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Bitcoin faces elevated CPI with BTC price tackling $26.8K focal point
Bitcoin is clinging to the key $26,800 mark prior to the Oct. 12 Wall Street open as United States inflation data continued to beat expectations.
BTC price reacts as CPI surpasses predictions
Data showed BTC price volatility staying muted after two-week lows seen the day prior.
These had come thanks to U.S. macroeconomic data revealing persistent inflation continuing to take markets by surprise.
On the day, the September print of the Consumer Price Index (CPI) bolstered the trend, coming in at 3.7% year-on-year versus 3.6% expected. Less food and energy, the tally was 4.1% — matching forecasts.
“The all items index increased 3.7 percent for the 12 months ending September, the same increase as the 12 months ending in August,” an official press release from the U.S. Bureau of Labor Statistics confirmed.
“The all items less food and energy index rose 4.1 percent over the last 12 months. The energy index decreased 0.5 percent for the 12 months ending September, and the food index increased 3.7 percent over the last year.”
Reacting, financial commentary resource The Kobeissi Letter nonetheless emphasized the tight spot in which monetary policy — and the Federal Reserve — now found itself.
“We have PCE and PPI inflation rising with CPI inflation above expectations,” it wrote on X.
“How can the Fed cut interest rates any time soon?”
The concept of “higher for longer” when it comes to U.S. interest rates is broadly expected to result in pressure for risk assets, including crypto.
Following CPI, the odds of the Fed hiking rates further at the next meeting of the Federal Open Market Committee (FOMC) on Nov. 1 were nonetheless minimal at just 7.4% per data from CME Group’s FedWatch Tool.
Analyst on Bitcoin vs. macro: "Bad = bad"
Turning to Bitcoin itself, already cautious market participants had little reason to expect a return to upside in the short term.
Popular trader Skew continued to flag $26,800 as the zone for bulls to flip to support.
Monitoring resource Material Indicators revealed a lack of bid liquidity much above $24,750, a key level from the past two quarters.
“It's been a while since we've discussed whether good = good or good = bad for BTC price,” co-founder Keith Alan added in commentary on the macro aspect ahead of CPI.
“I'm no economist, but based on yesterday's reports, the overall economic outlook and geopolitical tensions, I'm going to go with bad = bad.”
Continuing, trading firm QCP Capital described “unabated” downhill trajectory on Bitcoin and largest altcoin Ether coming despite various potential bullish factors in Q4.
“Hopefully the relative underperformance of BTC and ETH to the upside now also mean their beta is lower to the downside as well, should CPI come in stronger than expected,” it wrote in a market update earlier on the day.
“Otherwise, we continue looking at the key levels of 25-26k on the downside, and 29-30k on the topside as critical to determine the next trend.”
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Bitcoin Hashrate to Drop by 20% After Next Halving Event: JPMorgan
JPMorgan has predicted a potential 20% drop in the Bitcoin (BTC) Network Hashrate following the next halving event scheduled for April 2024.
"We estimate as much as 80 EH/s (or 20% of the network hashrate) could be removed at the next halving (April '24) as less-efficient hardware is decommissioned," the report said.
The Bitcoin halving occurs every four years and involves a halving of rewards for Bitcoin miners.
The report also mentioned that the four-year block reward opportunity amounts to approximately $20 billion, based on Bitcoin's current price.
However, it noted that there has been a significant decrease of around 72% compared to just over two years ago, stating:
"For context, this figure peaked at roughly $73 billion in April '21 and has fluctuated between $14 billion and $25 billion over the past year."
JPMorgan Names Out Top Bitcoin Miners
The report by JPMorgan also recommended mining operators that offer the best relative value based on factors such as existing hashrate, operational efficiency, power contracts, funded growth plans, and liquidity.
It added that the investment bank would start coverage with the following ratings and price targets: CleanSpark (CLSK) overweight with a $5.50 target, Marathon Digital (MARA) underweight with a $5 target, Riot Platforms (RIOT) underweight with a $6.50 target, and Cipher Mining (CIFR) neutral.
Additionally, Iris Energy (IREN) has been upgraded from neutral to overweight.
JPMorgan's top pick is CleanSpark, which offers the best balance of scale, growth potential, power costs, and relative value.
The report also highlighted that while Marathon is the largest mining operator, it has the highest energy costs and lowest margins.
Riot, on the other hand, has relatively low power costs and liquidity but is the most expensive stock in JPMorgan's coverage universe.
Cipher Mining boasts the lowest power costs among peers but is considered growth-constrained.
Miners Turn to Hedging Options Amid Price Volatility
As reported, Bitcoin miners are considering hedging options to protect their revenue stability amidst the volatility of the cryptocurrency market.
GSR, a leading firm in the trading and market-making space, is pitching hedging products that would provide miners with a more predictable income.
By offering these tools, GSR aims to make the $500 billion Bitcoin network more resilient, ensuring that large operators are not at risk of going under during market downturns.
It is worth noting that miners often hold onto the Bitcoin they mine rather than selling it immediately.
This acts as a form of natural hedge, as miners bet on the price increasing over time.
However, by not selling their mined Bitcoins, miners risk forgoing immediate profits.
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From Paradise to Courtroom: Sam Bankman-Fried's $35 Million Bahamas Property
Prior to his crypto empire’s collapse eleven months ago, disgraced FTX boss Sam Bankman-Fried (SBF) lived on a lavish Bahamas property alongside nine close friends, accomplices, and fellow executives.
Some of those executives included FTX co-founder Gary Wangand SBF’s ex-girlfriend, Caroline Ellison, who he appointed to lead FTX’s sister hedge fund Alameda Research. Today those same two executives testify against Bankman-Fried, in court having pled guilty to their own acts of fraud.
During the first week of the ex-billionaire's trial, prosecutors dug into how exactly the group paid for their luxurious 11-500 square foot home.
Government lawyers presented a series of photos featuring “Orchid,” a penthouse Condo in which the co-workers reside overlooking the Atlantic Ocean. The Orchid is considered the crown jewel of the 600-acre Albany oceanside resort and features backing from numerous wealthy celebrities including Tiger Woods and Justin Timberlake.
In his own testimony, senior FTX developer Adam Yedidia said Alameda was responsible for buying the $35 million penthouse. The government included into evidence a text exchange from Bankman-Fried in which he admitted that he’d “been assuming that it’s basically just Alameda paying for it in the end.”
Michael Lewis captured the penthouse’s glamor in an excerpt from his new book on Bankman-Fried, “Going Infinite: The Rise and Fall of a New Tycoon.” He wrote:
“At night its penthouse was lit purple, and the purple light made it seem glamorous, and elicited envy even from those accustomed to being envied.”
