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1inch wallet buys $10M in ETH following a $3.7M profit streak in July
A crypto wallet belonging to the 1inch Investment Fund has bought huge amounts of Ether a month after recently cashing out on its dollar-cost averaging (DCA) buys throughout the first quarter of 2023.
Blockchain analysis platform Lookonchain, which follows and posts smart profitable trades, flagged the transaction. According to the firm, the 1inch-affiliated wallet bought a total of 6,088 ETH at the price of $1,655, which means that the company spent over $10 million on the purchase.
The trade comes after the company cashed out and profited from its earlier moves on the ETH asset. According to blockchain data, the wallet bought around 17,000 ETH at an average price of $1,569 on three instances — on Jan. 13, Feb. 9 and March 14. The company spent around $26 million in total on the trades.
When the price of Ether went up to $1,906 on July 5, the wallet sold around 11,000 ETH for a total of $21 million. This puts the profit of the wallet at $3.7 million from the Ether trades alone. The wallet currently holds a total of $80 million worth of various digital assets.
On Aug. 18, a crypto whale dumped $41 million of ETH days before the recent market downturn. Earlier this month, the crypto trader deposited 22,341 ETH into the Binance exchange and withdrew around $41 million afterward. The trader suffered around $1.7 million in losses but managed to avoid a potential $5-million loss.
Meanwhile, Fenix International, the parent company of subscription platform OnlyFans, bought $20 million of ETH back in 2022. According to a filing to the United Kingdom corporate registry, the company spent $20 million in ETH between 2021 and 2022. However, by the end of November 2022, the investment was only worth around $8.5 million.
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FTX suspends user accounts amid Kroll cyber breach concerns
Following the recent Kroll cybersecurity breach, bankrupt crypto exchange FTX has temporarily suspended accounts of impacted users accessing its claims portal.
FTX announced the decision on X (formerly Twitter) as a proactive measure to prevent future incidents or additional harm following the recent hack.
Users were strongly advised against modifying their claims or altering the accepted schedules in response to the incident. FTX stated that all claim data submitted through the Kroll customer claims portal remains secure and valid.
Kroll — the appointed claims and noticing agent for FTX’s ongoing bankruptcy proceedings — was subject to a breach that exposed non-sensitive data associated with claimants involved in the bankruptcy case. In response, Kroll provided FTX with reassurances regarding its active management of the situation and its continued oversight. FTX subsequently offered substantiation of this assurance by verifying that the breach had no impact on the security of account passwords, internal systems or financial funds.
Kroll is directly informing impacted individuals about precautionary steps for self-protection. FTX clarified that Kroll did not handle FTX account passwords and that FTX’s internal systems remained unaffected.
Nevertheless, blockchain analyst ZachXBT verified that phishing emails have started reaching FTX customers, suggesting their personal data may have been compromised.
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Judge to hear Sam Bankman-Fried's defense against 4M pages of newly released evidence
A federal judge will hear Sam Bankman-Fried's defense argument against a newly released batch of evidence provided by the U.S. Department of Justice (DoJ) on Aug. 25. According to Bankman-Fried's attorneys, an additional 4 million pages of discovery were released less than six weeks before his trial, scheduled for October 3.
Judge Lewis Kaplan issued an order on Aug. 26 requesting the government to respond to letters from the Bankman-Fried's legal team regarding his appropriate access to discovery materials, and an order to prevent the government from using evidence produced after July 1.
According to Bankman-Fried's attorneys:
"We further object to the Government’s production, just yesterday, of an additional 4 million pages of discovery. The Government cannot be allowed to dump millions of pages on the defense less than six weeks before trial, [...] For the reasons already discussed in our motions in limine, ECF No. 206, the Government should be precluded from using any such evidence at trial."
Today's decision allows Bankman-Fried's legal counsel to present its arguments in a videoconference hearing on Aug. 30.
Bankman-Fried is accused of misappropriating user funds for investments, personal expenses, and political campaign donations. A total of 12 criminal counts have been laid against the former FTX CEO, to be heard in two trials beginning in October 2023 and March 2024.
Earlier this week, Bankman-Fried pleaded not guilty to fraud and money laundering charges levied in an updated indictment by prosecutors. During the hearing, his lawyers argued for better treatment for him in Brooklyn's Metropolitan Detention Center, where he has been since his bailwas revoked on Aug. 11.
According to his attorneys, Bankman-Fried has been forced to rely on a diet of bread, peanut butter and water due to the lack of vegan options provided by the prison. His counsel also raised concerns regarding his medical needs, sharing that he has not received his medication since being jailed.
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Ethereum Staking Flourishes While Value of DeFi Assets Shrinks – What's Going On?
Ethereum (ETH) staking has been flourishing through protocols like Lido and Coinbase's staking service even as the value of DeFi assets continues to decline.
Over the past year, the crypto sector has experienced a series of setbacks, including failures of centralized crypto exchanges and services, which has also led to capital outflows from the DeFi space.
According to data from DefiLlama, the total value locked (TVL) within DeFi protocols across various chains now stands at under $38 billion, a significant drop from the industry's peak in November 2021 when the TVL reached $178 billion.
It is worth noting that the current TVL figure falls even below the total value locked shortly after the collapse of centralized exchange FTX in November 2022, which caused a two-year low in the assets locked within DeFi protocols.
The market did witness a recovery in April, with the TVL rising back to approximately $50 billion.
However, since then, the metric has retraced back to below $38 billion, even though the underlying crypto values have not experienced significant declines during this period.
Meanwhile, the $38 billion figure does not include funds locked in liquid staking protocols like Lido.
Since the collapse of FTX, Lido has seen a substantial increasein its TVL from $6 billion to $13.95 billion.
According to DeFiLlama, these protocols "deposit into another protocol," which explains why they are not included in the total TVL tally.
Likewise, Coinbase's staking service, launched in September 2022, has accumulated an additional $2.1 billion worth of Ethereum, bringing the total assets held by such services to $20.2 billion.
Liquid staking allows investors to stake their assets and earn yield while still enjoying trading liquidity through pegged assets issued by the staking provider, such as cbETH and stETH.
This alternative can be more attractive to investors than using lending protocols like Aave, which require users to lock their tokens and potentially expose themselves to unwanted protocol risks.
As of now, Aave's ETH and USDC yield rates are 1.63% and 2.43%, respectively, compared to Coinbase's more lucrative rates of 3.65% for ETH and 4.5% for USDC.
Meanwhile, the decline in the TVL of several DeFi platforms over the past month is also worth noting.
Aave's TVL has fallen by 21% to $4.5 billion, while Curve Finance has experienced a 26% decline to $2.3 billion.
One potential factor contributing to this decline could be the hawkish monetary policy of the United States Federal Reserve.
This policy has resulted in higher yields on short-term government debt, making it a more attractive option for investors compared to stablecoin yields within the DeFi space.
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Tether Reserves Report: USDT Maintains Dominance With $86.1 Billion Total Assets, Over 100% Reserve-Backed
Stablecoin issuer Tether posts its total assets at $86.1 billion as it maintains its leading market share despite growing competition and uncertain regulatory conditions.
In the company’s reserve report, while total assets stood at $86.1 billion, its liabilities amounted to $82.8 billion. Liabilities include user assets held in USDT across multiple networks.
This report shows the company’s stability as its reserves are over 100%. In total, the company posted a liquidity cushion of $3.2 billion signifying a surplus to the delight of the community.
The issuer’s $3.29 billion surplus is shareholder capital which is held on multiple networks, over 15 as explained in the statement.
Across the networks, Solana has a value pre-authorization of $1.57 billion with Ethereum and Tron coming next with $617 million and $353 million.
