Daily News | Hong Kong Regulates the Virtual Asset Supervision of Public Funds; SOL, AVAX, and HNT Leading the Rise of Cryptocurrencies in 2023; SOL Has Risen by Over 700% This Year

2023-12-27, 03:51

[//]:content-type-MARKDOWN-DONOT-DELETE
![](https://gimg2.gateimg.com/image/article/17036574771_19.png)
## Crypto Daily Digest: Hong Kong regulates the supervision of virtual assets in public funds, SOL led the rise of currency in the 2023 era
Recently, according to China Fund News, the Hong Kong Securities Regulatory Commission issued a notice stating that for public fund products with virtual assets accounting for more than 10%, their management companies, relevant investment strategies, and product custodians must meet the corresponding conditions. The management company must have personnel with experience in managing virtual assets. According to current regulations, generally speaking, institutions holding the Hong Kong Securities Regulatory Commission's No. 9 license plate must not exceed 10% of their fund portfolios in terms of virtual assets.

The latest notice clearly states that if the proportion of virtual assets exceeds (or is expected to exceed) 10%, the management agency must apply to the Hong Kong Securities and Futures Commission for approval before the relevant products can be sold to Hong Kong investors.

This notice titled "Hong Kong Securities and Futures Commission's Recognition of Fund Investment in Virtual Assets" clearly states that firstly, companies managing virtual asset funds (with virtual assets accounting for more than 10% of funds) must have a good compliance record, and at least one employee of the company must have experience in managing virtual assets or related products. The management company must meet the existing or new requirements of the licensing regulatory authority for virtual asset management companies.

Yesterday, crypto research firm Delphi Digital released "The Future of DeFi in 2024." It is mentioned that the core liquidity staking pattern of <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> is difficult to undergo any substantial changes; RWA quietly becomes one of the most successful areas of cryptocurrency in 2023, <a href="/price/uniswap-uni" target="_blank" class="blog_inner_link">Uniswap</a> V4, Uniswap X, and other DEX will become the theme of 2024, Rollups is a wise choice for various applications, and IRD may become one of the popular narratives of cryptocurrency.

Among them, Delphi Digital believes that Atm, pendlefi, Notional Finance, and iporio are sustainable IRD protocols.

Interest Rate Derivatives (IRD), also known as interest rate derivatives, are financial contracts whose value is based on a benchmark interest rate or interest bearing asset. This type of derivative includes interest rate futures, options, swaps, etc. They are tools used to hedge risks or speculate on changes in interest rates in the market.

Interest rate derivatives can be divided into two categories: linear and nonlinear. Linear derivatives such as interest rate swaps and futures, whose payments or returns are directly related to the benchmark interest rate; Nonlinear derivatives, such as interest rate options, provide the right to buy or sell a certain asset under specific conditions, but not an obligation.

On December 26th, according to CoinDesk, in 2023, Layer-1 blockchain <a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a> (SOL) took the lead in token price increases, followed closely by <a href="/price/avalanche-avax" target="_blank" class="blog_inner_link">Avalanche</a> (AVAX), <a href="/price/stacks-stx" target="_blank" class="blog_inner_link">Stacks</a> (STX) and <a href="/price/helium-hnt" target="_blank" class="blog_inner_link">Helium</a> (HNT).

Solana has seen a significant increase since mid October, with a growth rate of over 700% since the beginning of this year. GSR senior strategist Brian Rudick said, "after FTX went bankrupt, Solana's survival did indeed have problems. With the increase in on-chain activities, new understanding of its innovative technology, and several high-profile air drops, it has instead flourished."

Helium's HNT token also achieved considerable revenue in 2023, with the majority in December. Following the company's entry into the mobile sector, HNT rose 500% throughout the year. For Avalanche, many institutional partners have helped increase the value of tokens, and AVAX has risen 300% so far this year. The native token Stacks (STX) of Stacks Network increased by 623% throughout the year. With the <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> Ordinals craze and the continuous growth of TVL on the protocol, the token saw a significant increase in March. According to DeFiLlama's data, the TVL of Stacks Network also increased significantly throughout the year, climbing from $6 million in January to $50 million.

Rudick stated that he expects Bitcoin and Ethereum to continue to rise in the new year, partly due to the possibility of approval for US spot Bitcoin ETFs and the assistance of capital inflows. He also pointed out, "we see a new wave of blockchain users in decentralized identities based on plans or announced interests from China, the European Union, Brazil, and other countries." Martin said that in addition to the focus on ETFs at the beginning of the new year, real-world assets will also become an area worth paying attention to. Some related foundations have been established this year, but mainstream society has not caught up yet.

