GM, frens! Ambire here once again with our weekly newsletter. Today, we’ll be talking about how memes are pushing altcoins to the moon, Tether minting another $1B, Japan scrapping its crypto tax, Donald Trump dumping ETH, and CZ ending this year with $25 Billion net worth gains.

This is the last time we see each other this year, so let’s get down to it!

Memes push the alt market to the extreme

Solana (SOL) has been one of the top performers this month, outshining its top L1 blockchain token competitors. While SOL rose a staggering 95% in December, ETH only saw a modest increase of 9.5%. The reason for this? Memes.

The proliferation of airdrops on Solana's blockchain, most importantly airdrops for the memecoins, has significantly boosted daily activity and contributed to its uptick in value. These airdrops have become a popular way for projects to distribute tokens and gain exposure within the community.

But surprisingly, SOL is not the only L1 token that has seen significant growth this month. In fact, there are at least three other major tokens that have surpassed even Solana's impressive gains. Let's take a closer look at these top performers as the year draws to a close.

AVAX, currently ranked as the tenth-largest crypto by market cap, has seen an increase of 104% this month, reaching a value of around $44. This is by degrees higher than SOL's gains.

One possible reason for AVAX's success is the unlocking of 9.54 million AVAX tokens in late November. Despite this influx of new supply, the market has shown strong demand for AVAX, which is particularly notable given Ethereum's rising gas costs. For example, at the beginning of December, Avalanche's median gas cost was only around $0.05 per transaction compared to ETH's $4.66.

Injective Protocol (INJ) has experienced a significant increase of 108% this month, reaching $38.30. This can be attributed to the interest in AI-based tokens, with Injective known to integrate AI with DeFi on its L1 blockchain.

Additionally, INJ has also seen a boost from a trend among "airdrop farmers" who actively move between different blockchains to collect newly-issued token airdrops. Analysts note that multiple projects built on Injective Protocol have confirmed their plans for upcoming airdrops, further adding to the anticipation and demand for INJ tokens.

Near Protocol (NEAR) has seen an even bigger increase of more than 125% this month, reaching a value of $4.20. This surge coincided with a 350% rally of NEKO, a memecoin project associated with Near Protocol that has gained significant traction in December.

NEAR's partnership announcements have also contributed to its price growth, including collaborations with Polygon Labs for developing zkWASM and with U.S.-based IDS Inc. These strategic partnerships have further solidified Near Protocol as a promising L1 blockchain token.

Overall, it seems that memes do have a say in what altcoins experience a price rally, but as we approach 2024, it will be interesting to see if these top performers can maintain their momentum and continue growing alongside other L1 tokens in the ever-changing crypto market landscape.

Tether mints another $1B USDT to ‘replenish inventory’

Tether, the company behind the world's largest stablecoin, has recently minted another billion USDT. This was confirmed by CEO Paolo Ardoino after blockchain tracking tool Whale Alert tweeted on Dec. 25 that Tether Treasury had created 1 billion USDT.

Ardoino responded to the tweet with a public service announcement, clarifying that the transaction was for an "inventory replenish" on the Ethereum blockchain.

According to Ardoino, this is an "authorized but not issued" transaction, which means that the newly created USDT will be stored in Tether's treasury inventory until they are needed for future issuance requests and chain swaps. This process is similar to inventory replenishment in traditional finance, where stocks are ordered from suppliers to meet customer demand without overstocking.

However, Tether's "authorized but not issued" USDT tokens are not included in the USDT's total market cap, as they have not been released into circulation yet. As of Dec. 26, 2023, $925 million in USDT has been authorized but not issued on the Ethereum blockchain, according to data from Tether Transparency.

This is not the first time this happens, in September 2023, when Whale Alert reported another 1 billion USDT minting, Ardoino made a similar announcement, stating that the transaction was an authorization and not an actual issuance. He also mentioned that these newly created USDT tokens would serve as inventory for future issuance requests and chain swaps on the Tron network.

Some critics have questioned the transparency of Tether's "authorized but not issued" transactions, especially with Ardoino's latest PSA. One commenter even asked for more information about the individuals responsible for making such decisions. Others have linked Tether's minting of USDT to price pumps in other crypto assets.

Tether has enjoyed a significant growth in its market capitalization over the past year, reaching new all-time highs in 2023. From January to December, its market value increased by nearly 38%, going from $66 billion to $91 billion.

Japan plans to scrap tax on crypto gains

The government in Japan has approved a revision of its tax regime that could see corporations excluded from paying taxes on unrealized gains from crypto. The new rules, set to take effect in 2024, will apply to companies holding third-party-issued crypto tokens over the long term.

According to media reports, the cabinet approved the revision on Dec. 22, which will see companies only paying taxes on profits generated from the sale of tokens.

Currently, digital assets held by corporations are subject to mark-to-market valuation at the end of each fiscal year. This means that any difference between market value and book value is considered a profit or loss for tax purposes. However, under the proposed revision, this valuation method would no longer apply for long-term crypto holdings.

