A Win For Privacy, Ethereum Waking Up & AI Agents On the Rise

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This Week’s Top Stories

“Trump admin eyes CFTC to lead digital asset regulation” – Tuesday, 26 November 2024

• According to news reports, Donald Trump and his team aim to expand the powers of the Commodity Futures Trading Commission (CFTC) by granting it oversight of a significant portion of the U.S. cryptocurrency market. This proposal aligns with Trump’s criticisms of the current administration’s approach to crypto and the existing regulatory framework, where the Securities and Exchange Commission (SEC) has held primary authority over the cryptocurrency industry.
• The CFTC, as mandated by Congress, oversees the $20 trillion U.S. derivatives market, including futures trading, options, and the physical commodities market, such as precious metals and oil. Expanding the CFTC’s authority to include markets like the Bitcoin and Ethereum spot markets could provide the cryptocurrency industry with much-needed regulatory clarity moving forward.

“A historic win for privacy! A court overturns U.S. sanctions against Tornado Cash” – Tuesday, 26 November 2024

• The U.S. Court of Appeals ruled that the U.S. Department of the Treasury exceeded its authority by sanctioning Tornado Cash’s immutable smart contracts. The court reversed the district court’s decision, arguing that Tornado Cash’s smart contracts are not “property” and, therefore, cannot be sanctioned.
• Following the news, the price of Tornado Cash’s governance token, TORN, surged from around $3.60 to a high of nearly $35, an increase of approximately 870 percent.
• The ruling clarifies the boundaries of the Treasury Department and the Office of Foreign Assets Control (OFAC) in digital asset regulation. However, it does not imply that other parts of Tornado Cash are exempt from sanctions. Bill Hughes, a lawyer at ConsenSys, has written a detailed post on the matter, which you can read here.

“Fed officials see interest rate cuts ahead, but only ‘gradually,’” – Tuesday, 26 November 2024

• The Federal Reserve released the minutes from the November meeting, with officials expressing confidence that inflation is easing. They also noted that the labor market remains strong, allowing for further gradual interest rate cuts. While members indicated that additional rate cuts are likely, they did not specify the timing or magnitude of these cuts.
• The next FOMC meeting is scheduled for December 18, 2024. Currently, the market predicts a 66 percent probability of a 25-bps rate cut, while 33 percent expect the Fed to pause and maintain the current target range of 450–475 bps.

A Quick Crypto Overview: Bitcoin Was Quiet, Ethereum Woke Up

Bitcoin traded sideways over the weekend and began the week with an 8 percent correction from Monday morning until Tuesday evening. This corrective move dragged down most of the cryptocurrency market with it. Interestingly, on Tuesday evening, Ethereum began to steal the spotlight from Bitcoin, trading to the upside for 24 consecutive hours.

This upward move from ETH extended to various Ethereum beta coins, such as AAVE, ENS, OP, and ARB. At the time of writing, all of the mentioned coins have outperformed BTC since Tuesday evening, as shown in the chart below.

The total market capitalization for cryptocurrencies remains slightly down for the week (-0.4 percent) but has recovered significantly from Tuesday’s low, currently up more than 7 percent from its weekly bottom.

Chart of the Week: Bitcoin Dominance

Bitcoin dominance is on track to close the month of November with a red monthly candle. At the time of writing, Bitcoin dominance is down 3.4 percent for the month, which would make November the worst-performing month for Bitcoin dominance since August 2022, when it closed down more than 4 percent, marking a low for dominance at that time.

Bitcoin dominance reached a high of over 61 percent this month – a level not seen since March 2021. However, with Ethereum starting to perform better against Bitcoin, the market is left wondering: is the time finally ripe for Ethereum and, with it, altcoins to begin reclaiming some market share from the king? Time will tell.

What’s Happening On-Chain? AI Agents

AI agents have been performing exceptionally well over the last couple of days, with various AI agents ranking among the top performers of the past 24 hours. If you are interested in this emerging narrative in the cryptocurrency market, check out cookie.fun, an AI Agents Index tracking 182 AI agents with a total market cap of $6.12 billion – up 37 percent in the last seven days.

CoinGecko also has a specific category for AI agents, showing a total market cap of $7.5 billion, up 16 percent this week for the category.

In other news, Pump Fun has announced an indefinite suspension of its live streaming feature following recent controversies and user concerns regarding content. Solana’s memecoin launchpad stated on Monday that it has paused the feature amid backlash from the community and mainstream media outlets.

The feature had created considerable controversy and concern across the crypto community, with many users calling for its shutdown over the past few days as content being livestreamed ranged from animal cruelty to proposed self-harm.