At the data level, Coinalyze statistics show that the market share of open positions in Bitcoin futures has decreased from 50% to 38% in the past two months, the lowest level in the past two years. It seems that market funds are now shifting towards Altcoins, which also explains why BTC's dominant position in open futures positions is declining.

## Today’s Main Token Trends
### BTC
![](https://gimg2.gateimg.com/image/article/1703657516BTC.png)
The market experienced various retracements this week, and last night's session once again broke below the midpoint line. The mid-term trend appears bearish, with key support levels at $40,280 and $38,399. The monthly closing is optimistic, aiming for the $40,000 mark.

### ETH
![](https://gimg2.gateimg.com/image/article/1703657536ETH.png)
In the short term, the four-hour chart shows a descending triangle trend. It is advised to monitor whether the resistance at $2,381 is surpassed for an upward movement. The bearish target from yesterday accurately reached the support level at $2,180. If this level holds without breaking, a continued upward trend forming a head and shoulders pattern is expected. If broken, the next target is $2,135 for retesting support.

### INJ
![](https://gimg2.gateimg.com/image/article/1703657553INJ.png)
The daily chart shows signs of a topping structure, and yesterday's break below the $37.54 support suggests a continued test of $32.32. In the medium to long term, positive outlooks are maintained at $61.084, $97.616, and $117.48. The overall trend belongs to the mid-term bull market, and holding as a primary strategy is advised.

## Macro: US stocks collectively closed higher after returning from the holiday; Investment banks have different opinions on next year's interest rate cut
On Tuesday, the US dollar index continued its downward trend and fell to an intraday low of 101.45, ultimately closing down 0.23% at 101.47; The 10-year US Treasury yield was close to flat at 3.897%, while the two-year US Treasury yield, which is more sensitive to the Federal Reserve's policy rate, closed at 4.356%.

Benefiting from the weakness of the US dollar index and US bond yields, spot gold continued to climb and briefly reached an intraday high of $2069.14 during US trading, ultimately closing up 0.73% at $2,067.97/ounce; Spot silver rose 0.16% to close at $24.23 per ounce.

Due to the only attack on Red Sea vessels, the market has raised concerns about shipping interference, resulting in a significant increase in oil prices within two days. WTI crude oil rose to an intraday high of $76.14 in the trading session, but gave up some of its gains in the late trading session, ultimately closing up 2.58% at $75.28 per barrel; Brent crude oil rose strongly above the $80 mark and ultimately closed up 2.23% at $80.63 per barrel.

The long weekend of the US stock market ended, and the three major stock indexes collectively closed higher. The Dow Jones Industrial Average rose 0.43%, the S&P 500 Index rose 0.42%, approaching the historical high of January last year, and the Nasdaq rose 0.54%.

The year 2023 has been turbulent for the market, and investment bank analysts in 2024 have mixed views on the market, some are optimistic and some hold a pessimistic attitude. The main <a href="/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> is that the US economy will strengthen and the Federal Reserve will cut interest rates; Pessimistic people believe that although inflation seems to be under control at present, people's concerns about inflation may rebound in the spring of next year. The factors that cause problems are interest rates themselves, supply chain issues, and high prices of materials, goods, and services.

Among them, John Stoltzfus, Chief Investment Strategist at Oppenheimer, predicts that the Federal Reserve will not cut interest rates until at least the second half of next year, and if inflation becomes more sticky, it may take action no later than the fourth quarter. Some market participants expect a series of interest rate cuts in the first quarter. In our view, half of them appear overly optimistic. After 11 rate hikes and 3 "jumps," the Federal Reserve's pause in rate hikes is likely to be longer than many people expected.

The BCA research institution believes that if the Federal Reserve cuts interest rates quickly, the stock market may avoid such a sharp decline next year, but the institution does not expect inflation to decline rapidly. The BCA emphasized that “we are still in the camp of slowing inflation, but we do not expect its slowdown to be fast enough,” to the extent that the Federal Reserve and the European Central Bank are unable to cut interest rates in a timely manner to prevent a significant increase in unemployment rates. Unless an economic recession is imminent or inflation completely collapses, it is unlikely that the Federal Reserve will cut interest rates before next summer.

Last year at this time, the market bet that the Federal Reserve would raise interest rates by about 50 basis points by mid-2023 and relax some tightening policies by the end of this year. As a result, the Federal Reserve raised interest rates twice as much as the market expected, and policy has yet to be relaxed.

At this moment, although the US economy, especially the labor market, seems to have broad resilience, interest rate traders still firmly believe that inflation has become a "decoration in the rearview mirror," so they are currently considering a lot of factors to relax policies. The Federal Reserve estimates that policy interest rates can be relaxed by 75 basis points in 2024, but the market believes that a double relaxation is entirely achievable. We will wait and see how the market will develop.

<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.
</div>