Alameda’s Sheer Debt
Yedidia said that he and Bankman-Fried spoke about concerns the latter had about FTX’s business outside the resort, near a group of six stadium-lit padel courts. Yedidia said he discovered an $8 billion debt that Alameda owed FTX in the summer of 2022, which matched the shortfall FTX faced on customer deposits when it finally collapsed last year.
“Because if they spend the money that belongs to the FTX customers, then it’s not there to give the FTX customers should they withdraw,” Yedidia testified.
Yedidia said he resigned from FTX a day before it filed for bankruptcy after a fellow developer told him the exchange had used customer deposits to pay back Alameda’s creditors. According to Ellison’s testimony on Tuesday, Alameda had taken upwards of $10 billion from FTX customers to pay off creditors, all at Bankman-Fried’s order.
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Bitcoin Lightning Network growth jumps 1,200% in 2 years
Bitcoin’s layer 2 Lightning Network has seen an estimated 1,212% growth in two years, with around 6.6 million routed transactions in August, a significant jump compared with August 2021’s 503,000 transactions, according to data from the Bitcoin -only exchange River.
In an Oct. 10 report, River research analyst Sam Wouters explained the jump in routed transactions — which use more than two nodes to facilitate a transfer — came despite a 44% fall in Bitcoin’s price and considerably less online search interest.
“‘Nobody is using Lightning’ should now be a dead meme,” Wouters said in an Oct. 10 follow-up X (formerlyTwitter) post, taking a shot at Lightning critics.
River’s 6.6 million figure for Lightning-routed transactions is a lower-bound estimate — the smallest possible value it could assess. The firm also sourced August 2021’s 503,000 figure from a 2021 study by K33, formerly Arcane Research, and added it could not assess private Lightning transactions or those between only two participants.
$78.2 million in transaction volume was also processed on Lightning in August 2023, marking a 546% increase from August 2021’s $12.1 million figure sourced by K33. Wouters noted that Lightning is now processing at least 47% of Bitcoin’s on-chain transactions.
“This will be an interesting metric to monitor,” he added. “It is an indicator of Bitcoin becoming more of a medium of exchange.”
In August 2023, the average Lightning transaction size was around 44,700 satoshis or $11.84. River estimated between 279,000 and 1.1 million Lightning users were active in September.
The firm attributed 27% of transaction growth to the gaming, social media tipping and streaming sectors.
River said the Lightning payments success rate was 99.7% on its platform in August 2023 across 308,000 transactions. The main reason for failure occurs when no payment route can be found that has enough liquidity to facilitate the transfer.
River’s data set consisted of 2.5 million transactions. The nodes in River’s data set represent 29% of all the capacity on the networkand 10% of payment channels.
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BTC price rally in doubt? Bitcoin young supply echoes 2022 bear market
Bitcoin traders are displaying behavior similar to the 2022 bear market bottom as “uncertain” sentiment rules, new research argues.
In one of its Quicktake market updates on Oct. 9, on-chain analytics platform CryptoQuant examined a major drop in realized capitalization of the most active part of the BTC supply.
One-month-old BTC supply realized cap comes full circle
Bitcoin’s more speculative investor cohorts continue to come in for scrutiny this year as BTC price action experiences a variety of diverging environments.
Spot price is currently circling the aggregate cost basis for so-called short-term holders (STHS), defined as entities hodling a given amount of BTC for 155 days or less.
Now, CryptoQuant reveals that the realized capitalization, or cap, of coins which last moved between 24 hours and one month ago has collapsed in recent months.
Realized cap refers to the combined value, here in U.S. dollars, of a specific group of bitcoins being used in transactions. Tracking the total value of the one day to one month (1D-1M) cohort can give insights into broader BTC price action, CryptoQuant says.
“In my view, this dataset effectively reflects Bitcoin's market price fluctuations,” contributor Binh Dang wrote.
“It represents recently acquired coins before they become long-term holdings or are continually traded in the short term.”
In late 2022, when BTC/USD fell to two-year lows, the 1D-1M cohort’s realized cap fell to below $20 billion. When Bitcoin peaked at just below $32,000 in July, the realized cap topped out at more than double — around $44 billion.
Binh shows that the figure has now retreated back to those bear market levels, “recovering slightly” to still hover near the $20 billion mark.
“The current change in this data (in blue and green) shows an inconsistent recovery, partly due to general market sentiment, including macroeconomic and geopolitical issues,” he continued in commentary on an illustrative chart.
Bitcoin newbies "should not expect" rerun of Q1 gains
$20 billion has in fact formed a broad floor for the 1D-1M group since September last year, but going forward, a stronger bounce should be viewed as unlikely.
“The market will likely remain uncertain if these data don't show significant and positive trends from now until the year's end,” Banh wrote.
“The volatility will be unpredictable, so newcomers should not expect continuous and strong price increases as in the first half of this year.”
Similar conclusions can be drawn from the percentage of the aggregate realized cap accounted for by 1D-1M coins.
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Bitcoin analysts look to November as price action looks to mirror past cycles
Bitcoin’s ongoing sideways price action could flip bullish as early as November if it behaves similarly to previous cycles leading up to a halving event, according to market observers.
On Oct. 10, crypto analyst Miles Deutscher cited a chart from CryptoCon, noting that the recent patterns for Bitcoin are similar to those seen in previous cycles.
“This is typical sideways price action that occurs from Q2-Q4 in pre-halving years.”
He added that Nov. 21 has historically been a key pivot point for Bitcoin’s price to begin trending upward as it heads to the next halving.
For example, following six months of sideways trading in mid-2015, BTC prices started gaining ground around November. Likewise, in 2019, markets spent most of the year flat before taking off around the end of the year.
Self-proclaimed crypto trader and technical analyst “Mags” made a similar observation, noting that BTC is currently sitting 60% below its all-time high at around 200 days before its scheduled halving, similar to 2015 and 2019.
Galaxy Trading added that a similar cycle could see a Bitcoin “dump” or bottom around November 10–15.
The Bitcoin halving is around six months away and will occur in late April or early May depending on which countdown timer you refer to.
Meanwhile, in an Oct. 9 report, Markus Thielen, head of research at crypto financial services firm Matrixport, said Bitcoin’s price could surge going into 2024, but for different reasons.
“At present, the most critical macroeconomic factor appears to be a reflection of the situation in 2019 when the Fed paused its rake hikes, leading to a significant surge in Bitcoin prices.”
Nevertheless, the majority of analysts and observers are in general agreement that the next major bull market will come in the year that follows the Bitcoin halving.
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Ukraine rolls out AI regulation roadmap
Ukraine’s Ministry of Digital Transformation presented its regulatory roadmap for artificial intelligence (AI) on Oct. 7. The roadmap was published on the ministry’s website and states that it aims to help local companies prepare for adopting a law analogous to the European Union’s AI Act. It also seeks to educate citizens on protecting themselves from AI risks.