In the world of NFTs, Animoca Brands announced a strategic investment in Igloo, Inc., the parent company of Pudgy Penguins. Luca Schnetzler, CEO of Pudgy Penguins, commented: “This investment from Animoca Brands is a testament to our vision and commitment to building a thriving ecosystem. It will continue to help us create the largest on-chain community and power the next wave of consumer crypto.” The floor price for Pudgy Penguins has risen from 11 ETH on Tuesday to over 13 ETH following the announcement.

Digital Asset Fund Flows: Ethereum Almost On Par With Bitcoin?

Last week, digital asset investment products saw the largest weekly net inflows in history, with a total of $3.13 billion in net inflows. While Bitcoin saw most of the inflows last week, totaling roughly $3.1 billion, and Ethereum only took in a measly $2.8 million, this week might paint a different picture.

Bitcoin spot ETFs started this week with a rather large net outflow of $435 million on Monday, followed by $120 million in net outflows on Tuesday and $100 million in net inflows on Wednesday. Ethereum spot ETFs, on the other hand, brought in $2.9 million in net inflows on Monday, $40 million on Tuesday, and $90 million on Wednesday. An interesting development – let’s see if this persists over the coming days and weeks.

Market Sentiment: Some Recovery…

As we mentioned in last week’s Wrap, the market sentiment in the cryptocurrency market was in extreme territory, levels only seen twice since early 2018. The market reacted to it with a cool-off period at the beginning of this week. Crypto market sentiment is now back at more moderate levels, even though it’s still in Extreme Greed territory (78), but down from 94 last week.

Both the Phantom and Coinbase applications have lost some ground in the Apple iOS App Store over the course of this week. Coinbase is in place 67 overall, and Phantom dropped to place 119.

Other Relevant News

• Novogratz said that almost all members of the cabinet of US President-elect Trump hold Bitcoin and are staunch supporters of digital assets. – Link
• Nate Geraci, president of The ETF Store, said that he believes that the Solana ETF is likely to be approved by the end of next year at the latest. – Link
• MicroStrategy announced that it has acquired 55,500 BTC for approximately $5.4 billion, at an average price of $97’862 per Bitcoin. – Link
• Global ETF provider WisdomTree has submitted a registration application to launch an XRP exchange-traded fund (ETF). – Link
• Brazilian congressman Eros Biondini proposed a bill to establish a "Bitcoin Strategic Sovereign Reserve" to allocate up to 5 percent of international reserves to Bitcoin. – Link
• The cryptocurrency exchange Kraken announced that it will stop trading on its NFT market on November 27. Users can only withdraw assets at present. – Link
• Ken Sim, mayor of Vancouver, Canada's third largest city, announced plans to include Bitcoin in the balance sheet of the city of Vancouver. This proposal will be submitted to the city council on December 11. – Link
• MARA purchases $615 million worth of Bitcoin, boosting total holdings to 34’794 BTC. – Link
• Coinbase will stop offering rewards to USDC holders located in the European Economic Area (EEA) on December 1 due to the upcoming MiCA regulations. – Link
• Cantor Fitzgerald is expected to acquire approximately 5 percent of the ownership interest in Tether. Cantor Fitzgerald CEO Howard Lutnick will serve as Trump's Secretary of Commerce. – Link

Looking Ahead: 3 Percent Below $100’000 And Less Euphoria

Bitcoin is trading just below $97’000 at the time of writing, up more than 6 percent from its weekly low on Tuesday around $91’000. While it may seem like we are miles away from the magical $100’000 level, it’s important to look back and realize that we traded at this price for the first time in history just a week ago and were all euphoric about it. Now we are once again only roughly 3 percent below $100’000 and the market seems less euphoric, as the market sentiment analysis shows. While this alone of course does not guarantee that we will break the magic level soon, it is important to reflect on our journey.

From a price action perspective, the current action is perceived as positive by many market participants, showcasing strength above the $90’000 level which we tested from the upside this week, bottoming above $91’000 on Tuesday. Should bitcoin fail to break the $100’000 on its next attempt, traders will likely watch for a reaction around $95’000 or then below at $90’000.

Below, you can find some of the key data releases and events to watch out for next week.

Monday, 2 December 2024

• Euro Zone – Unemployment Rate

Tuesday, 3 December 2024

• Switzerland – CPI
• USA – JOLTS Job Openings

Wednesday, 4 December 2024

• Euro Zone – PPI

Thursday, 5 December 2024

• Switzerland – Unemployment Rate
• USA – Initial Jobless Claims

Friday, 6 December 2024

• Euro Zone – GDP
• USA – Unemployment Rate
• USA – Nonfarm Payrolls