In recent years, Tether has come under regulatory scrutiny for allegedly sharing untrue financial statements resulting in a $41 million fine by the Commodity Futures Trading Commission (CFTC) in Oct 2021.
Those events led to users' fear which heightened with the collapse of the Terra Network following the failure of its algorithm-backed stablecoin in April 2022.
On the bright side, Tether's previous transparency reports have not been questioned by regulators leading to its growing popularity among investors even in the wake of new competition.
Per the report, USDT is the only stablecoin under Tether that boasts of excess reserves above its liabilities. The other assets, CNHT, XAUT, MNXT, and EURT cannot keep up the 1:1 peg with its balance in the event of a crisis.
USDT leads the pack
USDT has led the stablecoin market for a long time keeping its competition in the shadows amid regulatory concerns.
In the company’s Q2 report, it reported a profit of $850, a 30% quarter-on-quarter increase bringing its reserves over $3.2 billion.
In June, the company hit an all-time high as its market cap soared above $83 billion with competitors struggling to stay above the water. USD Circle stands in second place in terms of market cap with $28.8 billion, a staggering $50 billion behind USDT.
The dominance of USDT can be noted in the recent slump of USDC which recorded a market cap of 55.8 billion in June 2022. The stablecoin has faced recent headwinds including losing its peg earlier in the year after the Silvergate Bank saga.
Binance USD, (BUSD) currently has a market cap of $5 billion with its CEO Changpeng Zhao highlighting the regulatory cap of BUSD by the New York Department of Financial Services at $23 billion as a key reason for the surge of USDT.
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XRP whale moves 29 million tokens to Bitstamp amid price slide
As XRP struggles to maintain upward momentum following Judge Analisa Torres’ summary judgement in the United States Securities Exchange Commission v. Ripple Labs case that XRP isn’t a security, investors appear to be selling off their holdings. Adding to this, a significant whale has moved 29 million XRP, valued at over $15 million, to a crypto exchange amid a price decline approaching the support level.
Whale Alert posted on Aug. 24 that a large holder transferred 29.3 million XRP worth $15.13 million to Bitstamp exchange. Additional information suggests the possibility that this whale might be selling their XRP assets, as it had previously moved 14 million XRP to Bitso just a few hours earlier.
The decision by Judge Torres to permit the U.S. SEC to submit an interlocutory appeal regarding XRP token sales had a significant impact, triggering a notable market downturn. This led to a sharp decline in XRP’s price, breaching crucial support levels of $0.6 and $0.5.
Presently, XRP’s price is recovering from the support level at $0.5, but there is a substantial risk of a significant drop if traders and whales opt to liquidate their holdings.
In the meantime, the trial between Ripple and the SEC is anticipated to occur around the end of April or mid-May. This timing aligns with the court notification from both the SEC and Ripple Labs, along with CEO Brad Garlinghouse and executive chairman Chris Larsen, who cited their unavailability in the second quarter of 2024. In response, XRP’s price experienced a rebound; however, the bullish momentum was not sustained.
Over the past 24 hours, the value of XRP declinedby over 3% and is currently trading at $0.51. The price fluctuated between $0.510 and $0.528 within this period. Additionally, the trading volume has witnessed a decrease in the past 24 hours.
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SEC v. Ripple: Attorneys leave SEC side, both groups add new lawyers
Multiple attorneys have moved in and out of the lawsuit between Ripple Labs, its executives and the United States Securities and Exchange Commission, as signified by court filings on Aug. 23.
The latest motions filed were requesting permission to withdraw attorneys Richard Best and Robert MacDonald Moye from the trial, with the former having the motion immediately granted due to extended medical leave. Moye’s withdrawal is still pending a decision from Judge Analisa Torres.
Earlier the same day, a motion was filed for attorney Pascale Guerrier to be dismissed from the case. This request was also promptly granted by the judge.
In a game of legal musical chairs, also on Aug. 23, Judge Torres approved attorney Michael A. Schulman for Brad Garlinghouse, CEO of Ripple, along with attorneys Marc J. Jones and Peter Bryan Moores to represent the SEC.
In response to the changes, the crypto community has taken its opinions to social media.
Some users remarked that the attorneys leaving the side of the SEC “don’t want their name tied to the wrong side of history.” Another commented on the timing, saying:
However, some don’t find the situation as pressing. Prominent crypto lawyer John E. Deaton responded that these changes “mean nothing” in the grand scheme of the case.
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Bitcoin difficulty jumps 6% to new peak as miners ignore BTC price dip
Bitcoin network fundamentals are in no mood to follow bearish BTC price action this week.
The latest on-chain data confirms that difficulty has hit new all-time highs, with hash rate not far behind.
Bitcoin mining difficulty ends slump
Despite BTC/USD dropping 10% last week, Bitcoin miners appear to be taking the price downturn in their stride.
This was cemented in network activity on Aug. 22, as difficulty increased by 6.17% at its latest biweekly automated readjustment.
Not only was this enough to take difficulty to new record highs, but it also marked Bitcoin’s sixth-largest difficulty uptick of 2023, figures from monitoring resource BTC.com show.
Difficulty is a reflection of both miner competition and Bitcoin network security, and its upward trajectory suggests that miners are not yet struggling when it comes to profitability.
The next automated readjustment is already due to continue the trend, taking difficulty over 56 trillion for the first time.
Hash rate shows “high confidence” in BTC
A similar story concerns hash rate — the estimated hashing deployment by miners to the Bitcoin blockchain.
While not possible to calculate exactly, depending on the source, hash rate is already challenging existing all-time highs of over 400 exahashes per second (EH/s).
Responding to the data, MAC_D, a contributor to on-chain analytics platform CryptoQuant, referenced “high confidence in the security and reliability” among network participants for both Bitcoin and the largest altcoin Ether.
“Recently, the prices of BTC and ETH have fallen by -10%. However, the network security and reliability have increased. First, the BTC hashrate (SMA 14) shows higher figures during the decline, which shows that miners are more active in BTC mining. Second, the ETH staking rate (%) shows that more ETH has been staked even though the price has fallen,” he wrote in a Quicktake market update on Aug. 22.
“This means that investors have high confidence in the security and reliability of the BTC and ETH networks. The fact that the price has fallen despite the increase in the intrinsic value of the two assets means that they are undervalued, and it can be considered a time to actively accumulate assets.”
Separate data from on-chain analytics firm Glassnode shows little tangible change in the amount of BTC held by mining entities.
This stood at just over 1.83 million BTC as of Aug. 22, up by a steady 0.08% since the start of the month.
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Bitcoin is in ‘new bull cycle’ — Metric that bottomed before 70% gains
The Bitcoin metric that nailed the pit of the 2022 bear market says its uptrend is still intact.
In an X post on Aug. 22, creator of on-chain analytics platform LookIntoBitcoin shared some good news in the form of Bitcoin’s Realized Cap HODL Waves (RHODL).
Analyst: “New money” flowing into Bitcoin in 2023
While last week’s 10% BTC price dip has upended some of the on-chain landscape, RHODL is one of the metrics taking a longer-term view of what remains a timely bull market.
The metric takes existing HODL Waves data, which groups the BTC supply by when each coin or, specifically, unspent transaction outputs, last moved, and weights it by realized price — i.e., the price at which it last moved.
If this sounds complicated, the results have clear implications.
“Peaks in younger age bands highlight periods where they have a proportionally higher Realized Value weighting relative to the older Realized Value age bands,” Philip Swift explained in an introduction on LookIntoBitcoin.
“This is important to note as it indicates that the market is prepared to pay higher values for bitcoin today and in recent times, versus historical norms. This can be a good indicator that the market is becoming overheated.”
