Snapshot Web3

January 2, 2024

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Regulatory and Legal News

Indonesian Police Crack Down on Bitcoin Mining Operations for Electricity Theft

Indonesian police recently cracked down on 10 Bitcoin mining operations, seizing 1,314 mining devices and arresting 26 individuals for electricity theft totaling approximately $1 million. The raids, conducted at different locations, revealed stolen electricity from state-owned poles, channeled directly to power Bitcoin machines. The suspects' legal identities remain undisclosed, and investigations are ongoing. Authorities confiscated various equipment, including 11 computer CPU units and laptops. Electricity theft is considered a criminal offense in Indonesia, and the former police chief affirmed that actions would be taken in accordance with the law.

CoinDCX’s Year-End Report Unveils Maturing Investor Base in India

CoinDCX's year-end report for 2023 indicates a significant surge in crypto trading activity in India, achieving its highest-ever trading volume in November. Despite a lack of clarity in crypto policies, India emerges as a global leader in crypto adoption, with 28 entities becoming 'FIU-Registered Reporting Entity.' Surprisingly, Tier-2 cities like Lucknow and Patna lead in adoption, challenging the notion of major urban centers monopolizing the space. The report highlights the maturation of Indian crypto investors, with the average age increasing from 25 to 30 in 2023. Female participation, mainly from Tier-2 and Tier-3 cities, challenges stereotypes, emphasizing the diverse landscape of crypto adoption in India. The country's position in Chainalysis' Global Crypto Adoption Index further solidifies its leading role in grassroots crypto adoption globally.

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Innovation and Launches

Enhancing Transparency: XRP Ledger Introduces New Feature for Fee Visibility

XRP Ledger (XRPL) is enhancing transparency with a new feature introduced by XRPScan, allowing users to view the base transaction fee on the chain. This development follows comments from XRPLF Advisor Dr. J. Scott Branson, who highlighted the very low base transaction fee on the XRP Ledger, proposing an increase from 10 to 200 to benefit validators. The proposal, supported by key figures in the XRP ecosystem, will be voted on during the next maintenance billing. In 2023, XRPL achieved milestones like launching the Xahau sidechain, enabling decentralized exchanges (DEX), and non-fungible tokens (NFTs), marking a turning point in the protocol's evolution.

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NFT, Gaming and Metaverse

Polygon Hits 10-Month NFT Sales Peak in Strong 2023 Finish

Polygon's NFT ecosystem experienced a notable surge in December 2023, reaching its highest monthly sales volume since February of that year, totaling over $47 million. The increase is attributed to NFT collections linked to Gas Hero, a Web3 MMO game associated with the Stepn platform, developed by Find Satoshi Labs. The GasHeroBadge collection led in sales with $15.8 million, followed closely by GasHeroCoupon at $13.6 million. Despite this strong performance, Polygon ranked fourth in blockchain NFT sales volume, trailing behind Bitcoin, Ethereum, and Solana. The momentum in Polygon's NFT sales signals a significant uptick in the platform's traction, marking a positive turn after a relatively lackluster 2023.

Player Liquidity: A Key Theme for 2024 in Blockchain Gaming

Delphi Digital's report on gaming in 2024 reveals rapid growth in Web3 infrastructure despite stable market capitalization. Blockchain gaming sees significant activity with 1.2 million daily active wallets and 15 to 25 million daily transactions. The Philippines, Nigeria, and Pakistan are prominent markets. Player liquidity emerges as a key theme for 2024, and mobile gaming gains traction. Blockchain gaming surpasses DeFi in on-chain transactions, but challenges include costly user acquisition and rising operational expenses, requiring a delicate balance for developers between profitability and user experience.

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Price Action

Bitcoin Greets 2024 With a Peek Over $45,000

On New Year's Day, Bitcoin briefly surpassed $45,000, a level not seen since April 2022. The cryptocurrency experienced a rollercoaster in January 2022, oscillating above $45,000 multiple times with occasional dips. At the start of 2024, Bitcoin's market cap exceeded $836 billion, with trading volumes reaching $22 billion. The anticipation of the SEC's decision on a Bitcoin spot ETF is believed to be a driving force behind the recent upward movement. Bitcoin has shown a year-over-year increase of over 171%, rising more than 13% in the past month and over 5% for the day. The cryptocurrency market is closely watching for regulatory developments and the potential approval of a Bitcoin spot ETF in 2024. Bitcoin's performance is gaining attention as it approaches previous highs and exceeds the market cap of notable companies like Tesla, Berkshire Hathaway, and Meta Platforms.