According to the roadmap’s announcement, it is based on a bottom-up approach that suggests moving from less to more, and it will provide businesses with tools to prepare for future requirements before adopting any laws.
The roadmap sets a preliminary period to allow the companies to adapt to potential laws in the next two to three years. Deputy Minister of Digital Transformation Oleksandr Borniakov outlines:
“We plan to create a culture of business self-regulation in several ways. In particular, by signing voluntary codes of conduct that will testify to companies’ ethical use of AI by companies. Another tool is a White Paper that will familiarise businesses with the approach, timing, and stages of regulatory implementation.”
The draft of the Ukrainian AI legislation, according to the roadmap, is expected in 2024, but no sooner than the EU’s AI Act to allow the national law will take it into account.
In June, the EU AI Act passed the European Parliament. Once implemented, the act would prohibit certain AI services and products while limiting or restricting others.
Among the technologies outright banned are biometric surveillance, social scoring systems, predictive policing, so-called “emotion recognition,” and untargeted facial recognition systems. Generative AI models, such as OpenAI’s ChatGPT and Google’s Bard, would be allowed to operate if their outputs were labeled as AI-generated.
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FTX used Python code to fake its insurance fund figure: Gary Wang
Crypto exchange FTX used hidden Python code to misrepresent the value of its insurance fund — a pool of funds meant to prevent user losses during huge liquidation events — according to testimony from FTX co-founder Gary Wang.
In a damning new testimony on Oct. 6, FTX's former chief technology officer, Gary Wang, said that FTX’s so-called $100 million insurance fund in 2021 was actually fabricated, and also never actually contained any of the exchanges’ FTX tokens (FTT) as claimed.
Instead, the figure shown to the public was calculated by multiplying the daily trading volume of the FTX Token by a random number close to 7,500.
When the prosecution surfaced the above tweet — among other public statements of its value — and asked Wang whether this amount was accurate he replied with a single word: “No.”
“For one, there is no FTT in the insurance fund. It's just the USD number. And, two, the number listed here does not match what was in the database.”
An exhibit in the Oct. 6 trial shows the alleged code used to generate the size of the so-called "Backstop Fund” or public insurance fund.
FTX's insurance fund was designed to protect user losses in case of huge, sudden market movements and its value was often touted on its website and social media.
According to Wang’s testimony, however, the amount contained within the fund was often insufficient to cover these losses.
For example, in 2021, a trader was able to exploit a bug in FTX's margin system to take an outsized position in MobileCoin, which resulted in a loss to the tune of hundreds of millions dollars for FTX, according to Wang.
When Bankman-Fried realized that the insurance fund had all but been exhausted, Wang said he was told to make Alameda “take on” the loss. This was supposedly in an attempt to hide the loss, as Alameda’s balance sheets were more private than those of FTX.
In addition to revealing the allegedly fraudulent nature of FTX’s insurance fund, Wang claimed that he and Nishad Singh were prompted by Bankman-Fried to implement an “allow_negative” balance feature in the code at FTX, which allowed Alameda Research to trade with near-unlimited liquidity on the crypto exchange.
On Oct. 5 Wang — who has already pleaded guilty to all charges pressed against him — admitted to committing wire fraud, commodities fraud and securities fraud with Bankman-Fried, former Alameda Research CEO Caroline Ellison and former-FTX director of engineering Nishad Singh.
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3 reasons why Ethereum price can't break $2K
The price of Ethereum's native token, Ether, has gained around 35% so far in 2023. But its attempts to break above $2,000, a psychological resistance level, have witnessed strong bearish rejections multiple times.
Let's take a closer looks at the three likely reasons why Ethereum price has failed to decisively retake $2,000 since May 2022.
Ethereum price paints bear cycle fractal
Ethereum's inability to cross above $2,000 in 2023 resembles the bearish rejection near $425 in 2018-2019.
In both cases, Ether appears to be in a recovery phase while eying close above its 0.236 Fib line of the Fibonacci retracement graph.
In 2018-2019, the 0.236 Fib line was near $425 and was instrumental in limiting Ether's recovery attempts. In 2023, the same line is near $2,000, enforcing itself again as a selling area and, thus, pressuring ETH's price lower.
Stronger U.S. dollar, Bitcoin
A strengthening U.S. dollar has dampened demand for Ethereum in recent months, thus reducing its ability to close decisively above $2,000.
The prevailing negative correlation between top cryptocurrencies and the dollar has been the main culprit. In 2023, in particular, the weekly correlation coefficient between Ether and the U.S. dollar index (DXY) has been consistently negative, as shown below.
Meanwhile, Ethereum has largely underperformed Bitcoin in 2023 due to the ongoing spot Bitcoin ETF hype. For instance, the widely-tracked ETH/BTC pair is down 20% year-to-date (YTD).
Additionally, the net capital held by Ethereum-tied investment funds has dropped by $114 million so far in 2023, according to CoinShares' weekly report. In comparison, Bitcoin-based funds have attracted $168 million in the same period.
Ethereum network activity dips
The total-value-locked (TVL) across the Ethereum ecosystem has dropped from 18.41 million ETH to 12.79 million ETH so far in 2023. That underscores a reduced availability of funds, resulting in lower yields for investors, as JP Morgan analysts also warned recently.
The declining TVL has accompanied a drop in the Ethereum network's gas fees, which reached a yearly low on Oct. 5.
Ethereum's NFT volumes and unique active wallets have also dropped by 30% and 16.5% in the last 30 days, according to Dapp Radar.
That includes declines in the key metrics of popular apps, including decentralized exchange Uniswap V2, DEX aggregator 1inch Network, Ethereum staking provider Lido, and others.
Ethereum technical analysis
Ethereum price technicals meanwhile show a potential rebound toward its 50-day exponential moving average (50-day EMA; the red wave) near $1,665.
However, looking broadly, ETH/USD has been paining a bearish continuation pattern called an ascending triangle.
As a result, a break below the triangle's lower trendline risks crashing the price by as much as the pattern's maximum height. In this case, ETH's price can drop to $1,465 and $1,560 in October 2023, depending on the breakdown point.
Short-term, a break above the 50-day EMA could have ETH's price rise toward the triangle's upper trendline near $1,730 in October 2023, coinciding with the 200-day EMA (the blue wave).
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Canadian regulatory body clarifies stablecoin rules for exchanges and issuers
The Canadian Securities Administrators (CSA) has provided guidance to exchanges and cryptocurrency issuers on its interim approach to what it calls value-referenced crypto assets, with a particular focus on stablecoins.
On Oct. 5, the umbrella organization of Canada’s provincial and territorial securities regulators published a clarification saying it may allow trading of certain cryptocurrencies that reference the value of a single fiat currency, subject to terms and conditions.
In February, the CSA reaffirmed its view that stablecoins “may constitute securities and/or derivatives,” which Canadian crypto exchanges are prohibited from trading.
