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*Ninepoint Digital Asset Group, is a division of Ninepoint Partners LP.
(14 Day Change as of Jan 5, 2023 11:00AM ET)
Bitcoin Price: $16,829  (1.01%)
DeFi Total-Value-Locked: $39.57B
Ethereum Price: $1,248  3.91%
Crypto Market Cap: $819B
Bitcoin Range: $16,497 - $16,988
BITC.U Close: $5.00 (as of Jan 04, 2023)
Ethereum Range: $1,193 - $1,260
BITC.U NAV: $5.00
Bitcoin Dominance: 41.71% 0 .07%
BITC.U Premium:  0.00%
Bull Market for Bankruptcy Lawyers: Celsius Legal Fees Surpass $53 Million in Bankruptcy Case

Bankrupt crypto lender Celsius is seeking to extend the deadline by another month; the extension, which will be heard in bankruptcy court on January 10, is needed "to provide account holders with additional time to file any proofs of claim," as per a Celsius Tweet. The company's creditors have already filed more than 17,200 claims, with lawyers and other advisers seeking $53 million in legal fees for their services in just the four months following Celsius’ filing for bankruptcy.

China Launches State-owned Digital Asset Trading Platform

The trading platform was created jointly by several state-owned organizations: The China Technology Exchange, the Cultural Relics Exchange, and the Copyright Service Centre, which “aims to standardize the trading process to dampen speculation,” according to reports. Perhaps China is responding to demand in the country for a way to buy NFTs and other digital goods after several large technology firms such as Tencent and Baidu limited their offerings. China has previously announced a ban on Bitcoin mining and has generally taken a dim view of cryptoassets but has been a big proponent of Central Bank Digital Currencies. Details are scant but this is worth watching.

Ethereum Founder Vitalik Buterin Hopes For Solana's Revival Amid Market Struggles

Ethereum founder Vitalik Buterin has expressed his support for rival cryptocurrency Solana, saying that he hopes the project and its developer community "gets its fair chance to thrive." The price of Solana, which was once dubbed an "Ethereum killer," has fallen by over 96% since its all-time high. Solana has faced criticism for being too centralized and unstable and has also been affected by its association with collapsed FTX Founder and Former CEO Sam Bankman-Fried, who invested heavily in the cryptocurrency and supported Solana projects with venture deals and market-making. The liquidation of Bankman-Fried's companies’ assets could have severe implications regarding further Solana price slippage, as they collectively held over 58 million Solana, representing 15% of Solana’s current circulating supply.

FTX Founder Sam Bankman-Fried Pleads Not Guilty

FTX Founder Sam Bankman-Fried plead not guilty to criminal charges that he defrauded investors and looted billions of dollars in customer funds at his now-collapsed cryptocurrency exchange. Bankman-Fried is charged with two counts of wire fraud and six counts of conspiracy, including money laundering and campaign finance violations. He previously acknowledged these as “risk management failures” before discovering that former Alameda CEO Caroline Ellison and former FTX CTO Gary Wang had pleaded guilty and were cooperating with prosecutors.

Galaxy Digital's $100 Million Investment Keeps Argo Blockchain Afloat

Bitcoin miner Argo Blockchain has struck a deal to sell its Helios mining facility in Texas to Galaxy Digital for a whopping $65 million. The facility, which was Argo's largest and has 180 megawatts of power capacity, will become the flagship mining operation for Galaxy. In addition, Argo will receive a $35 million loan from Galaxy Digital, secured by Argo’s 23,000+ mining machines. The deal comes as a much-needed boost for Argo's balance sheet after a previous $27 million funding deal fell through in October. Several miners have faced solvency issues, with rising energy costs and Bitcoin prices remaining low. Galaxy Digital’s investment ensured the stability of these miners, which is imperative for the Bitcoin network; the failure of Argo Blockchain or similarly sized mining companies would decrease the overall mining power of the network and cause slower transaction confirmation times.
Is Ownership Always Good? Challenging one of the Core Arguments of Web3

By Alex Tapscott

The internet is entering a new era, known as Web3. Web1 was the read web, a way to consume information digitally. Web2 was the read/write web, a way to consume information but also communicate and collaborate online. Web2 was programmable, meaning users could upload information. Web2 was dominated by social media companies who captured user attention and sold it to the highest bidder- advertisers. The Web is taking another leap forward: Web3 is the read/write/own web, meaning users can now also own their own digital goods, their identities and their data and have a say in the governance of the services and products that they use. Internet users already spend $100 billion buying virtual goods online. In a Web3 world they actually own them. Ownership becomes part of the user-experience.

