Daily News | SEC's New Regulations Will Strengthen Crypto Regulation, MicroStrategy Continues to Increase Its Holdings in Bitcoin, Dymension's Mainnet Officially Launched

2024-02-07, 06:15

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## Crypto Daily Digest: SEC's New Regulations Strengthen Regulation, MicroStrategy Continues to Increase <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> Holdings

On Tuesday, the SEC approved a final rule to bring more financial businesses under its jurisdiction, including crypto securities trading. This regulation may require crypto projects to register as traders. The SEC stated that it has not excluded any specific types of securities (including crypto asset securities) from the scope of application of the final rules. The trading framework is based on functional analysis of securities trading activities conducted by an individual, rather than on the type of securities traded.

SEC Chairman Gary Gensler stated in a statement that "without exemptions or exceptions, if anyone trades in a de facto market making manner, they must register with us as a trader, which is in line with Congress's intention." This move may have serious consequences for the digital asset industry, especially in the field of decentralized finance (DeFi).

On February 7th, MicroStrategy (MSTR. O) officially announced that as of February 5th, 2024, the company holds 190000 Bitcoins with a total cost of $5.93 billion and a cost of $31224 per <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>. The company stated that it spent $37.2 million in January this year to increase its holdings of 850 Bitcoins. Since the end of the third quarter last year, it has purchased an additional 31,755 Bitcoins, marking the largest quarterly increase in the past three years and the 13th consecutive quarterly increase in Bitcoin on its balance sheet.

On the other hand, the Grayscale selling pressure continues to slow down. According to Arkham's latest data, 1,767 BTCs worth approximately $75.78 million were transferred from Grayscale associated addresses to Coinbase Prime Deposit addresses on February 6th at 14:08 (UTC). Also transfer 899.9 BTC to a new address, which appears to be Grayscale's new custodial address.

According to BitMEX Research data, on the 18th trading day of the spot Bitcoin ETF (February 6th), GBTC funds flowed out of $73 million. Since January 11, 2024, the total outflow of GBTC has been $6.149 billion, with 147,792 BTCs flowing out.

The upgrade of <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> Denchun is getting closer and closer. On February 7th, the upgrade of Ethereum Denchun will be activated on the Holesky testnet, which is less than 12 hours away from now.

It is reported that this is the last testnet fork before the mainnet, and the mainnet date should be determined at tomorrow's AllCoreDvs conference call (all indications point to early to mid March). EIP-4844 is coming soon.

On February 7th, according to official news, the Dymension main network has now been officially launched. Two years ago, Dyvision was conceptualized as a grand vision, adding another dimension to the Interchain and building a modular Rollup Internet. Today, with the birth of the first blockchain and Dymension, it exponentially accelerates Interchain, allowing anyone to build their own blockchain and connect it to the crypto economy.

According to Decrypt, the expected airdrop of the Cosmos ecosystem's modular blockchain network Dymension took place early Tuesday morning when the mainnet was online, providing 70 million DYM tokens to early users and specific communities, accounting for 7% of the total supply.

Dymension referred to this airdrop as the "genesis rolldrop", which can be used by over one million unique wallets across various chains and communities, including users on network <a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a>, Celestia, and Ethereum extended networks such as Arbitrum, <a href="/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a>, Base, and the upcoming Blast. Some communities can also participate in airdrops, including holders of the popular Pudgy Penguins NFT series on Ethereum, as well as holders of the Mad Lads and Tensorians NFT series on Solana.

Although there are over 1 million wallets that can claim these 700 million airdropped tokens, the application was already made in January, with only 528,523 wallets ultimately submitting applications. This means that approximately half of eligible users did not apply for DYM, and these tokens were ultimately reassigned to other users.

Based on the total value of token placements, DYM is currently the second largest token airdrop in 2024. Based on DYM's current unit price of $5.199, the total value of tokens dropped by air is approximately $364 million.

Previously, Jupiter airdropped 1 billion JUPs last week, with a total value of $527 million based on current prices.
In terms of data fluctuations, according to Bloomberg, CCData data shows that digital asset spot trading volume reached a 19 month high in January, close to $1.4 trillion, but still lower than the monthly average during the crypto bull market in 2021.