Currently, bands of coins that last moved three to six months ago are rising — a phenomenon common to the start of Bitcoin’s previous bull markets.
On the topic of the August drawdown on BTC/USD, Swift thus concluded that “the recent price dip is in the context of a much bigger bull trend.”
“3–6 month band trending up as new money comes back into the market = new bull cycle,” he summarized.
Charting the return of BTC price “euphoria”
RHODL has an impressive record when it comes to BTC price phases.
In December 2022, when BTC/USD was circling its two-year lows of $15,600, Swift used the metric to call the end of “euphoria” among Bitcoin’s speculative investor cohort, which he labeled “tourists.”
He stated at the time that the market is likely now at cycle lows, which means maximum risk-reward opportunity.
Beginning in January this year, Bitcoin began a new uptrend that delivered 70% gains in Q1 alone.
Since then, investor composition has changed, with short-term holders (STHs) — entities holding BTC for 155 days or less — reducing their overall exposure to their lowest since November 2021.
The latest dip nonetheless increased pressure on those remaining speculators, with almost 90% of STH coins now held at an unrealized loss.
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Bitcoin price taps 3-week lows as SEC fears liquidate $250M of crypto longs
Bitcoin fell to bearish target zones on Feb. 10 as bulls failed to hold important support above $22,000.
Crypto wipeout mounts as BTC price loses $22,000
Data showed BTC/USD dropping to $21,633 on Bitstamp.
The pair reacted badly to regulatory fears from the United States but had already faced days of bearish sentiment, with traders expecting a retest of $21,000 or even lower.
At the time of writing, Bitcoin traded at around $21,800, down around 7% in February so far.
“Bear market back or are we just having a slight correction?” contributor Michaël van de Poppe, founder and CEO of trading firm Eight, queried on the day.
Some were busy with short positions as BTC price action conformed to expectations, with popular trader Crypto Tony eyeing $21,400 as a potential bounce zone should losses continue to materialize.
“Profit coming in nice on the short and my next target is the support cluster at $21,400. If we see a retest of $22,300 then this could be your chance to get in, upon a failed retest,” he wrote in part of commentary alongside an explanatory chart.
Those remaining in long positions thus felt intense pain overnight. According to data from data resource Coinglass, long liquidations for Bitcoin alone totaled $64.6 million for Feb. 9.
On-Chain College, a contributor at analytics platform CryptoQuant, noted that these included $24.3 million in a single hourly candle — the most since the FTX crash in early November 2022.
Feb. 9 liquidated $254 million in longs, including altcoins.
Analyst looks for $16,000 bottom “confirmation”
Looking beyond immediate price performance, fellow CryptoQuant contributor Venturefounder focused on whether the macro bottom was really in for Bitcoin.
If BTC/USD were to preserve the 200-day moving average (DMA) near $20,000 — or even $19,000 — as support, he argued on the day, it may be more significant implications for price action.
BTC/USD saw two-year lows just under $16,000 in the FTX aftermath, levels which at the time sparked mass calls for a trip to $12,000.
“A retest of $19-$20k Bitcoin (200DMA zone) would be very appropriate here,“ Venturefounder wrote in a Twitter thread.
A further post argued, “Holding the $19-20k during this correction would be the first confirmation that $16k was the Bitcoin cycle bottom.“
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Ethereum NFT collections lost nearly 60% of their market cap in 2022: Report
A survey of 81 nonfungible token (NFT) collections on the Ethereum blockchain showed a sharp overall loss in market capitalization in 2022, according to a report from DappRadar released Feb. 9. Losses were not evenly distributed, however.
The Ethereum NFT market was worth $9.3 billion at the beginning of 2022, according to DappRadar’s valuation, and that figure dropped to $3.7 billion by year-end — a loss of 59.6%. The price of Ether impacted the valuations:
“It is also important to consider that ETH lost 60% of its value last year, which had a strong influence on the value of the NFTs.”
The NFT market peaked in February 2022 at $19.1 billion, outperforming Bitcoin and Ether until the Terra collapse in May. By the following month, NFTs had lost 88% of their value. The market hit its year low at $2.2 billion at the end of November, the month of the FTX collapse. The market finished the year up 68% from that low. The report notes:
“This retraction of the NFT market was not a reflection of NFT’s utility, but rather a result of bad actors and market manipulations.”
Yuga Labs accounted for two-thirds of the market in 2022, with its CryptoPunks and Bored Ape Yacht Club collections holding 46.7% of the market by themselves. The Otherdeed collection was Yuga Labs’ loss leader, falling 86.15%.
The Azuki, Pudgy Penguins and Degen Toonz collections were the only ones “launched in 2021 or early 2022 to experience significant market cap growth,” rising 113.89%, 260% and 204%, respectively.
NFT collections launched after the Terra collapse fared better. The report cites Potatoz (+134.68%), Renga (+211.63%), DigiDaigaku (+209.88%) and God Hates NFTees (+1,653.28%) as examples.
The report also traced the declining share of collectibles in the NFT market share. Collectibles started 2022 with over 90% of the market but held well below 75% of it in January 2023. Trading volume for NFTs in January 2023 amounted to $870 million.
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Bitcoin price hits 2-week low amid warning $22.5K loss means fresh dip
Bitcoin stayed lower at the Feb. 9 Wall Street open as a sweep of local lows increased bets of a more serious comedown.
Trader: "Something feels off" about BTC strength
Data followed BTC/USD as it traded around $22,700 on Bitstamp.
The pair had dipped to $22,378 earlier in the day, this marking its lowest levels since Jan. 25 and a reinforcement of $22,400 as an important zone to watch.
“We tapped the swing low at $22,500 followed by a bounce. I would look for the bears to escalate the drop once we lose that low,” popular trader Crypto Tony summarized in part of Twitter coverage.
Fellow trader Crypto Chase likewise forecast that Bitcoin was “More likely to go lower if 22.3k is tagged.”
In an update to analysis from Feb. 8, fellow Twitter account TraderSZ showed Bitcoin dropping below $23,000, which he had warned would mean “moving hard lower.”
“BTC - clean break below dashed line then I think we get moving hard lower. Expansion phase very soon,” he wrote at the time.
“It’s still support for now, but idk something feels off. Im@happy to catch something above jan high if market rips higher. Gut feel says lower first.”
United States equities were marginally higher at the open, while the U.S. dollar index (DXY) saw a comedown on the day, dropping back below the 103 mark.
"The dollar looks washed," trader and podcast host Scott Melker, known as "The Wolf of All Streets," reacted, arguing that DXY weakness could continue to serve risk assets.
"Classic retest of strong support as resistance at 103.82. Also starting to look like a potential head and shoulders top. Lots of signals that this little bull run will continue."
Sellers cement $22,800 resistance
The day's U.S. macroeconomic data meanwhile had little perceptible impact on crypto markets.
This came in the form of jobless claims, which at 196,000 neared one-year highs and beat expectations by 6,000 — the "hot" result analysis argued was being hoped for by the Federal Reserve.
Weaker employment data notionally bolsters the idea that restrictive economic conditions are working, and a reversal could thus be on the cards sooner.
"Jobless claims 196k, but four-week average still trending toward historic lows," CNBC host Carl Quintanilla additionally noted.
The week prior had seen blockbuster jobs data capture the lowest U.S. unemployment since the late 1960s.
Immediately prior to the report being issued, the composition of the BTC/USD order book on Binance showed resistance strengthening at $22,800.