However, if issuers maintain an appropriate reserve of assets with a qualified custodian and crypto exchanges offering stablecoins make “certain information related to governance, operations, and reserve of assets publicly available,” then the CSA could allow those assets to be traded.
CSA Chair and Chair and CEO of the Alberta Securities Commission, Stan Magidson, said in a statement:
“This interim framework, which we will build upon in the future, sets certain standards to help ensure that investors receive the information they need about the assets they are purchasing, including the risks associated with them.”
The CSA cautioned that fiat-backed crypto assets satisfying the terms are still risky and should not be viewed as endorsed or risk-free.
In August reported that regulatory clarity in Canada had generated greater interest in crypto from institutions.
In July, the CSA issued guidance on staking, stating that it was allowed, but lending opportunities are limited, and the proportion of “illiquid” assets is restricted.
Stablecoin market capitalization has been in decline over the past 18 months or so and is currently at $123 billion, representing around 11% of the total crypto market cap.
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Bitcoin due new local low? Watch these BTC price levels as $28K rejects
Bitcoin rejected at $28,000 after the Oct. 5 Wall Street open as a return toward six-week highs failed.
Bitcoin sees swift comedown after new $28,000 retest
Data followed BTC price action as bulls attempted to match levels from earlier in the week.
This encountered problems just above the $28,000 mark, however, with the subsequent hourly candle sending the market down up to $700, or 2.5%.
Commenting on the status quo, on-chain monitoring resource Material Indicators was unsurprised. Its proprietary trading tools had warned of a fresh downturn, it said, and the chain of events could still repeat.
“If you didn't see this rejection coming, then you might want to evaluate your tools, because both TA and Trend Precognition indicated a high probability of a rejection,” part of an X post stated.
“That doesn't mean we won't see another attempt, because we probably will.”
Continuing, Material Indicators co-founder Keith Alan eyed a possible trading range for BTC/USD going forward, noting that the current spot price zone was the site of “key” support/resistance flips in prior bull markets.
“So far, Key Moving Averages are serving as strong technical resistance (and support). Breaking this range to the upside is a possibility this month. If it happens, a lot of people are going to get rekt along the way,” he told X subscribers.
“A close above the 200-Week MA would fuel bullish hopium. A close below the 21-Week MA keeps BTC ranging between $25k - $28k until something breaks.”
At the time of writing, the 200-week and 21-week MA stood at $27,970 and $27,868, respectively.
Others were more optimistic, with Michaël van de Poppe, founder and CEO of trading firm MN Trading, describing Bitcoin as “very much ready” to tackle $30,000 resistance.
“Few levels of importance for Bitcoin here,” he wrote in X analysis the day prior.
“Holding above $27,200 would be substantial for upwards continuation, but preferably is a retest at $26,700-26,900 before we'll continue the rally to $30,000. Sentiment flipped quite fast.”
Trader taps RSI for BTC price bottom
Elsewhere, popular trader and X commentator Ali revealed a BTC price trading method which he argued had tracked recent local tops and bottoms.
This revolved around the relative strength index (RSI), which on four-hour timeframes had fluctuated between approximately 30 and 75 since late August.
“Currently, the RSI stands at 51. Patience is key! We might be best waiting for the RSI to drop below 30.35 to buy the dip!,” part of accompanying commentary advised.
Ali uploaded a chart showing a classic “sell” signal coming at the start of October, implying a new “buy” signal could come next — alongside a BTC price local low.
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FTX exploiter moves $36.8M in Ether as Sam Bankman-Fried’s trial starts
The crypto wallet address linked to the FTX exploiter moved roughly $36.8 million worth of Ether in the last 24 hours amid the ongoing court trials of the defunct crypto exchange’s ex-CEO, Sam Bankman-Fried (SBF).
Accounts linked to FTX and FTX.US were drained of $600 million on Nov. 11, 2022, hours after the crypto exchange had filed for Chapter 11 bankruptcy. At the time, FTX general counsel Ryne Miller informed traders about the hack caused by malware:
“FTX has been hacked. Chat is open. Please don’t go to the FTX site, as it might download Trojans. Note that some funds were retrieved.”
After nearly 10 months of silence, the FTX exploiter began siphoning out the stolen funds, starting with a transfer of 10,250 ETH worth $17.1 million via four addresses between Sept. 30 and Oct. 1, confirms data from Spot On Chain.
The exploiter initially held 175,496 ETH ($294 million). However, the current balance in their portfolio has come down to $196.014 million, as shown below.
Since Sept. 30, a total of 67,500 ETH has been transferred out of five out of the 15 wallet addresses linked to the FTX exploiter.
Out of the lot, 64,948 ETH ($108 million) was transferred through the THORchain router and 52 ETH (worth $84,000) to the Railgun contract. The remaining 2,500 ETH ($4.19 million) was swapped for Bitcoin (tBTC).
The trial of SBF in connection with the collapse of FTX began on Oct. 3. The entrepreneur has pleaded not guilty to all seven counts of fraud and money laundering charges.
On the second day of the trial, the Department of Justice and SBF’s defense team provided their statements in front of the jury. While the DOJ continues to focus its arguments on SBF’s alleged role in misleading investors on the platform, the defense argued about Bankman-Fried being a young entrepreneur who made business decisions that “didn’t work out.”
Read more to stay updated on the latest developments around the SBF–FTX court trials.
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Time to ‘pull the brakes’ on Ethereum and rotate back to Bitcoin: K33 report
The relatively lackluster performance of nine new Ethereum futures exchange traded funds (ETFs) has prompted analysts at K33 Research to urge a “rotate back” into Bitcoin
In an Oct. 3 market report, analysts Anders Helseth and Vetle Lunde said that it’s “time to pull the brakes on ETH and rotate back into BTC,” with the initial trading volume of Ether futures ETFs only accounting for 0.2% of what the ProShares Bitcoin Strategy ETF (BITO) amassed on its first day of trading in Oct. 2021.
While the analysts noted that no one expected to see initial trading volume on the Ether futures ETFs “come anywhere close” to that of the Bitcoin futures ETFs — launched amid a raging bull market — the underwhelming first-day numbers “strongly” missed expectations.
This lack of institutional appetite for Ether ETFs caused Lunde to walk back on his previous advice of increasing ETH allocation to best capitalize on the ETF hype.
“The ETH futures ETF launch provides an important lesson for evaluating the impact of easier access to crypto investments for traditional investors: increased institutional access will only create buying pressure if significant unsatiated demand exists,” wrote Lunde.
“This is not the case for ETH at the moment.”
In the section of the report titled “more chop ahead,” Lunde explained that the vast majority of the crypto market lacks any meaningful short-term price catalysts and will most likely continue on its sideways trajectory for the foreseeable future.
