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This Week in Crypto: Wen US$30K?

BTC teased US$24,000. Also, Chainalysis is reducing its headcount, Elon wants crypto payments on Twitter, and more.

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Bitcoin and other cryptocurrencies continued their ascent, with the world's largest cryptocurrency teasing US$24,000 before paring gains.

At the time of writing, Bitcoin (BTC) is trading at US$23,459.96 (-1.93%) while Ethereum (ETH) is trading at US$1,639.14 (-1.99%). Major altcoins such as BNB, Polkadot (DOT), and Avalanche (AVAX) have also been trading in red within the same period.

BTC has been enjoying a stellar month, with the preeminent cryptocurrency climbing nearly 40% since the start of the year. As previously highlighted, if BTC can break the US$25,000 resistance level, then investors should expect a clear path towards US$30,000.

"Bitcoin has done very well in a much improved risk environment so far this year and it has taken another step in the right direction over the last 24 hours, hitting a new 6-month high in the process. It now faces significant resistance around $24,500-$25,500, a break of which could give it a massive psychological lift," said Oanda's Craig Erlam on Thursday.

Meanwhile, the broader financial markets also continued its positive momentum, with the S&P 500 and the tech-heavy Nasdaq Composite advancing 1.47% and 3.25% respectively on Thursday. Investors were buoyed by the FOMC's 25bps rate hike that was announced on Wednesday, and are now hopeful that Federal Reserve is slowing down its aggressive rate hikes campaign.

However, it's important to remember that interest rates have jumped from 0% to over 4% in 2022 and is set to rise further in 2023, which means that investors should still err on the side of caution, especially given how the Feds have given no indication of an upcoming pause in rate hikes. The CPI data slated to be released on Feb 14 will also give the markets a more accurate indication of how effective the rate hikes have been.

“It’s very difficult to manage the risk of doing too little and finding out in six or 12 months that we actually were close but didn’t get the job done, and inflation springs back,” Fed chair Jerome Powell said on Wednesday.

“We will need substantially more evidence that inflation is ebbing to be confident that it’s moving back toward the target," he added.

Chainalysis reduces headcount

Blockchain analytics company Chainalysis has announced that it will be laying off 44 of its 900 employees, or 4.8% of its headcount.

"Chainalysis announced a reorganization on Wednesday – primarily impacting our go-to-market team – in order to meet new challenges and opportunities in the market. As a part of this reorg, some folks will have new roles, responsibilities, and reporting lines. Unfortunately we will also part ways with some incredibly talented people within our team. Chainalysis is well capitalized and will continue to hire and build out teams aligned with our refocused strategy in 2023," the firm told media outlets on Thursday.

Founded in 2014, Chainalysis, whose backers include Singapore’s sovereign wealth fund GIC, provides data research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in over 75 countries. Its customers include the UN Office on Drugs and Crime, financial institutions like BNY Mellon, and cryptocurrency businesses like Gemini and Bitpay.

Rising interest rates and the implosion of some of crypto's biggest names have wiped more than a trillion dollars from the crypto industry, resulting in a fresh wave of job cuts. Data compiled by Coindesk indicates that more than 28,000 crypto jobs have been lost as of January 10.

Tesla records loss while hodling BTC

EV giant Tesla recorded a US$204 million impairment loss in 2022 on BTC holdings, according to regulatory filings. The loss was offset by US$64 million in profits from BTC trading, leaving Elon Musk's company with a net loss of US$140 million.

According to Tesla's Q4 report released last week, the company did not buy or sell any BTC for the second quarter in row, after it offloaded 75% of its BTC holdings in Q2. At the time of the sale, Tesla CEO Elon Musk said that the move was to “prove liquidity of Bitcoin as an alternative to holding cash on a balance sheet.”

The documents also show that Tesla is holding on to US$184 million worth of digital assets as of December 31, down from US$218 million due to crypto market's decline.

Elsewhere, software analytics firm Microstrategy purchased 8,813 bitcoins during the market crash in 2022, taking a US$1.28 billion impairment loss for the year.

According to Microstrategy's fourth quarter report on Thursday, the firm spent a total of US$3.9 billion to buy 132,500 bitcoins at an average price of US$30,137. Its BTC stash is now worth approximately US$3.16 billion.  

BTC is currently trading below US$25,000, down nearly 40% since the start of last year.

Elon pushes for crypto payments on Twitter

According to a report by Financial Times, Tesla CEO and self-proclaimed Dogefather Elon Musk is pushing to enable Twitter users to purchase good and services and send money to each other on Twitter.

The report, which cited people familiar with the matter, mentioned that the social media platform has begun applying for regulatory licences across the US and designing the software required to introduce fintech services.

It also stated that Musk wants the payments system within Twitter to focus on fiat currencies first, but crypto functionality could be introduced at a latter stage.

FTX sues Voyager

Bankrupt crypto exchange FTX sued fellow bankrupt crypto company Voyager Digital on Monday, as it seeks to reclaim US$445.8 million in loan repayments that FTX made before its eventual collapse in November.

Voyager Digital, a crypto lending platform, filed for bankruptcy in July, four months before FTX's bankruptcy filing. In a court filing, FTX said that it repaid Voyager US$248.8 million in September and US$193.9 million in October, along with a US$3.2 million interest payment in October, after Voyager demanded repayment of all outstanding loans to FTX and its affiliate hedge fund Alameda Research.

However, FTX is claiming that since the loan payments were close to its own bankruptcy filing, the company is eligible for a clawback which will allow it to use the funds to repay other FTX creditors. The claim has since been rejected by the creditor's committee and Voyager itself.

Last month, it was reported that Binance US is acquiring Voyager Digital’s assets with an offer of US$1.022 billion. The deal is set to close on 18 April 2023. Binance will make a US$10m deposit in good faith and will reimburse Voyager for expenses up to a maximum of US$15m.

Trading Volume

According to data from CoinMarketCap, the global crypto market cap stands at US$1.08 trillion, a 1.18% decrease since yesterday. The total crypto market volume over the last 24 hours is US$61.18B billion, a 0.34% increase.

Fear & Greed Index

The index uses 5-6 measurements to assess the current sentiment of the market and then rates that level of emotion on a scale of 1-100 – 1 is extreme fear and 100 is extreme greed.

Risk appetites in crypto continue to surge – the Crypto Fear and Greed Index currently stands at 60, indicating “greed." Sentiment has improved significantly since the FTX implosion in November, during which the index fell to the low twenties.