Market maker Wintermute co-founder Evgeny Gaevoy said, "we expect our trading volume to reach 2021 levels by the end of the year, especially Bitcoin. If everything reaches the crazy level of 2021, we will need to raise hundreds of millions of dollars in trading funds."

In addition, Chuan Jin Fong, Sales Director for Asia, Europe, Middle East, and Africa at GSR Markets, stated that the outlook for the crypto market has improved as long-term capital inflows from ETFs exceed expectations.

## Macro: Gold approaching $2,040, Fed will cut interest rates later this year
On February 6th, Tuesday, investors paid attention to the speeches of Federal Reserve officials, attempting to assess how recent economic data will affect the Fed's interest rate decisions. The US dollar, which has been strengthening in recent days, has fallen from its nearly three-month high. The US dollar index closed down 0.29% at 104.15. The benchmark 10-year US Treasury yield has returned below 4.10%, and the interest rate sensitive two-year US Treasury yield has fallen nearly 10 basis points from Monday's one month high.

As a result, spot gold was boosted and approached the 2,040 level, ultimately closing up 0.54% at $2035.89 per ounce; Spot silver rose 0.33% to $22.43 per ounce.
The supply risk caused by the tense situation in the Middle East has boosted the continued rebound of international crude oil, with WTI crude oil closing up 0.91% at $73.40 per barrel; Brent crude oil rose 0.89% to $78.65 per barrel.

The three major US stock indexes fluctuated and closed higher, with the Dow Jones Industrial Average up 0.37%, the Nasdaq up 0.07%, and the S&P 500 index up 0.23%.

On Tuesday, several Federal Reserve officials gave speeches, bringing more clues about monetary policy to investors: Cleveland Fed Chairman Mester said that if the economy develops as expected, policymakers may gain confidence to cut interest rates "later this year", but she said she believes there is no need to rush to cut rates.

Meanwhile, she stated that Federal Reserve officials hope to see more evidence that inflation is cooling and approaching their 2% target, and she warns against premature interest rate cuts.

Her remarks echo the views of several Federal Reserve policy makers in recent weeks, including Chairman Powell, who stated that they need to feel reassured and willing to spend time when considering lowering the benchmark loan rate from a 20-year high.

Mester, who serves as the rotating vote committee this year, stated that she still expects three interest rate cuts in 2024, consistent with the forecast she submitted before the FOMC meeting in December. After speaking to reporters, she stated that interest rate cuts do not necessarily need to be done at the quarterly meeting when the Federal Reserve releases an economic forecast summary. "I think we don't need to be bound to the economic forecast abstract, as long as we communicate well," Mester said.

In addition, Minneapolis Fed Chairman Kashkali also gave a separate speech, celebrating significant progress in inflation but stating that more progress is needed.
Against the backdrop of a strong labor market, Kashkali said that the United States will avoid a recession this year, which looks "quite promising". However, he also mentioned the risks of geopolitical turmoil faced by the global and domestic economies.

Philadelphia Fed Chairman Huck, on Tuesday, stated in an independent commentary that the US economy is about to achieve a soft landing.

In his speech at Rowan University in Glassboro, New Jersey, he said, "The data shows that inflation is continuing to decline, the labor market is becoming more balanced, and consumer spending is strong - these three factors are crucial for us to persist in achieving a soft landing, and we remain optimistic about them." We certainly haven't landed yet, and we will have to continue to fasten our seat belts, but as inflation continues to fall to our 2% target, employment remains strong, and consumer sentiment improves, our target runway is right in sight.”

Huck did not participate in the monetary policy vote this year and did not express his views on when the Federal Reserve should start cutting interest rates in the prepared text. Huck did indicate in December that the next step of the Federal Reserve's policy should be to cut interest rates, but there is no need to immediately start or quickly implement rate cuts. He expressed his support for a "balanced and dynamic approach" to achieve a soft landing of the economy.

<div class="blog-details-info">
<div>Author:**Byron B.**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
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