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Getting rid of crypto staking would be a 'terrible path' for the US — Coinbase CEO
The CEO and co-founder of cryptocurrency exchange Coinbase, Brian Armstrong, believes that banning retail crypto staking in the United States would be a "terrible" move by the country's regulators.
Armstrong made the comments in a Feb. 9 Twitter thread which has already been viewed over 2.2 million times, after noting they've heard “rumors” that the U.S. Securities and Exchange Commission “would like to get rid of crypto staking” for retail customers.
“I hope that's not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen.”
Armstrong did not share where the rumors originated but noted that staking was “a really important innovation in crypto.”
“Staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints,” he added.
Armstrong also referenced an Oct. 5 blog post from crypto investment firm Paradigm, which argued that Ethereum’s transition to proof-of-stake and its subsequent “staking” model does not make it a security.
The Paradigm post came just a few weeks after SEC Chairman Gary Gensler suggested that proof-of-stake (PoS) cryptocurrencies could trigger securities laws. He made the remarks Sept. 15, while speaking to reporters after a Senate Banking Committee meeting.
Armstrong also lambasted the current lack of regulatory clarity in the U.S. and subsequent “regulation by enforcement” that he says is driving companies offshore, such as crypto exchange FTX.
He has reiterated calls for regulation that provides clear rules for the industry while preserving innovation.
According to Staking Rewards, the top four staked cryptocurrencies by market cap account for over $55 billion in staked assets, suggesting a country-wide ban would be a huge hit to the country’s crypto industry, which has already seen an exodus of crypto-related businesses.
Some industry commentators have suggested that the SEC might go after centralized parties that offer staking services rather than the technology itself, believing the attacking the latter would be a losing battle that would “crush them in precedent.”
The general counsel for Delphi Digital’s research and development arm, Gabriel Shapiro, suggested there is a strong argument that staking services provided by centralized exchanges like Coinbase constitute a security, drawing parallels between them and other “Earn” products.
Coinbase is currently subject to an ongoing SEC probe, which Coinbase revealed in an Aug. 9 SEC filing was in relation to its staking rewards amongst other offerings.
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BTC price metric that cued biggest Bitcoin bull runs breaks out at $23K
A little-known Bitcoin price metric has just given a new bull run signal — and it has never been wrong.
As noted on Feb. 8 by Caleb Franzen, senior market analyst at Cubic Analytics, the Williams %R oscillator has left its bottom zone for the first time since May 2022.
Analyst: Oscillator crossover is a “great sign”
Bitcoin gaining 40% in January and continuing to hold higher levels has produced breakout signals across various on-chain indicators.
Some analysts are cautious, opting to wait and see if the improved conditions last, but for Franzen, the data coming from the Williams %R oscillator is of particular interest.
Williams %R is a momentum oscillator that measures how near BTC/USD is to its recent highs or lows. Momentum oscillators are utilized to measure the strength of a price trend, and Bitcoin’s January performance has made it a prime test case.
“Bitcoin’s 12-month Williams%R oscillator left the ‘oversold’ threshold as of January’s monthly close!” Franzen wrote in part of a dedicated Twitter thread.
“Historically, leaving the lower-bound has signaled two things: 1. The cycle lows are in. 2. The bear market is over.”
He added that the phenomenon was a “great sign” while acknowledging that a bull run was not guaranteed.
An accompanying chart nonetheless showed the tight relationship between such Williams %R threshold crosses and subsequent long-term BTC price behavior.
The last, for example, came in April 2019, with BTC/USD then beginning its journey out of its bear market lows to ultimately hit all-time highs in November 2021.
A “caveat,” meanwhile, comes in the form of varying timeframes for Williams %R. Franzen noted that only the 12-month iteration of the metric had flipped bullish, with the 18-month version remaining “oversold.”
“If/when this crosses > oversold, it will add to the bull case,” he added.
Signs of Bitcoin rebirth come thick and fast
Franzen is far from alone in keeping the faith when it comes to current BTC price action.
Over the weekend, popular trader Credible Crypto described the status quo as “identical” to Bitcoin’s late-2020 breakout that saw it cross its prior all-time high from 2017.
Encouraging signs have also come from macroeconomic sources, notably the United States Federal Reserve, as well as internal phenomena such as the long-awaited “golden cross” event on the daily chart.
January, meanwhile, saw a renewed influx of institutional cash into Bitcoin, which took the majority of resources as investors shied away from many altcoin products. Weekly inflows for the last week of the month were the highest in seven months.
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OKX and Bybit remove sanctioned Russian banks from payments list
At least two major crypto exchanges followed Binance by excluding Russian banks under international financial sanctions from their payment options. Tinkoff Bank and Sberbank are no longer available on the list of peer-to-peer (P2P) transactions on Bybit and OKX.
According to Russian media, local users can no longer receive fiat money in exchange for their crypto on Tinkoff Bank or Sberbank accounts on the P2P platforms of OKX and Bybit. No official announcements by the representatives of either company were made in official channels.
However, at the time of publication, OKX still allows users to receive fiat to their accounts of the Russian branch of Raiffeisen Bank and the Russian Standard Bank. Both financial institutions aren’t included in the list of entities under sanctions by the United States Treasury.
The new wave of attention to the presence of sanctioned Russian banks on the crypto exchanges’ payments option arose last week when The Wall Street Journal reported that Binance listed Tinkoff Bank and Sberbank as transfer methods. On Aug. 24, Tinkoff and Sberbank disappeared from the Binance P2P platform, but the “yellow” and “green” options, representing their brand colors, were still present. A day later, the WSJ reported that the sanctioned banks were removed from the list altogether, citing a Binance spokesperson.
Even though they were supposed to be removed, Cointelegraph discovered that Binance P2P users are still putting up ads for sales using “the green bank” as their preferred payment option. These users might mention other payment methods like Russian Standard Bank or Ak Bars Bank, but they make it clear in the “advertiser’s terms” that they’ll only accept transfers through “the green bank.“
The same thing goes, according to media reports, for both OKX and Bybit, where merchants still provide an option of exchange via sanctioned banks in private communication.
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Crypto community reacts to Biden’s proposed crypto tax reporting rules
Several prominent crypto commentators have criticized the new crypto tax reporting rules recently put forth by United States President Joe Biden.
On Aug. 25, to catch crypto users avoiding taxes, the Internal Revenue Service (IRS) proposed brokers follow new rules for selling and trading digital assets. Brokers would use a new form to make tax filing easier and prevent cheating on taxes.
The U.S. Department of the Treasury indicated that the proposed rules would make digital asset reporting similar to reporting on other assets.
However, many in the crypto community believe the stringent rules will push the crypto industry further away from the United States.
Messari CEO Ryan Selkis was among those who responded unfavorably to the news, saying that if Biden secures reelection, the crypto industry will not flourish in the country.
Likewise, Chris Perkins, president of crypto venture firm CoinFund, holds the view that other countries have surged ahead of the U.S., and these rules will inevitably result in reduced innovation flowing into the country.
Rather than resorting to harsh crackdowns, he believes simple and detailed rules allowing safe innovation across the crypto industry are needed.
Meanwhile, others remain skeptical that neither the Democrats nor the Republicans would adequately champion crypto interests in the United States.
“I’m not confident that either party would be good for crypto. Though it definitely feels worse now than last presidency,” one user stated, as another pointed out that the new rules raise privacy concerns:
“US devotion to income tax means they can NEVER accept private transactions on public ledgers without tax and sanction surveillance.”
On Aug. 25 reported that Kristin Smith, CEO of the Blockchain Association, held reservations about merging digital asset reporting with traditional assets.
“It’s important to remember that the crypto ecosystem is very different from that of traditional assets, so the rules must be tailored accordingly and not capture ecosystem participants that don’t have a pathway to compliance,” Smith stated.
