🚨🚨Crypto Market News You Can’t Miss! (01/01/24) 🚨🚨

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2 Jan 2024

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The crypto market is always evolving and changing, and staying on top of the latest developments can be challenging. However, if you want to be a successful crypto investor or trader, you need to be aware of the most important news that can affect the market sentiment and price movements. In this article, I will summarize the top 3 news that you need to know in 2024, and how they can impact your crypto portfolio.

1. Orbit Bridge Loses $82 Million in a Massive Hack

One of the biggest news of the year was the hack of Orbit Bridge, a cross-chain bridge protocol that allows users to transfer assets between different blockchains. The attack happened on December 31st, 2023, just three hours before the new year, and resulted in the loss of approximately $82 million worth of crypto assets. The hackers managed to send the stolen funds to new wallets in five separate transactions, which included $50 million in stablecoins (30 million Tether, 10 million DAI, and 10 million USDC), 231 wBTC (about $10 million), and 9,500 eth (about $21.5 million).

The Orbit Bridge protocol is closely connected to the Klaytn network, a blockchain platform developed by Kakao, a South Korean internet giant. Eight of the largest assets on the Klaytn network by total market cap are wrapped assets on the Orbit Bridge, which means that they are tokenized versions of other crypto assets that can be used on the Klaytn network. The hack of Orbit Bridge has caused a significant drop in the value of these wrapped assets, as well as the native token of the Klaytn network, KLAY.

The hack of Orbit Bridge is a reminder of the risks involved in using cross-chain bridge protocols, which are often complex and experimental. Users should always do their own research and due diligence before trusting their funds to any third-party service, and always use secure wallets and platforms to store and transfer their crypto assets.

2. NFT Traders Use Tax Loss Harvesting to Reduce Their Tax Bills

Another major trend that emerged in the crypto market in 2024 was the use of tax loss harvesting by NFT traders. Tax loss harvesting is a strategy that involves selling assets that have lost value in order to offset the capital gains from other assets, and thus reduce the tax liability. This strategy is commonly used by stock investors, but it can also be applied to crypto assets, including NFTs.

NFTs, or non-fungible tokens, are unique digital assets that represent ownership of various forms of art, collectibles, gaming items, and more. NFTs have exploded in popularity in the past few years, with some NFTs selling for millions of dollars. However, not all NFTs are valuable, and many NFT traders have accumulated a lot of worthless or low-value NFTs in their wallets over time.

On December 31st, 2024, the deadline for filing taxes in many countries, many NFT traders decided to sell their unwanted NFTs for pennies in order to generate losses that can be used to offset their gains from other crypto assets. This resulted in a spike in activity and volume on various platforms and services that help users get rid of their worthless NFTs, such as Harvest.Art, Unsellable NFTs, and Sol Incinerator.

Skyler Hallgren, Unsellable’s director of partnerships, stated,

Most of our users are not looking to get into a different speculative crypto investment; they’re looking to make a really straightforward, no-nonsense end-of-year tax strategy […] Back in the middle of the year we did an analysis on about 900 of our users. I realized that the average user realized losses of $4,200. I feel a high level of confidence that there are hundreds of millions of dollars in unrealized losses that are frozen right now.

The use of tax loss harvesting by NFT traders is a sign of the maturity and sophistication of the crypto market, as well as the increasing awareness and compliance of the crypto community with the tax regulations. However, it is also important to note that tax laws vary by country and jurisdiction, and users should always consult a professional tax advisor before engaging in any tax-related activities.

3. Bitcoin ETF Launches with a Whimper, But Could Boost Bitcoin Price in the Long Run

The third and final news that you need to know in 2024 is the launch of the first spot Bitcoin ETF in the US. A spot Bitcoin ETF is an exchange-traded fund that tracks the price of Bitcoin directly, rather than using derivatives or other instruments. Many crypto enthusiasts and investors have been waiting for years for the approval of a spot Bitcoin ETF by the US Securities and Exchange Commission (SEC), as they believe that it would increase the liquidity, accessibility, and legitimacy of Bitcoin, and thus drive up its price.

However, the launch of the first spot Bitcoin ETF in January 2024 was met with a lukewarm response from the market, as the initial inflows were much lower than expected. According to VanEck adviser Gabor Gurbacs, the “initial impact” of a Bitcoin ETF is being drastically overestimated. Gurbacs stated that he believes that we may only see net inflows of around $100 million from “mostly recycled” money from large institutional investors upon launch.

However, Gurbacs also argued that the spot Bitcoin ETF will have a positive impact on Bitcoin price in the long term, similar to what happened to gold after the launch of gold ETFs. He said that the spot Bitcoin ETF will provide a more efficient and transparent way for investors to access Bitcoin, and that it will attract trillions of dollars over time. Bloomberg ETF analysts Eric Balchunas and James Seyffart have also agreed with Gurbacs analysis, and predicted that the spot Bitcoin ETF will eventually reach $50 billion in assets under management.

The launch of the spot Bitcoin ETF is a milestone for the crypto industry, as it marks the recognition and acceptance of Bitcoin by the mainstream financial system. However, it is also important to remember that the spot Bitcoin ETF is not a magic bullet that will instantly boost Bitcoin price, and that there are many other factors that influence the supply and demand of Bitcoin, such as adoption, innovation, regulation, and sentiment.

Conclusion

The crypto market is always full of surprises and opportunities, and staying informed and educated is the key to success. In this article, I have summarized the top 3 news that you need to know in 2024, and how they can affect your crypto portfolio. I hope that this article has been helpful and informative, and that you have learned something new and valuable. If you want to learn more about the crypto market and how to invest in it, you can visit our page and check out our blog, where I post regular updates and insights on the latest trends and developments in the crypto space. Thank you for reading, and happy new year!

Disclaimer: The information and content provided in this article are for informational and educational purposes only and do not constitute any financial, investment, or legal advice. Trading, buying, or investing in cryptocurrencies involves significant risks and may result in the loss of your capital. You should do your own research and consult a professional before making any decisions. This article is not a suggestion or an endorsement of any cryptocurrency or platform.

I hope you enjoyed this edition of the crypto news roundup, and that you learned something new and useful. If you did, please share this article with your friends and family, and subscribe to me for more updates and insights. Thank you for reading, and happy crypto!