Ethereum’s Dencun Upgrade Stumbles on Testnet Launch

Ethereum’s Dencun upgrade launched on the Goerli testnet but failed to finalize due to low participation and outdated validators. Developers expect to address the issues soon. Dencun aims to introduce a cost-effective data storage method called “proto-danksharding” through EIP-4844 to improve data availability and reduce transaction costs for layer-2 blockchains. 

This marks Ethereum’s significant upgrade since the Shapella upgrade last March, which enabled staked ETH withdrawals and signaled a shift to a proof-of-stake blockchain. The next phases involve upgrades to the Sepolia and Holesky testnets.

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Investors Pull $1.1B from GBTC as ARK Launches Bitcoin ETF

Around $1.1 billion has exited Grayscale’s Bitcoin ETF in three days as its discount narrowed. On January 16th alone, approximately $594 million was withdrawn. Other newly launched Bitcoin ETFs saw inflows, but it is unclear if they offset Grayscale’s outflows. Previously, investors profited from Grayscale’s premium, which reached 43% in July 2019, but the arbitrage opportunity vanished when the premium became a discount in February 2021. With Grayscale’s shift to a spot ETF, the discount has dropped to as low as 1.55%, prompting long-term investors to exit. This represents about 27,000 Bitcoins at the current price of $42,800. 

Meanwhile, ARK Invest has begun accumulating its ARK 21Shares Bitcoin ETF and selling shares in other tech-focused ETFs, holding 2,535 Bitcoins worth over $109 million, ranking fifth among spot Bitcoin ETFs.

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Chainlink and Circle Collaborate for Cross-Chain Transfers

Chainlink has partnered with Circle to enhance cross-chain stablecoin transfers, specifically focusing on the USDC stablecoin. This collaboration integrates Circle’s Cross-Chain Transfer Protocol (CCTP) with Chainlink’s Cross-Chain Interoperability Protocol (CCIP). This development enables developers to create applications involving USDC transfers across multiple blockchain platforms, including Ethereum, Arbitrum, Optimism, Avalanche, and Base, with plans to expand further. This initiative marks a significant step in facilitating seamless and secure cross-chain financial interactions in the DeFi space.

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IRS Suspends Reporting of Crypto Transactions Over $10,000

The IRS has announced a temporary suspension of the requirement for businesses to report cryptocurrency transactions worth over $10,000 as cash. This decision comes despite the Infrastructure Investment and Jobs Act, effective from January 1, mandating such reporting. This pause will remain until new regulations are established, addressing the complexities of digital asset transactions. 

The move is partly in response to a lawsuit by CoinCenter, a crypto advocacy group, which contends that the rule would lead to excessive surveillance on Americans. The IRS plans to issue proposed regulations, inviting public comments and potentially a public hearing. 

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Other breaking news

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• Vitalik Buterin: Celestia L2s Are Validiums, Not Rollups
• Core Scientific Confirms Bankruptcy Court Approval of Its Reorganization Plan
• Hacker Steals $3.3M from Bungee Crypto Bridge Users
• Supreme Court Ends Epic Games’ Battle with Apple

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