This follows Biden’s suggestion to impose taxes on crypto mining to decrease mining operations.
A budget proposal dated March 9 proposed that there would be an “excise tax equal to 30 percent of the costs of electricity used in digital asset mining.”
The crypto industry in the U.S. has repeatedly voiced concerns about regulatory choices affecting innovation within the nation.
On Aug. 13, Grayscale Investments CEO Michael Sonnenshein warned that the Securities and Exchange Commission constantly resorting to enforcement action will drive crypto firms out of the country.
“If every crypto issue needs to go to a court of law, then as a country, we are squashing the innovation taking place here,” Sonnenshein stated.
In the same vein, Brad Garlinghouse, CEO of Ripple, recently indicated that the crypto industry is shifting away from the U.S. due to its slower crypto regulation process compared with other countries like Australia, the United Kingdom and Singapore.
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Bitcoin velocity hits lows last seen before Q4 2020 BTC price breakout
Bitcoin on-chain activity is at levels last seen before its run to 2021 all-time highs, data shows.
In an X (formerly Twitter) post on Aug. 25, Ki Young Ju, CEO of analytics platform CryptoQuant, revealed multiyear lows in Bitcoin velocity.
Bitcoin supply stagnates at $26,000
Bitcoin is becoming increasingly static at current price levels — with an overall BTC price trend absent for months, the impetus to buy or sell is reduced.
Underscoring this status quo is velocity, which is a measurement of BTC units moving around the network.
According to CryptoQuant, on daily timeframes, the metric is now at levels last seen in October 2020.
“There are two sides to this situation,” Ki commented.
“It can be seen as positive since whales are holding onto it, or negative since it’s not being transferred to new investors.”
Ki referred to a similar absence of major trading activity among high-volume investors — part of a narrative that states that the market is in “wait and see” mode on BTC.
As reported, new money entering the space was visible at the beginning of the year, as BTC/USD began its Q1 winning streak, which ultimately totaled 70%.
“Oversold” RSI signal persists
The volume data meanwhile appears significant for another reason.
In late 2020, once it put in a long-term bottom, the metric’s rebound accompanied Bitcoin’s first ascent past $20,000 to new all-time highs a year later.
Unlike then, however, Bitcoin appears broadly oversold at its current $26,000, per its daily relative strength index (RSI) as measured by Cointelegraph Markets Pro and TradingView.
As Cointelegraph reported, the 12-hour RSI hit its lowest in five years this month and has yet to recover — again reflecting a return of investor interest still to materialize.
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Sam Bankman-Fried's lawyers push for temporary release, object to prosecutors' proposed deal
Lawyers representing former FTX CEO Sam Bankman-Fried, or SBF, have claimed the “extraordinary accommodations” offered by authorities were insufficient in order for him to prepare for his criminal trial in October.
In an Aug. 25 filing in United States District Court for the Southern District of New York, SBF’s legal team said the plan proposed by prosecutors to allow the former FTX CEO access to discovery materials before trial were inadequate. Lawyers said the U.S. Justice Department produced roughly 4 million pages worth of discovery materials on Aug. 24 and there were “millions of pages of documents and terabytes of data” left for SBF to review for his criminal trial.
“We do not believe that anything short of temporary release will properly address these problems and safeguard Mr. Bankman-Fried’s right to participate in his own defense,” said the filing. “Before his bail was revoked, Mr. Bankman-Fried was spending 80-100 hours a week reviewing the voluminous discovery and creating detailed analyses that he could update constantly and share with his attorneys.”
Bankman-Fried had been free on a $250-million bond for roughly 8 months following his extradition from the Bahamas and arraignment in the U.S. in December 2022. However, following allegations of witness intimidation of former Alameda Research CEO Caroline Ellison, a federal judge revoked his bail. Since Aug. 11, roughly two months before the start of his first criminal trial, SBF has been remanded to the Metropolitan Detention Center in Brooklyn.
Since his bail was revoked, SBF’s legal team has been pushing for fewer restrictions allowing him time outside jail in order to prepare for trial. A judge ruled on Aug. 21 that SBF be allowed roughly seven hours in the New York courthouse cell block attorney room on Aug. 22, and later issued an order giving him access to the same space with one laptop and wifi-enabled device on a seemingly unlimited basis provided his lawyers gave 48 hours’ notice.
“Mr. Bankman-Fried needs constant access to an internet-enabled computer that allows him to review documents from discovery, look up relevant context for the evidence online, draft and edit work product analyzing the documents and data, and share these documents and analyses with his attorneys,” claimed his legal team. “The Government’s current plan [...] comes nowhere close to this.”
SBF’s first of two trials is scheduled to begin on Oct. 3, in which he will face seven charges related to fraudulent activities involving user funds at FTX and Alameda Research. The second trial, scheduled for March 2024, will include five other criminal charges.
According to court filings, Bankman-Fried’s legal team may pursue a defense claiming the former CEO acted “in good faith” on advice of lawyers from Fenwick & West and FTX’s in-house counsel. These allegedly illegal actions included SBF directing that certain communications between FTX and Alameda employees be automatically deleted.
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Wen moon? Bitcoin halving cycle hints at Q4 as smart money 'buys the rumor'
Bitcoin is “much more likely” to stay rangebound until at least Q4, 2023, according to longtime market participant Filbfilb.
In an X thread on Aug. 25, the popular analyst and co-founder of trading suite Decentrader told readers to expect flat BTC price action into year end.
Filbfilb: BTC price approaching "critical time"
Bitcoin may be disappointing bulls after its 70% Q1 gains, but for Filbfilb, there is little about BTC price action this halving cycle that is different to its previous ones.
“Bitcoin is 1200 days since the previous halving. During this period, Bitcoin has historically consolidated,” he explained.
Uploading various comparative charts, Filbfilb predicted that miners should begin to bid price higher into the Bitcoin halving — with this occurring around 1,276 days after each prior halving.
“Miners are incentivized to ensure that prices are well above marginal cost prior to the halving. Whether they collude consciously, or not they are collectively incentivized to send prices higher before their marginal revenue is effectively halved,” he wrote, also adding that smart money interested in “buying the rumor” around the halving’s potential positive BTC price impact had also buoyed the market in previous years.
1,276 from the 2020 halving gives early November as a potential deadline for such behavior to show itself.
“From a timing perspective Q4 seems like a critical time for BTC where we are likely to see supply constricted and new money driven by speculation,” Filbfilb forecast.
“Until then, it would be unusual for Bitcoin to break up, much more likely to consolidate.”
Macro risk to Bitcoin stays "elephant in the room"
Between now and then, however, various curve balls may lie in wait for Bitcoin, not least of which is United States macroeconomic policy.
The September meeting of the Federal Reserve’s Federal Open Market Committee (FOMC), which will decide benchmark interest rates, is of particular interest to risk asset bulls.
Filbfilb described the macro aspect as being “clearly the elephant in the room.”
“If that can remain steady, then I believe the game theory will play out and Bitcoin will convincingly break $30k before the 2023 year-end,” he wrote.
Should a more bearish scenario enter and Bitcoin return to $20,000, the current 2023 local high of $31,800 may remain in force.
“I would suggest that if that happens and is for anything other than for a very short time period, then the pre-halving pump may only take us to the 2023 highs already seen and breaking it would come later,” he concluded.
As reported, other analysts are also counting the days between halvings, with varying BTC price predictions coming as a result.
Asset managed Pantera Capital this week delivered a $35,000 target for the next halving and $148,000 for after the 2024 event, while another recent prediction stated that $100,000 would under no circumstances come before it.