In Lunde’s view, this landscape is only really favorable for Bitcoin, which has a potential spot for ETF approval to look forward to early next year, as well as the halving event which is currently on track for mid-April.
“The gravitational pull in crypto for the time being stays in BTC, with a promising event horizon down the line, still favoring aggressive accumulation.”
Ben Laidler, global markets strategist at eToro, charted a similar path ahead for crypto assets, albeit with a slightly more bearish sentiment.
In emailed comments to Cointelegraph, Laidler pointed to current macro trends as a potential downward trigger for prices of mainstay crypto assets like Bitcoin.
“The Fed and oil prices have been consistently powerful macro influencers on the crypto market in the past couple of years,” wrote Laidler. “At the late stage of the rate hike cycle we’re in, the market is looking for further good news to push on, but with oil prices rising again, this could have a cooling effect on sentiment.”
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Bitcoin traders hope $27K holds as BTC price ignores volatile US dollar
Bitcoin stayed glued to $27,500 at the Oct. 4 Wall Street open as attention continued to focus on rampant United States yields.
Analysis: $27,000 now "key" for BTC price
Data showed a calm day for BTC price action while U.S. dollar volatility ruled.
After its own spate of hectic trading to start the week, Bitcoin was once more seeking direction, with market observers marking out key price points.
Popular trader Skew flagged market takers selling toward $27,600, lending “importance to this price level reclaim.”
“Get that reclaim & decent pop will come,” he predicted in part of the day’s X analysis.
Fellow trader Crypto Tony additionally highlighted $27,000 as the line in the sand to the downside.
Updating his own trading strategy, meanwhile, trader Mark Cullen likewise placed emphasis on $27,000 holding as support.
“Bitcoin getting a reaction from its first attempt into my zone & a tap of the break out trendline,” accompanying commentary stated.
“Market conditions in Tradfi aren't great so pressure's down. Lets see if BTC can hold this area for a while longer, until other markets stabilize. Holding 27k is key for $BTC!”
Bitcoin bides its time as dollar sees sharp retrace
As Cullen and others explained, the mood on legacy markets was decidedly less stable than Bitcoin on the day.
This came thanks to U.S. 30-year bond yields surging to 16-year highs — something which got commentators wary of a potential meltdown to come.
Skew suggested that this angst over how macro forces would play out was responsible for the lack of significant BTC trading volume.
“Not much besides dipping toes in the water kind of bid other than that it's perps mostly buying,” another X post stated earlier.
“Market is likely trying to digest everything that is going on terms of risk parameters and exposure. Many are capitulating to cash imo under market distress.”
U.S. dollar strength delivered upheaval of its own prior to the Wall Street open, with the U.S. dollar index (DXY) swiftly dropping from levels not seen since Q4 last year.
As customary in recent times, BTC/USD continued to shake off snap DXY moves.
Commenting on the situation, Sven Henrich, founder of NorthmanTrader, showed that long term, DXY chart performance was behaving as expected.
“Amid all the chaos & volatility one amazingly consistent clean chart: The US dollar respecting the channel trend lines,” he told X subscribers.
“Negative divergence on recent highs at top of the channel. What happens with this will likely be one of the key market drivers for the rest of the year.”
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BTC Drops Almost 3% Following FOMC's Assertive Remarks; Awaits US CPI Insights
In the wake of the Federal Open Market Committee's (FOMC) recent assertive commentary, Bitcoin price experienced a near 3% dip.
The central narrative hinged on the minutes from the Federal Reserve, wherein policymakers underscored the necessity for restrictive policy measures to persist for an extended period.
Their consensus revolved around the essence of treading cautiously, even as they acknowledged the precarious balance between the risks of excessive tightening and the imperative of steering inflation toward a 2% trajectory.
US CPI Takes Center Stage in Today's Trading Activities
The US's annual headline inflation for September is projected to slightly retract to 3.6%, a marginal decrease from August's 3.7%.
Concurrently, the core annual inflation is poised to register a minor dip, moving from the previous 4.3% to an anticipated 4.1%.
Amidst this landscape, the critical concern dominating financial discussions is whether inflation might stagnate on its route to the 2% target, potentially proving to be more resilient than initially estimated.
While this intricate situation may not influence markets immediately, its eventual unfolding promises to reshape how data interpretations are approached.
In the current scenario, the available metrics might not offer substantial insights beyond indicating a continued moderation in inflationary pressures.
However, keen market observers are setting their sights on the bond market's reactions, especially given yesterday's contradictory trends.
The evolving dynamics promise to offer intriguing insights into Bitcoin's trajectory in the days to come.
Bitcoin Price
As the crypto world's poster child, Bitcoin, currently trades at $26,800, there seems to be a noticeable movement in the market. Over the past 24 hours, the currency has registered a 1% decline, as per the data obtained.
Generating a whopping 24-hour trading volume of $12.71 billion, Bitcoin retains its dominance, ranking #1 on CoinMarketCap. Its current market cap stands at approximately $523.28 billion.
In terms of supply, the crypto has a circulating volume of 19,511,187 BTC, approaching its maximum limit set at 21,000,000 BTC.
Bitcoin Price Prediction
The 4-hour chart offers a clearer image of Bitcoin's trajectory. A pivotal point at $26,486 provides a foundation for the coin's price movement.
If Bitcoin were to rally, it would face immediate resistance at $28,020. Subsequent barriers stand at $29,032 and further at a significant $30,565.
Conversely, should it experience a decline, immediate support forms at $25,474, with further cushions at $23,941 and $22,929.
Delving into technical indicators, the Relative Strength Index (RSI) sits at 46. While it doesn't suggest an immediate overbought or oversold condition, an RSI below 50 leans towards a bearish sentiment.
Moreover, the 50-0ay Exponential Moving Average (EMA) stands at $27,253, slightly above the current price. This factor points towards a short-term bearish trend.
From the perspective of chart patterns, Bitcoin recently broke below an upward channel at $27,350. The bearish crossover of the 50 EMA further amplifies the selling trend in the market.
In conclusion, the current trend for Bitcoin is bearish, especially if it remains below the $27,253 mark. The market dynamics and technical analysis suggest traders tread cautiously and keep a vigilant eye for any further breakout or movement in either direction.
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Bitcoin ‘death cross’ sees BTC price dip $1K, erasing ‘Uptober’ gains
Bitcoin broke lower on Oct. 11 as $27,000 saw its first real test since the start of the month.
BTC price battles for support after daily “death cross”
Data tracked increasing overnight BTC price weakness, including a trip to $26,978 on Bitstamp.
Bitcoin thus came full circle for October, erasing all of the gains seen after the September monthly close.
Analyzing intraday performance, popular trader Skew noted the interplay between two moving averages (MAs), along with a so-called “death cross.”