The revision still needs to be submitted to a regular session of parliament in January 2024 and approved by its Lower and Upper Houses before it becomes law. Should it be passed, companies will no longer have to pay taxes on unrealized gains for long-term crypto holdings. However, this change will not apply to short-term holdings of third-party-issued cryptocurrencies. These will still be subject to year-end unrealized gains taxation.

Analysts say that this would be seen as a welcome move towards promoting the growth of Web3 businesses in Japan.

This is after the country's tax agency clarified in June that crypto issuers would no longer have to pay capital gains tax on unrealized gains. At the time, the Japanese Prime Minister, Fumio Kishida, also reiterated his government's dedication to creating an environment conducive to promoting Web3. He believes that Web3 technology has the potential to transform the traditional internet framework and contribute to social change.

Donald Trump dumps $2.4M worth of Ether

Former President Donald Trump may have stepped down from his role as President of the United States, but he still continues to make headlines, which is especially true with his latest ventures in the world of crypto.

According to blockchain data tracked by Arkham Intelligence, Trump has recently sold off $2.4M worth of ETH.

This doesn’t come as a surprise considering Trump's recent involvement in the NFT market. In December 2021, he released a collection of 45,000 NFTs priced at $99 each, which quickly amassed trading volume of over $35 million. Just a few months later in April 2022, Trump launched another NFT collection with the same price point.

Earlier this month, he unveiled yet another set of digital trading cards with various rewards for fans, including a dinner with the former president himself and a piece of the suit he wore during his arrest in Georgia earlier this year.

Arkham Intelligence said that three weeks ago Trump "started sending ETH to Coinbase after months of accumulating NFT royalties". The firm also revealed that Trump's peak balance was $4 million and so far he has sold 1,075 ETH worth $2.4 million.

The blockchain data tracking company had initially identified digital assets belonging to Trump back in August based on his financial disclosures filed earlier that month. But the recent sales have come as a bit of a surprise, especially given the recent surge in the price of ether, which has pumped by 17% only in the last month.

Despite his involvement in the NFT market, it is important to note that Trump's promotions and drops are handled by NFT INT LLC and not directly owned by him, though he was previously listed as the manager, president, secretary and treasurer of CIC Digital LLC, a company that has provided paid license to use his name, likeness and image for the NFTs.

CZ ends year with $25B net worth gains, topping others

Even though he could be facing jail time next year, Binance's former CEO CZ is finishing this year by being in the black. Bloomberg's Billionaires Index has listed him as this year's top crypto entrepreneur, with his estimated net worth having pumped in 2023 by an insane $25 billion.

Though it’s still a far cry from his peak estimated net worth of nearly $97 billion at the beginning of 2022.

After the crypto market took a major downturn in 2022, BTC has bounced back with a 160% increase this year. As a result, CZ and other prominent crypto entrepreneurs saw their fortunes grow. Coinbase CEO Brian Armstrong and Winklevoss twins Cameron and Tyler have also seen billions of dollars added to their wealth, even though they trail far behind CZ on the list.

Having agreed to pay $4.3 billion in fines to U.S. authorities, CZ managed to end the year with gains that outmatch those penalties by five times. His estimated fortune, which currently stands at over $37 billion, is mainly derived from his controlling stake in Binance, the world's largest CEX that he founded.

Binance's market share may have shrunk this year, but its trading volume has since increased thanks to the market rebound. CZ's estimated wealth of over $37 billion is largely derived from his controlling stake in Binance, as well as his personal holdings in Bitcoin and BNB.

In November, both CZ and Binance pleaded guilty to anti-money laundering and U.S. sanctions violations, resulting in a settlement that allowed the exchange to keep operating. CZ also agreed to pay a $50 million fine and step down as CEO, but he retains his ownership stake in the company. His sentencing is scheduled for February 23, with him expected to receive a maximum of 18 months in prison, as agreed upon in his plea deal.

For some other big names in crypto, this year has also been a profitable one. Coinbase's CEO Brian Armstrong has seen his wealth increase by $5.8 billion in 2023 to a total of $7.2 billion, with Coinbase's shares rising almost 400% this year alone. Meanwhile, co-founder Fred Ehrsam's estimated wealth has also increased by $1.8 billion to a total of $2.5 billion.

The Winklevoss twins, who founded the Gemini crypto exchange and have amassed millions in Bitcoin holdings, saw their wealth increase by $1.4 billion each this year to a total of $2.7 billion. However, their exchange is currently facing lawsuits and allegations from the SEC and New York Attorney General for allegedly defrauding customers.

Barry Silbert, founder of Digital Currency Group (DCG), saw his wealth grow by $1.5 billion this year to an estimated $2 billion. DCG has been selling off or closing businesses in the past year after its subsidiary Genesis filed for bankruptcy. On the other hand, former FTX CEO and convicted fraudster Sam Bankman-Fried's net worth has remained at $0 after peaking at $25.9 billion in March of last year.

Other worthy reads

A thread on VC activity by Crypto Koryo:

Current metas list from Prithvir:

An interesting L2 report by Coin98:

The fun page

That's all for now, frens.

We'll see you in 2024. And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Have a fantastic holiday and cheers!

Yours, The 🔥 Team

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