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Bitcoin could be worth less than $20K in 2023, US inflation data says
Bitcoin is still worth $20,000 nearly six years after first reaching it — if adjusted for inflation.
According to data from sources including U.S. Inflation Calculator, BTC price performance has de facto stayed static since 2017.
BTC price "barely above" 2017 old all-time high
While criss-crossing the $20,000 mark since tapping it as an all-time high in 2017, BTC/USD has gone as high as $69,000 in the meantime.
Taking inflation into account, however, the story of BTC price action looks remarkably different. As of Aug. 25, 2023, $20,000 worth of BTC purchased in 2017 is now worth $24,942.
Put another way, the current Bitcoin spot price — $26,050 per data from Cointelegraph Markets Proand TradingView — reflects six years of practically static BTC price action.
“In inflation adjusted dollars, bitcoin is barely above the 2017 market peak,” BTCGandalf, the anonymous marketing officer at Bitcoin mining company Braiins, acknowledged on the topic this week.
Responses on X further noted that this calculation was based on official inflation numbers, meaning that in real terms, BTC/USD may even be lower than its previous cycle peak.
Others concluded — perhaps wryly — that the numbers underscored Bitcoin’s ability to function as a store of value, while BTCGandalf added that he was “surprised” that the issue had not received much publicity.
According to U.S. Debt Clock, national debt currently stands at over $32.7 trillion.
Bitcoin "bearadise" may come after Jackson Hole
U.S. inflation meanwhile continues to be a central focus for risk asset investors, including crypto bulls.
With official data pointing to a slowdown, hopes are being pinned on the Federal Reserve to match economic policy with perceived reality.
On Aug. 25, Fed Chair Jerome Powell will deliver a statement on policy at the annual Jackson Hole Economic Symposium — an event keenly eyed by those looking for a break of the current BTC price status quo.
“Prepared for a test of the lows and the potential for some whipsaw volatility,” Keith Alan, co-founder of monitoring resource Material Indicators, wrote in part of an X post on the day.
“A double bottom is a good foundation to bounce. A lower low paves the way to bearadise.”
An accompanying chart showed the BTC/USD order book on Binance still lacking significant liquidity above $25,000, increasing the chances of rapid moves.
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Sam Bankman-Fried’s lawyers argue previous FTX legal team led him to act 'in good faith'
Lawyers currently representing Sam Bankman-Fried, or SBF, for his criminal case in the United States plan to elicit evidence the former CEO acted “in good faith” on advice of previous counsel in regards to his alleged actions at FTX and Alameda Research.
In an Aug. 23 filing in U.S. District Court for the Southern District of New York, SBF’s legal team said Fenwick & West, the law firm which formerly represented cryptocurrency exchange FTX, provided certain legal advice to the firm of which Bankman-Fried had been aware. According to lawyers, Fenwick & West advised FTX on its data retention policies, customer agreements, terms of services, and agreements between the exchange and Alameda.
“The defense intends to elicit evidence that Mr. Bankman-Fried was aware that Fenwick lawyers as well as in-house counsel for FTX, including Dan Friedberg, Can Sun, Ryne Miller, and others, were involved in reviewing and approving decisions related to these matters and others, which gave him assurance that he was acting in good faith,” said the filing. “Evidence of the defendant’s reliance on counsel is relevant to the question of intent and is not limited to situations where the defense can establish that the defendant formally sought out the advice of counsel, received legal advice, and followed the advice given.”
The defense, if accepted by a court, seemed to be aimed at providing some legal cover for SBF’s alleged actions leading to his criminal case, including directing that certain Slack and Signal communications between FTX and Alameda employees would automatically be deleted starting in 2021. SBF’s lawyers had previously petitioned a judge to allow them to subpoena documents from Fenwick & West for their defense strategy, a motion which was denied in June.
"Mr. Bankman-Fried’s awareness that counsel was involved in the matters listed above and others is relevant to rebut the Government’s claim that Mr. Bankman-Fried acted with criminal intent to defraud."
The case against Bankman-Fried is centered around the former FTX CEO allegedly misappropriating user funds for investments, personal expenses, and donations to political campaigns. He faces 12 criminal counts which will be spread across two trials starting in October 2023 and March 2024 and has pleaded not guilty to all charges.
Bankman-Fried had been free on a $250-million bail following his extradition from the Bahamas and arraignment in the United States in December 2022. However, on Aug. 11 a federal judge revoked his bail, causing him to be sent to the Metropolitan Detention Center in Brooklyn following allegations of witness intimidation. At an Aug. 22 hearing, SBF’s lawyers claimed he had been surviving in jaillargely on bread, peanut butter and water due to the lack of vegan meal options.
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FTX’s Sam Bankman-Fried pleads not guilty to fraud charges: Report
Sam “SBF” Bankman-Fried, the former CEO and co-founder of crypto exchange FTX, has pleaded not guilty to fraud and money laundering charges levied in an updated indictment by prosecutors, according to a report.
The latest court proceedings against SBF were heard by Magistrate Judge Sarah Netburn. The former FTX CEO was charged with seven counts of fraud and money laundering along with an additional charge of campaign finance. Bankman-Fried pleaded not guilty on all counts.
SBF’s counse also raised concerns pertaining to his medical needs, sharing that SBF takes Adderall and follows a vegan diet but has not received his medication in the last 11 days. The court proceedings also saw SBF’s lawyers request a vegan diet for their client.
The counsel also cited Sixth Amendment concerns, saying their client cannot prepare for trial, as he has been under remand since Aug. 11. The counsel noted further that they have been offered “only fictions as solutions.”
Bankman-Fried appeared in the Southern District of New York courthouse on Aug. 22, facing accusations of misusing customer funds for personal use and political donations. The fraud and money laundering charges are from December; however, prosecutors added additional campaign finance charges earlier this month.
The latest proceedings in the FTX lawsuit come after Bankman-Fried’s bail was revoked, with SBF leaving the New York courtroom in handcuffs.
Earlier in the week, Bankman-Fried requested the court grant him permission to spend five weekdays outside of detention to work with his legal team on his defense. However, a federal judge overseeing SBF’s criminal case issued an order allowing him to meet with his legal team outside of jail for roughly seven hours.
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Bitcoin is already in its ‘next bull market cycle’ — Pantera Capital
Bitcoin is beginning its “seventh bull cycle,” and investors should not be scared of crypto post-FTX, Pantera Capital believes.
In its latest “Blockchain Letter” on Feb. 8, the asset management firm’s CEO, Dan Morehead, predicted that 2023 would be a “year for rebuilding trust.”
Morehead: Crypto assets have “seen the lows” this cycle
With BTC price action retracing slightly after gaining 40% in January, some market participants still insist that new macro lows are due across crypto assets.
While the timing for such a scenario varies, consensus remains absent when it comes to how the market will rebound.
For Morehead, however, the time to flip bullish on crypto is already here.
“Pantera has been through ten years of Bitcoin cycles and I’ve traded through 35 years of similar cycles,” he noted.
“I believe that blockchain assets have seen the lows and that we’re in the next bull market cycle – regardless of what happens in the interest-rate-sensitive asset classes.”
That perspective differs from the majority in casting aside the debate over crypto price correlation with risk assets such as equities. As Cointelegraph continues to report, this forms the backbone of some other prognoses for 2023.
Morehead argued that the drawdown from Bitcoin’s latest all-time highs had placed the market well within the historical context, despite dipping below its previous bull market all-time high after the FTX debacle in November 2022.
“The decline from November 2021 to November 2022 was the median of the typical cycle. This is the only bear market to more than completely wipe out the previous bull market. In this case, giving back 136% of the previous rally,” he wrote, alongside accompanying data.