In March, he noted the 100-day MA crossed above the 200-day counterpart — a “golden cross” event that traditionally marks upside to come.
“Here we technically just had the death cross, so if we head lower kinda leaning towards a squeeze eventually to test 200D MA again before trending,” part of X (formerly Twitter) commentary read.
The daily chart shows the 200-day MA acting as stiff resistance for BTC/USD despite its early “Uptober” gains. Since the death cross was confirmed on Oct. 9, the pair has lost almost $1,000, or 3.4%.
On shorter timeframes, Skew highlighted $27,300 and $26,800 as key levels.
“Bears have price control here with loss of 4H EMA trend, if price recovers above $27.3K I will see that as strength,” he wrote.
“More importantly any recovery needs to be spot driven from here imo, wont rule out a squeeze. Below $26.8K this will look weak to me.”
Fellow trader Crypto Tony revealed that he was already short BTC, triggering the change as Bitcoin dropped below $27,200.
Popular trader Jelle meanwhile agreed that either recovery or breakdown would result from current levels at $27,000, noting that “the untapped liquidity has been taken out.”
“Would have expected a more immediate buyback — this suggests the market wants to traverse lower,” part of his latest commentary added.
Will Bitcoin print pre-halving “macro low?”
Current BTC price behavior further fueled conservative views of how Bitcoin might develop in the coming months.
Among those maintaining significantly lower levels, including a return to $20,000 as a possibility, was the popular trader and analyst Rekt Capital.
After eyeing a potential long-term breakdown from the July highs, Rekt Capital reiterated that the BTC/USD weekly chart so far lacked a macro higher low versus late 2022.
An accompanying chart gave a target of around $20,000 as part of the build-up to Bitcoin’s next block subsidy halving event in April 2024.
Should a macro low hit, Bitcoin would be copying behavior from last cycle’s pre-halving year, 2019, it showed.
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Why is XRP price down today?
XRP price is down today, mirroring declines witnessed elsewhere in the cryptocurrency market.
On Oct. 10, XRP’s price dropped nearly 1.5% to $0.50, bringing its week-to-date returns to -4.5%. The token’s sell-off in the week mirrored bearish sentiments across the top-ranking crypto assets, with Bitcoin and Ether down 1.8% and 3.5%, respectively.
Let’s take a close look at the catalysts moving XRP’s price lower today.
XRP drops amid Israel-Palestine conflict
Crypto traders have ditched most top cryptocurrencies in the face of an escalating Israel-Palestine conflict. XRP is no different.
For instance, the crypto market’s total capitalization has dropped by over $32 billion since Hamas attacked Israel over the weekend. On the other hand, demand for traditional safe havens like U.S. Treasurys and gold has jumped.
Cryptocurrencies’ immediate reaction to geopolitical conflicts has been mostly negative in the past. For instance, the crypto market’s valuation dropped over 11% when the Russia-Ukraine conflict broke out on Feb. 24, 2022. The market pared most of these losses shortly after.
Big XRP inflows to crypto exchanges
XRP’s decline this week further coincides with massive token transfers over the weekend and at the week’s beginning.
On Oct. 9, an address associated with Ripple moved 60 million XRP worth about $30 million to an unknown wallet, data resource Whale Alert updated. Another wallet transferred over $15 million to the Bitstamp crypto exchange.
XRP technical analysis hints at 50% crash in 2023
From a technical perspective, XRP’s recent price action has painted what appears to be a bump-and-run-eversal (BARR) pattern.
BARR forms when excessive speculation drives an asset’s price higher speedily, eventually leading to a “bull trap” situation. The pattern is confirmed after the price breaks below its lead-in trendline, falling by as much as its maximum height, as illustrated below.
Thus, the bearish target for XRP price in this scenario is a 50% drop to $0.25 over the next few months.
Conversely, the downside outlook may become invalid if XRP price reclaims the lead-in-trendline and its 50-3D (the red wave) and 200-3D (the blue wave) exponential moving averages (EMAs) as support.
This bullish case would put XRP’s price next upside target at its 0.236 Fib line near $0.69, up around 40% from current price levels.
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SBF seeks to probe FTX lawyers’ roles in $200M Alameda loans
Sam Bankman-Fried’s legal team is looking for permission to probe the alleged involvement of FTX lawyers in the issuance of $200 million worth of loans from Alameda that were approved by Gary Wang.
As previously reported in the build-up to the highly anticipated trial, an Oct. 1 court ruling provisionally barred Bankman-Fried from apportioning blame to FTX lawyers who were allegedly involved in structuring and approving loans between Alameda and FTX.
United States Judge Lewis Kaplan granted the government’s motion and ruled that Bankman-Fried's legal team would have to request permission to make any mention of FTX lawyers' involvement throughout the trial.
Following the initial cross-examination of former FTX co-founder Gary Wang by the prosecution on Oct. 9, the defense is now seeking permission to question Wang over the alleged involvement of FTX counsel in structuring loans issued to FTX by Alameda.
A letter filed on Oct. 9 highlighted the government’s questioning of Wang over a series of personal loans worth up to $300 million from Alameda that FTX used to fund venture investments. Wang had also used some of the funds to purchase a home in the Bahamas.
During the prosecution's line of inquiry, Wang said that either Bankman-Fried or FTX lawyers had presented him with loans which he was then directed to sign.
Bankman-Fried’s attorneys argue that the prosecution has already established that FTX lawyers were present and involved in structuring and executing the loans and intend to carry out their own line of questioning over the scope of FTX counsel involvement.
A screenshot of the defense's letter requesting permission to question Gary Wang over the involvement of FTX lawyers in the structuring of loans to Alameda and senior executives. Source: Court Listener.
The defense adds that it could potentially introduce promissory notes that memorialized the loans to Wang, who has previously indicated to the prosecution in proffer meetings that he did not suspect FTX lawyers would coerce him to sign illegal agreements:
“Mr. Wang's understanding that these were actual loans - structured by lawyers and memorialized in formal promissory notes that imposed real interest payment obligations - is relevant to rebut the inference that these were simply sham loans directed by Mr. Bankman-Fried to conceal the source of the funds.”
Journalist Ana Paula Pereira is on the ground in New York covering the trial of Bankman-Fried. Her latest report from the Federal District Court in Manhattan highlights the defense's efforts to paint Bankman-Fried as a young entrepreneur who tripped up amid the rapid growth of FTX and Alameda.
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Local Web3 community launches ‘Crypto Aid Israel’ to help displaced citizens
A collective of local leaders in the cryptocurrency space, including 42Studio, MarketAcross, Collider Ventures, CryptoJungle, Nilos, Blockchain B7, Efficient Frontier, Ironblocks, the Israel Blockchain Association, Bits of Gold, as well as Cointelegraph, have joined together to establish Crypto Aid Israel, a global fundraiser to help displaced Israeli citizens in need of humanitarian aid.
