentiment hovers in the extreme fear territory. 

Interestingly, the Grayscale Bitcoin Trust (GBTC), an ETF-like stock mirroring Bitcoin prices in the equity market, is trading at the most significant discount on record. The discount has arisen as Grayscale refuses to transparently acknowledge its holdings of Bitcoin meant to back shares of GBTC. Traders and funds like Ark’s Cathie Wood are scooping up GBTC in the hopes that the huge discount between Bitcoin prices and GBTC will eventually close, delivering substantial returns.  

FIFA Fan Tokens Crumble as Privacy Questions Sink Uniswap 

With the FIFA World Cup in full swing, Chiliz (CHZ), the native token of the Socios fan engagement platform, has plunged from recent highs in tandem with other fan tokens issued to represent different soccer clubs. Although fan tokens remain popular, CHZ has fallen -21.20% over the last seven sessions, retreating from multi-month highs reached just weeks earlier. In particular, Argentina’s fan token crashed after an unexpected loss in the nation’s opening game against Saudi Arabia.

Meanwhile, another significant underperformer over the week was the decentralized finance (DeFi) platform Uniswap, which saw its fortunes crumble following privacy policy updates. To improve transparency among users amid the crisis of confidence erupting from the FTX meltdown, Uniswap disclosed that it is collecting certain data like web browsers and operating systems used to access its services while denying collecting personally identifiable information. Nevertheless, despite Uniswap’s denials, the news raised newfound privacy concerns among users, sending the platform’s native UNI token tumbling by -7.20%.

Litecoin Surges Ahead of Halving. Huobi Rebrands

While the broader market mainly remained unchanged over the last seven sessions, some notable outperformers arose. Among the top performers was Litecoin (LTC-USD), which outperformed its peers by a wide margin. At a time when most cryptocurrencies are languishing in a bear market, Litecoin touched a six-month high, driven in large part by an upcoming halving. Traders frontrunning the halving, which will see the amount of new Litecoin supply and miner rewards cut in half, have spurred a 32.8% rally in LTC. 

Dash (DASH), a fork of Litecoin, has come under significant pressure recently, especially after reports revealed that the European Union was considering banning the use of privacy coins like Dash, Monero, and others within its borders. 

In the meantime, Huobi Token (HT), the native token of Huobi Exchange, also delivered noteworthy gains as rebranding and expansionary plans following the acquisition by About Capital Buyout Fund improved confidence in the exchange’s outlook. TRON Founder and Huobi Advisor Justin Sun unveiled the exchange’s rebranding plans in an event held in Singapore on November 22, contributing to HT’s 18.4% push higher week-over-week.

JPMorgan Trademarks Wallet, Yen CBDC Tests Inbound, & More

As interest in crypto amongst traditional brick-and-mortar financial institutions continues to heat up, JPMorgan (NYSE:JPM) has become the latest bulge-bracket bank to step into the segment. The bank trademarked its own J.P. Morgan Wallet with the U.S. Patent and Trademark Office, paving the way for the roll-out of multiple financial services, including crypto transfers, exchange services, payment processing, and more.

Besides the growing embrace from financial services providers, central bank digital currencies are also gaining momentum. The Bank of Japan is the latest to experiment with the feasibility of a digital yen (JPY). According to reports from Nikkei, the central bank plans to work alongside three major megabanks in the country in 2023 to evaluate the functionality of a digital yen in different settings.

Finally, well-known activist investor Bill Ackman has become the latest finance professional to endorse the prospects for blockchain technology. While acknowledging its potential in criminal activities, he drew parallels to phones and the internet to make his case on Twitter for blockchain technology’s outlook, highlighting Helium (HNT) in a multi-tweet thread. HNT tokens remained mostly unchanged on the week, rising a modest 1%.

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