“The median downdraft has been 307 days and the previous bear market was 376. The median drawdown has been a -73% downdraft and the latest bear market ended at -77%.”
Going forward, a trend change will ensue, with Bitcoin on its way to fresh record highs.
“I think we’re done with that and beginning to grind higher,” Morehead added.
A “jurisdiction-by-jurisdiction” recovery
Similar optimism was directed at the decentralized finance space, with Pantera nonetheless positioning for a year of “rebuilding trust” in centralized finance (CeFi) first and foremost.
This would be necessary, Morehead claimed, in light of last year’s multiple corporate failures, which precipitated the crypto bear market.
“2022 was a year of booms and major busts, especially as it pertains to CeFi. In the span of a few months, the world saw Three Arrows Capital collapse, Do Kwon’s LUNA disintegrate, Voyager Digital go bankrupt, and Sam Bankman-Fried’s (SBF) FTX empire shatter,” he explained.
“What did all these events have in common? The headlines like to suggest that it was crypto or Web3 that failed. But, in fact, it was a combination of bad actors skirting lines in jurisdictions without clear regulations. If 2022 was the year of breaking rules and failing, I believe 2023 is the year that entities instead follow the rules and enjoy the rewards of doing so.”
While the letter did not mention the current regulatory battle involving the United States Securities and Exchange Commission, it foresaw CeFi reclaiming its clout worldwide “on a jurisdiction-by-jurisdiction level.”
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Bitcoin price faces key moving average showdown 3 weeks after breakout
Bitcoin saw no relief at the Feb. 10 Wall Street open as United States equities dipped further.
"All eyes" on 200-day moving averages
Data followed BTC/USD as it tracked sideways following a volatile 24 hours’ trading.
Existing market weakness was compounded by an announcement from U.S. regulators concerning Ethereum staking, with major crypto exchange Kraken forced to suspend its staking operations and pay a $30 million fine.
Bitcoin fell to three-week lows as a result, with traders eyeing potential retests of $20,000 and even $19,000 to come.
On the day, stocks offered little by way of comfort to risk asset traders, with the S&P 500 opening down to cross a significant line in the sand left over from late last year.
U.S. dollar strength also bided its time, with a hopeful take from Investment research resource Game of Trades eyeing resistance which it may fail to overcome.
“USD has been rejected from its macro uptrend line that's now turned to resistance. Confirmation is key though,” it summarized on Twitter.
Scott Melker, known as “The Wolf Of All Streets,” meanwhile saw cause for optimism on 4-hour timeframes when it came to Bitcoin. A comeback could still materialize if it were accompanied by a rebound in relative strength index (RSI) values.
"This looks ripe for a bounce. RSI oversold with potential bullish divergence," he told Twitter followers in a fresh update.
"Need to wait until the next candle close and see if we get an 'elbow up' on RSI. Testing 200 MA for first time since Jan 6th. $21,646 is also key support, exactly where price bounced."
An accompanying chart showed spot price proximity to the 200-day moving average (MA) mentioned. This remains a key trend line which Bitcoin only recently reclaimed after trading below it since late 2021.
"All eyes on Bitcoin's 200-day moving average cloud," Caleb Franzen, senior market analyst at Cubic Analytics, continued on the topic.
Analyst predicts 2021-style energy price surge
Casting a longer-term view, Alasdair Macleod, head of research at precious metal investment company Goldmoney, had a further shock in store.
In his latest research piece released on the day, Macleod warned that macroeconomic conditions were apt to repeat behavior from a year earlier, at the start of the Russia-Ukraine conflict.
This specifically would involve a rerun of the commodity and energy price increases still being felt by consumers — but also a bull run for gold.
“At this time last year, gold began a rapid rise to $2070 and oil traded up from $85 to $120 when Russia attacked,” he wrote.
“It is amazing that markets are ignoring the very clear signals that the conditions which led to commodity and energy prices soaring last February are in place to happen again.”
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Ethereum price risks 20% correction amid SEC’s crackdown on crypto staking
Ethereum’s native token, Ether, saw its worst daily performance of the year as the United States Securities and Exchange Commission (SEC) stopped Kraken, a cryptocurrency exchange, from offering crypto staking services.
On Feb. 9, Kraken agreed to pay $30 million to settle the SEC’s allegation that it broke securities rules by offering crypto staking services to U.S. retail investors.
In particular, the news pushed down the prices of many proof-of-stake (PoS) blockchain project tokens. Ethereum, which switched to a staking-based protocol in September 2022, also suffered.
On Feb. 9, ETH’s price plunged nearly 6.5% to around $1,525, the largest single-day decline since Dec. 16 of last year.
Will Ethereum staking survive the SEC crackdown?
The SEC's crackdown on crypto staking begins as Ethereum awaits the release of its key network upgrade, dubbed Shanghai, in March.
The update will finally allow Ether validators — entities that have locked approximately $25.6 billion worth of ETH tokens in Ethereum’s PoS smart contract — to withdraw their assets alongside yield rewards.
As a result, multiple analysts, including Bitwise Asset Management’s chief investment officer, Matt Hougan, consider Shanghai a bullish event for Ether.
“Today, many investors who would like to stake ETH and earn yield are sitting on the sidelines. After all, most investment strategies can’t tolerate an indefinite lock-up,” wrote Hougan in his letter to investors in January, adding:
“So, most investors stay out of the market. But once that indefinite lock-up is removed, the percentage of investors willing to stake their ETH will explode.“
But doubts have been emerging about the future of crypto staking in the U.S., with Brian Armstrong, the CEO of Coinbase crypto exchange, fearing that the SEC would ban staking for retail investors in the future.
Moreover, some analysts argue that banning Ether-staking services will force users to move away from Ethereum.
Notably, Ethereum requires stakers to deposit 32 ETH (~$50,000) into its PoS smart contract to be a validator. As a result, retail investors often use third-party staking services that pool smaller amounts of ETH to enable validator status.
“If the SEC bans crypto staking for the public, then a majority of Ethereum validators will have to come down,” argues independent analyst Ripple Van Winkle, adding:
“Because you need 32 ETH to stake. Which means the ETH network is going to experience issues.“
ETH price sees bearish rejection
From a technical perspective, Ether price is positioned for a potential 20% price correction in February.
Notably, on the daily chart, ETH price has been undergoing a pullback move after testing its multimonth descending trendline as resistance. It now holds the 200-day exponential moving average (200-day EMA; the blue wave) near $1,525 as support.
Ether risks dropping below the 200-day EMA support wave owing to its negative market fundamentals. Such a scenario includes the next downside target at $1,200, which coincides with a multimonth ascending trendline support.
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Judge extends Sam Bankman-Fried’s bail restrictions on messaging apps: Report
A federal judge has reportedly denied oral arguments proposing former FTX CEO Sam Bankman-Fried be allowed to use certain messaging apps.
According to a Feb. 9 Reuters report, Judge Lewis Kaplan of the United States District Court for the Southern District of New York upheld his ruling that Bankman-Fried be restricted from using encrypted messaging apps as a condition of his release on a $250-million bond. The judge ordered SBF not to communicate using apps such as Signal on Feb. 1, but the former CEO’s legal team and prosecutors had negotiated a deal allowing for exceptions, including Facebook Messenger, Zoom and FaceTime.
Judge Kaplan reportedly said he was “far less interested in [Bankman-Fried’s] convenience” than in the former FTX CEO contacting potential witnesses in his criminal case — court filings showed SBF had reached out to FTX US general counsel Ryne Miller and current FTX CEO John Ray. Bloomberg reported the judge said Bankman-Fried could be “bright enough to encrypt something without a computer,” suggesting that the current bail restrictions were necessary.