The ongoing and unfolding conflict has taken a heavy toll on the local civilian population, with casualties currently estimated in the thousands.
A recent report from Israeli news source Haaretz indicates the attacks on Israeli's local population have resulted in the deaths of at least 700 Israelis "and nearly 2,400 wounded since Hamas' surprise invasion on Saturday morning. In Gaza, the Palestinians report 560 dead and over 2,700 wounded."
According to the CEO of CryptoJungle, Ben Samocha, Crypto Aid Israel's aim is to provide immediate help for those affected:
“We hope to raise the necessary funds to provide food and shelter for families who lost their homes. We are also hoping to provide hygiene and medical products for the bombarded Israeli civilian populace…”
Crypto Aid Israel is hosting a multisig wallet, overseen by luminaries in the local Web3 community. In order to donate and help their cause, you can visit their website here.
Per a press release shared, Crypto Aid Israel’s creators are urging those who want to help to be cautious when it comes to verifying that their aid is going to the right wallet:
“It is incredibly important to consider before donating that due to potential phishing scams and cyber attacks, please compare the crypto wallet address to the verified one on the official website, so that funds aren’t sent to addresses that may have been sent to you through other sources.”
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South Korean Crypto Fraudster Jailed for 7 Years
A convicted South Korean crypto fraudster has been sentenced to seven years in prison.
Per Newsis and Segye Ilbo, a division of the Suwon District Court sentenced an unnamed individual in their 30s to jail after hearing how they defrauded victims of some $2.2 million.
The court heard that the individual, identified only as “A” for legal reasons, duped some 30 investors that he met via acquaintances and mobile chat apps from January 2020 to February 2023.
A, the court was told, convinced their victims to deposit crypto in a wallet.
The fraudster promised victims that they would receive considerable gains in a “short period of time.”
A said they would soon return the stake money, in addition to bonus payments.
But when A failed to deliver on these promises, the investors complained.
The court heard that A tried to persuade the victims not to take their grievances to the police by telling them:
“I am making a lot of money from stock market investments, so I will make up for your losses.”
But prosecutors explained that A had actually suffered heavy losses after investing their victims’ crypto.
To make up for this, A took out a series of loans and accrued a “significant amount of debt.”
The court concluded that A “had no intention or ability to actually pay the victims the money [they] had promised.”
South Korean chat apps have become a hunting ground for crypto fraudsters, with many infiltrating or setting up “crypto investment study groups” on platforms such as KakaoTalk.
The court also heard that the tokens were now irretrievable and that A had no means of compensating the victims.
The presiding judge said,
“Considering the number of victims and the amount of damage caused, the nature of the crimes committed in this case is very serious.”
South Korea: Crypto Fraud Cases Rising?
Suwon, a major city on the outskirts of Seoul, is the unofficial capital of the South Korean tech industry.
The city is home to the headquarters of Samsung’s electronics division, as well as scores of other notable IT industry players.
But in recent years, the city has also become notable for the number of crypto fraud-related cases to have passed through its courts.
Earlier this month, a 70-year-old man was jailed by a Suwon court for playing a part in a crypto-powered dating app-based fraud ring.
Prosecutors in the city also indicted the CEO and a Vice President of a crypto-powered “virtual fashion items” marketplace in May this year.
Officials think the duo duped some 435 “victims” out of around $333 million in crypto and fiat.
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Bitcoin bulls encircle $28K as trader says ‘big’ buyer must step in
Bitcoin kept up renewed pressure on $28,000 into the Oct. 8 weekly close as geopolitical uncertainty entered traders’ radar.
Trader: Bitcoin behavior at resistance “not the best”
Data showed BTC price performance avoiding downside volatility over the weekend.
The pair recovered from a snap retest of $27,000on Oct. 6, thanks to surprise United States employment data which diverged from policy tweaks by the Federal Reserve.
Now, the $28,000 resistance formed the main point of interest for market participants going into the new week.
In low timeframe (LTF) analysis of exchange order books, popular trader Skew said that major bidding power was still required in order to flip $28,000 to support.
“So on LTF we can see clearly the market is still trading $28K as resistance. Going to require a big spot buyer to crack that area imo,” he told X (formerly Twitter) subscribers.
“Perps are shorting every LTF bounce into $28K as well.”
Skew further described Bitcoin’s reaction to both that level and the 200-day moving average (MA), currently at $28,040, as “not the best kind.”
Fellow trader Daan Crypto Trades meanwhile cautioned on going short BTC should a sudden breakout occur, as this might form the start of further upside.
“I will say that with BTC sitting around this big $28K level which has the Daily/Weekly 200MA sitting there, I am personally not very keen on shorting any deviations above,” part of an X post stated.
“In the past, we’ve often seen a weekend breakout at these kinda spots which tend to not retrace as easily as they otherwise would.”
An accompanying chart showed the closing price of last week’s CME Bitcoin futures markets, this apt to form a price “magnet” going into the new week.
“Trading around the CME price is best practiced during a ranging & choppy environment,” he added.
“We are still in such environment but that would likely change upon a strong break above this region. Hence me not being too eager to short immediately in case we'd see a weekend pump.”
Analyst renews $30,000 BTC price forecast
In the wake of events in Israel, others meanwhile flagged geopolitical instability as a potential BTC price catalyst to come.
Among them was Michaël van de Poppe, founder and CEO of trading firm MN Trading.
“Now; market perspective it’s going to be a volatile week,” he wrote in part of X analysis.
“My idea is that Bitcoin continues the upwards grind & potentially reaches $30K as worldwide uncertainty grows.”
Van de Poppe had previously forecast a trip beyond the $30,000 mark in October, traditionally Bitcoin’s strongest calendar month.
At just under $28,000, BTC/USD was up 3.5% month-to-date at the time of writing, per data from monitoring resource CoinGlass.
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Bitcoin bulls keep pressure on $28K while calls for BTC price dip grow
Bitcoin eased volatility into Oct. 6 as BTC price downside preparations returned.
Bitcoin keeps liquidations limited amid long, short “squeeze”
Data covered a flatter 24 hours for BTC/USD after a failed retest of $28,000.
After lingering in a narrow range around 1.5% lower, the largest cryptocurrency was again pushing toward the $28,000 mark ahead of the Wall Street open, yet fielded fresh concerns from market participants over potential losses to come.
Popular trader Daan Crypto Trades eyed an ongoing tussle between two key moving averages (MAs) on one-day timeframes.
“Whether the Daily 200MA (Purple) or the Daily 200EMA (Blue) gives in first, will likely determine the trend for the rest of October if I had to guess,” he wrote alongside a chart in an X post on Oct. 4.
“$27K & $28K. The battle continues.”
Daan Crypto Trades subsequently flagged increasing open interest (OI) across exchanges, this apt to cause a squeeze of shorts followed by longs, respectively.