Cardano Price Prediction: Experts Foresee Surge Beyond $1 in January

Cardano (ADA) is displaying bullish signs with a current trading price of $0.606351, despite a slight 0.28% decrease in the last 24 hours. Analysts anticipate a potential retest of the $1 mark in the near future, considering Cardano's remarkable 2023 performance, marked by a 150% surge and a yearly high of $0.67. The ecosystem's expansion, including a significant increase in Minswap, Cardano's top Decentralized Exchange (DEX), and JPG Store, a leading Non-Fungible Token (NFT) platform, contributes to this positive outlook. Analysts highlight a critical resistance zone between $0.60 and $0.67, presenting scenarios of an upward surge or a potential dip. Despite regulatory challenges, the overall outlook for Cardano in 2024 remains optimistic.

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Interesting Reads

Understanding the Correlation Between Bitcoin, S&P 500, and the US Dollar Index

Bitcoin is often viewed as a tech stock and maintains a strong correlation with the S&P 500, as they both respond similarly to macroeconomic developments. The recent performance of the S&P 500, comprising the largest 500 U.S. companies, has been strong, with a gain of over 24% in 2023, potentially influencing Bitcoin positively. The U.S. Dollar Index (DXY), measuring the dollar against selected currencies, fluctuates between 101 and 108. A falling DXY (weakening dollar) is considered favorable for Bitcoin's price increase. The analysis includes potential support and resistance levels for both the S&P 500 and the U.S. Dollar Index.

Global crypto ATM network shrunk more than 5,700 in 2023

In 2023, the global crypto ATM network experienced a substantial reduction, with over 5,700 units discontinued, marking the first such decline since their initial deployment in 2013. According to Coin ATM Radar, the global count decreased from its peak of 39,350 in December 2022 to around 33,620 by the end of the year, reflecting a 14.5% decline. The data reveals fluctuations in both installations and decommissioning throughout the year, with 10 operators controlling 67% of the global crypto ATM network. Bitcoin Depot and Coinflip are the leading operators. This consolidation indicates a concentration of services among a few major players, potentially posing challenges for new entrants. The future trajectory of crypto ATM deployment remains uncertain amid evolving market dynamics.

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Resource of the Day

What Are Appchains (Application-Specific Blockchains)?

Appchains, or application-specific blockchains, are custom-designed blockchains tailored to the specific requirements of decentralized applications or web3 protocols. They can operate independently or on top of Layer 1 blockchains like Ethereum. Appchains address the limitations of general-purpose chains, providing a nimble and targeted approach. They optimize every aspect for a specific application, offering efficiency, reduced congestion, and lower transaction costs. Appchains typically consist of five layers, including the network, application, data, consensus, and smart contract layers. They leverage modularity, scalability, and interoperability to solve niche problems, allowing developers greater control over blockchain mechanics. Examples include Immutable zkEVM, dYdX Chain, Polkadot Parachains, Cosmos Zones, and Avalanche Subnets, serving purposes such as gaming, DeFi, and data economy. The growth of appchains signifies a milestone in blockchain development, offering tailored and efficient solutions for diverse applications in the decentralized ecosystem.

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Miscellaneous

Tax revenue from cryptocurrency mining modest but growing in Kyrgyzstan

Kyrgyzstan’s untapped hydroelectric capacity could make it a future mining powerhouse, but its progress has been slow.

BITCOIN MINERS ACCUMULATE $1.5 BILLION IN REVENUE IN DECEMBER

According to reports, Bitcoin miners accumulated revenue of about $1.5 billion in December 2023.

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The information provided in this newsletter is for informational purposes only and should not be interpreted as investment advice, endorsement, or recommendation. Cryptocurrency investments carry significant risk due to their volatility. You should consider your financial situation, investment goals, and risk tolerance before making any investments. We strongly recommend consulting a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.