Imagine if early users of Web2 social media companies earned an ownership stake in the platform by contributing to their success at the beginning. My alma matter, Amherst College, was among the first 34 schools invited to join Facebook in 2004, and I was an active user of the platform in its early years. Despite adding critical value to the platform in the form of data, photographs, connections and so forth, we (that is, early users) did not earn a stake in the network. Instead we suffered the same fate as everyone else, becoming the subject of hyper-targeted ads leveraging our personal data.

Now let us imagine a “Web3” version of a social network. In the Web3 version, we still use the platform to connect with friends, share photos, and create communities, but we also earn a stake in the network and have some say in its direction. This ownership incentive helps the start-up network to compete against better funded and more entrenched Web2 competitors. Slowly but surely, the user-owned social network siphons off users from established ad-based social networks, and the network’s native token (owned by users and founders alike) increases in value. It’s a win-win. Or is it?

Web3-based models can lead to perverse incentives, where early users (and perhaps knowledgeable insiders like VCs and other influencers) try to exploit early token rewards, indifferent to what the underlying service does. Once those incentives dry up, they move on to the next thing. Everyone becomes a mercenary in the hunt for the next unicorn from which to extract a token reward before moving onto the next hunting ground. The underlying application suffers.

It's hard to argue that ownership in and of itself is ‘bad.’ After all, ownership is a way to participate in wealth creation and have a say in how things are run. A user-owned network may decide to only generate enough profit to ensure the network is well run, creating a better experience. Instead, the issue is on designing ownership mechanisms so that they enhance, rather than overwhelm, the inherent user experience. The solution, therefore, is twofold: first, build an equitable and sustainable token distribution model that incentivizes long-term holding if you prefer. Second, make the underlying application or service inherently useful where ownership is an important feature. Too often, developers have launched Web3 applications seemingly to justify the existence of a token and little else. Make both ownership and utility essential to the experience.

I doubt that a user-owned Facebook would have chosen an ad-driven model, but perhaps 2023’s version of 19-year-old Mark Zuckerberg is a token-obsessed Web3 entrepreneur preoccupied with building a model where users harvest value from token distributions rather than build lasting network effects. Such counterfactuals are impossible to prove. Ultimately, if Internet users are going to continue to create value, we should have a model for them to capture some value from useful services. The two must go hand in hand.

Can Solana Survive? Plus: 2023 Crypto Predictions!
Happy New Year! On today’s episode of DeFi Decoded, Andrew and Alex discuss the situation with Solana. The prominent Layer 1 blockchain was heavily backed by disgraced FTX founder Sam Bankamn Fried. Solana was once dubbed an Ethereum killer and at its zenith had a market capitalization of $70 billion. Today it is fighting for its survival. Andrew explains why the current collapse, while painful, could set up Solana for a new era of more sustainable growth, so long as it can survive in the short term. Then, Andrew gives us his top three predictions for 2023. What are they? Tune in to find out.
Source: Yahoo Finance
#1. Bitcoin Performance Over the Last 8 Years: Buy the Dip?
In six of the last eight years Bitcoin was the best performing asset class. In the other two it was the worst performing asset class. We see the significant volatility in Bitcoin’s annual returns as representative of an early price discovery period, which has similarly occurred in other asset classes and new technologies following their inceptions. Notably, the last time Bitcoin was the worst performing asset class (2018) it went on to lead the pack the next year (2019) returning 92.2%. Will history repeat?

Source: glassnode

#2. Bitcoin Wealth in Flux: Young Coin Supply Contractions Suggest Major Shift in Ownership
A noticeable Bitcoin transfer of wealth is underway. The supply of “Young Coins,” or those held for less than six months, has dropped to levels (4.3 million) not seen in over five years. This contraction often signals that ownership is shifting as new investors and speculators sell their Bitcoin to long-term holders. While transferring wealth to accumulators may temporarily decrease on-chain economic activity, it sets a strong foundation for a future bullish rally to emerge.
Source: glassnode
#3. Stablecoin Exodus: Record Outflows of $5.8 Billion from Exchanges in the Past Month
Stablecoin outflows across exchanges reached a record $5.8 billion in the past month, driven by the FTX collapse and increasing concerns regarding exchanges’ financial health and proof-of-reserves. BUSD saw the most significant drop in exchange supply balance following the recent news that the Department of Justice is split on a decision in their investigation of Binance for unlicensed money transmission, money laundering conspiracy, and criminal sanctions violations. Despite the large outflow from exchanges, stablecoin dominance remains increasingly strong, indicating that investors are holding onto their stablecoins through alternative custodial means.