“There is still snail mail and there is still email and there are all kinds of ways to communicate that don’t present the same risks,” said Kaplan.
Bankman-Fried appeared in court in person as part of the bail hearing but largely remains restricted to his parents’ California home. His bail restrictions will reportedly remain in place until Feb. 21 following Kaplan’s ruling to extend.
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Arthur Hayes bets on Bitcoin, altcoin surge in H1 2023 as he buys BTC
Bitcoin, Ether and even nascent altcoins are a solid “buy,” a previously risk-off investor says.
In a blog post released on Feb. 8, industry stalwart Arthur Hayes announced a u-turn on his current crypto investment plans.
Hayes changes tune on “risky assets”
Current macroeconomic conditions stemming from the United States Federal Reserve previously made Arthur Hayes keen to avoid what he calls “risky assets.”
As inflation slows in tandem with the Fed’s rate hikes, multiple new storms are brewing in the U.S., and the Fed, Congress and the Treasury will steer the economy as they see fit, he says.
The problem is guessing how these events will play out over the course of the year. For Hayes, 2023 could well be split into two halves, with H1 being an ideal investment environment for crypto.
This runs contrary to a previous thesis from mid-January, in which the former BitMEX CEO said that he was staying on the sidelines for fear of a Fed-induced capitulation event hitting risk assets.
“My concerns about this potential outcome, which I handicapped would most likely happen later in 2023, has led me to keep my spare capital in money market funds and short-dated U.S. Treasury bills,” he explained.
“As such, the portion of my liquid capital that I intend to eventually use to purchase crypto is missing out on the current monster rally we’re seeing off of the local lows. Bitcoin has rallied close to 50% from the $16,000 lows we saw around the FTX fallout.”
Hayes continued that Bitcoin is likely far from done with its rebound despite 40% gains in January alone, comparing the risk asset environment to 2009 and the start of quantitative easing.
This year, the picture is complex — quantitative easing has given way to quantitative tightening, where liquidity is removed from the U.S. financial system at risk assets’ expense.
However, H1 looks to be providing some relief, with some liquidity returning to avoid hitting the debt ceiling too soon. This could continue until Congress votes to raise the debt ceiling in the summer, which Hayes and others argue is inevitable.
Cash in the Treasury General Account (TGA) will be emptied to the amount of $500 billion, canceling the $100 billion monthly liquidity that the Fed is removing.
“The TGA will be exhausted sometime in the middle of the year. Immediately following its exhaustion, there will be a political circus in the U.S. around raising the debt limit,” the blog post forecasts.
“Given that the Western-led fiat financial system would collapse overnight if the US government decided to forgo raising the debt ceiling and instead defaulted on the assets that underpin said system, it’s safe to assume the debt ceiling will be raised.”
Looking out for macro “unwinding”
It is then that the tide will turn, and risk assets could become a thorn in the side of every investor once again.
It is all a matter of timing, Hayes believes. His plan is to move into U.S. dollar cash, from where a segue into select risk assets is possible. Top of the menu, it would appear, is Bitcoin.
“I’ll deploy over the coming days. I wish my size actually mattered, but it doesn’t — so please don’t think that when this happens, it will have any discernible effect on the price of the orange coin,” he told readers.
Going forward, however, altcoins represent a major opportunity, the blog post explains in its conclusion, with these likewise conditioned by timing.
“The key to shitcoining is understanding they go up and down in waves. First, the crypto reserve assets rally — that is, Bitcoin and Ether. The rally in these stalwarts eventually stalls, and then prices fall slightly,” Hayes wrote about crypto market cycles.
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FTX debtors can issue subpoenas to company 'insiders', says court
The judge overseeing crypto exchange FTX’s bankruptcy case has granted a motion allowing the firm’s debtors to request subpoenas for information and documents from former colleagues and family members of Sam Bankman-Fried.
In a Feb. 8 filing, Judge John Dorsey said FTX debtors were authorized under bankruptcy court rules to issue subpoenas to certain individuals “for the production of documents, electronically stored information, or tangible things”. The original motion filed on Jan. 25 defined the target of the subpoenas as insiders not “currently cooperating with the Debtors to provide important information” — a list which includes Bankman-Fried, former Alameda Research CEO Caroline Ellison, FTX co-founder Gary Wang, and members of SBF’s immediate family.
“The Debtors attempted to confer with all of the Insiders to arrange a mutually agreeable date, time, place and scope of production,” said the Jan. 25 filing. “To date, none of the Insiders subject to this Motion have agreed to provide the requested information.”
Judge Dorsey granted a separate motion on Feb. 8 ordering subpoenas of “relevant third parties” related to discovery of a confidential investigation. The initial filing from January did not include the names of the third parties, but added they could “possess specific evidence critical to the Debtors’ asset recovery efforts and investigation” into $300 million in unauthorized transfers.
Proceedings are underway in the bankruptcy court to consider whether to assign an independent examiner to FTX’s case operating alongside the debtors. Judge Dorsey is expected to rule on the matter in a Feb. 9 hearing.
In criminal court, Bankman-Fried faces eight counts related to alleged illicit transactions and movement of funds between FTX and Alameda. On Feb. 7, U.S. Attorney for the Southern District of New York Damian Williams petitioned the court to delay civil proceedings from the Securities and Exchange Commission and Commodity Futures Trading Commission against SBF “until the conclusion of the parallel criminal case”.
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Happy Bitcoin anniversary, Tesla — Elon Musk firm still hodls 9.7K BTC
Bitcoin held by Tesla is still worth 33% less than its 2021 purchase price, the latest data shows.
Two years to the day that Elon Musk’s firm added BTC to its balance sheet, most gains continue to evade the auto manufacturer.
Tesla and Bitcoin: From $1.5 billion to $225 million
Bitcoin and Tesla have proven an explosive combination since Musk announced that it would buy $1.5 billion in BTC.
The move in February 2021 came as BTC/USD was on its way to its first all-time high of the year, which it reached in April, topping out at $58,000.
Tesla’s purchase price was around $34,700 at the time, according to data from the tracking website Bitcoin Treasuries.
After selling 10% of its holdings in March of that year, Tesla became a heavyweight hodler until a surprise move announced in July 2022 saw it divest 75% of its remaining coins.
That was done at a loss, as at the time, BTC/USD traded near $23,000. The sale occurred during Q2 2022 at around $29,000 per coin.
Taking the hit appeared more appealing to Musk, who claimed that the rationale behind the sale was not a direct commentary on Bitcoin as an investment.
Since then, Tesla has hodled 9,720 BTC, with subsequent price action still denying the company any investment gains. According to Bitcoin Treasuries, Tesla is still 33% down on its remaining stash as of February 2023, worth $225 million.
TSLA and BTC rise in tandem
Previously reported on the relationship between the Bitcoin spot price and Tesla stock, both seeing a broad resurgence at the start of 2023.
As of the Bitcoin purchase anniversary, TSLA is up 66% year-to-date, outpacing Bitcoin’s gains of just under 40%, data from Cointelegraph Markets Pro and TradingView confirms.
The rebound has failed to capture the imagination of mainstream media, however, which this month opted to highlight Tesla’s 2022 BTC net losses, which in U.S. dollar terms amounted to $140 million.
Meanwhile, Musk has become arguably better known within the context of other cryptocurrencies, notably Dogecoin, which he has given considerable publicity on social media and elsewhere since 2021.
Recently, he revealed that payments would be coming to Twitter, which he purchased last year, and that these could, at some point include cryptocurrency.
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