“This has usually been a short squeeze (up) into long squeeze (back down). We saw this yesterday again. Good to keep an eye on this region,” he suggested.
Data from monitoring resource CoinGlass showed negligible liquidations across both long and short BTC positions through Oct. 6.
Lack of lower BTC price levels “surprise”
Monitoring resource Material Indicators meanwhile turned its attention to whale trading behavior over the course of the week.
Dividing whales into volume-based cohorts, it showed different “classes” of whales making contradictory moves. Orders worth between $100,000 and $1 million — the class Material Indicators often says is the main driver of spot price action — have increased exposure, but failed to spark a broader uptrend.
“This week, purple bought aggressively and sold the local top. They then stared buying dips for a NET +$13.8M in market orders on @binance over the last 7 days,” it explained.
Data further showed other whales net selling to the tune of nearly $60 million over the same period.
“We could speculate whether or not that’s part of the FTX liquidation,” Material Indicators added, referencing the potential liquidation of assets from defunct exchange FTX.
“Doesn’t really matter who it is, but if there is any surprise, it’s not that price hasn’t gone higher…it’s that it didn’t go lower.”
On the topic of exchange-based setups, popular trading account Exitpump likewise spied a potential liquidity grab being prepared below $27,400.
“Price always likes to do multiple kisses into resistance block forming a top,” part of recent analysis summarized.
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SBF was ‘very resistant’ to investors on FTX board: Paradigm co-founder
Sam “SBF” Bankman-Fried was “very resistant” to having investors join the board of directors at FTX, claims Matthew Huang, co-founder and managing partner of crypto investment firm Paradigm.
Paradigm and a number of venture capital firms, including Sequoia, Temasek and BlackRock, were burned by their funding of the now-bankrupt crypto exchange, with all facing scrutiny — and subsequently issuing statements — on their investment in FTX.
Testifying on the third day of Bankman-Fried’s trial in a New York Federal Court, Huang claimed Bankman-Fried believed having investors on FTX’s board of directors wouldn’t bring much to the table.
FTX’s board reportedly consisted of three people: Bankman-Fried, an unnamed lawyer from Antigua and Barbuda — the same country where FTX was incorporated — and Jonathan Cheesman, a former FTX executive who stepped down from the board in June.
Huang engaged in a handful of conversations with Bankman-Fried ahead of Paradigm’s $125-million investment in the exchange’s staggering $900-million Series B funding round it closed in July 2021.
Huang admitted to not conducting enough due diligence and that he relied too heavily on information supplied by Bankman-Fried.
Despite being concerned by the lack of formal structure at FTX and its potential entanglement with its sister hedge fund, Alameda Research, Huang said investors were lured in by the rapid expansion of FTX’s market share in the crypto industry.
Still, Huang noted that he and other investors at Paradigm were concerned that Bankman-Fried may have been spending more time working on Alameda instead of FTX, a distraction that would have been at the expense of Paradigm’s investment.
Additionally, Huang noted that there were concerns that Alameda may have been receiving preferential treatment from FTX. If these concerns turned out to be true, Huang said he was fearful of the reputation damage it may inflict on the company.
Huang said he was led to believe by Bankman-Fried that Alameda was not being provided with any privileged treatment by FTX. The same day, FTX co-founder Gary Wang testified that Alameda was given access to a near-unlimited flow of capital from the exchange.
Additionally, Huang said he had no knowledge of the alleged commingling of funds between FTX and Alameda Research.
The prosecution asked Huang if his decision to invest in FTX would’ve changed if he’d been told the exchange was allegedly using customer deposits for investment purposes.
“Yes,” Huang replied. “It’s generally understood that customer deposits are sacred.”
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Bitcoin still beating US dollar versus ‘eggflation’ — Fed data
Bitcoin is beating inflation better than the United States dollar, the U.S. Federal Reserve says — but unintentionally.
In a blog post first released in June 2022 and since updated, the St. Louis Fed compares buying eggs with BTC compared to dollars — still with surprising results.
Bitcoin vs. U.S. dollar: “Eggflation” has gone nowhere
Bitcoin hodlers arguably have many better use cases for their BTC holdings than buying eggs, but that is the topic of a dedicated Fed blog post that attempts to demonstrate Bitcoin’s uncompetitive buying power versus the dollar.
To do so, its anonymous author measured the price of a dozen eggs in BTC and U.S. dollars since January 2021.
“The price fluctuates quite a bit, between 2829 and 6086 [satoshis], which is much more than it did for the U.S. dollar price,” the post concludes.
“Plus, you’d need to add a bitcoin transaction fee, which has been about $2 lately, but which can spike above $50 on occasion. Hopefully, if you were making this purchase with bitcoin, you’d put many many more eggs in your basket.”
The charts included nonetheless show that since reaching a peak in both currencies in December 2022, the number of satoshis required to purchase the same dozen eggs has decreased more than the equivalent in U.S. dollars.
BTC hodlers require 70% fewer sats for the purchase as of August 2023, the latest month for which Fed data is available, versus 58% fewer dollars.
Compared with the start of 2021, egg cost is higher for both currencies — 39% versus 73% for U.S. dollars and BTC, respectively. Here, however, the arbitrary timeframe comparison remains less than helpful.
At the time, BTC/USD traded at practically the same levels as at present, while the U.S. Consumer Price Index (CPI) year-on-year increase was under the Fed’s own 2% target. With the latter now a thing of the past, only a longer-term synopsis provides real insight into Bitcoin’s performance.
The price of eggs is a fraction of what it was during Bitcoin’s last pre-halving year in 2019. “Eggflation” seen in 2023 is a comparative blip on the landscape.
In dollar terms, the picture is one of solid price increases — the average in mid-2019, for example, was barely above $1.20 per dozen, or 40% less than now.
Recession looms large
As reported, attention is focusing on the greenback this month as the U.S. Dollar Index balloons to near one-year highs.
Actions by foreign states may seek to redress the imbalance as their currencies suffer, analysts suggest, while under the hood, the U.S. economy is showing warning signs.
Recession in 2024 is becoming increasingly likely, with even the Fed’s own data putting the odds at near 60% in September, while bond yields skyrocket in a fit of what is known as “bear steepening.”
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Scammer Makes Off Around $400K in 24 Hours by Targeting Friend.tech Users Through SIM Swapping Scams
A hacker has stolen approximately $385,000 worth of digital assets in the past 24 hours by performing SIM-swapping attacks on friend.tech users.
In a recent post on X (formerly Twitter), blockchain sleuth ZachXBT revealed the scammer had pilfered 234 ETH over the past 24 hours by SIM-swapping four different friend.tech users.
Following the incident, X user @sumfattytuna revealed that they were one of the victims of the most recent chain of SIM-swap attacks.
“Got sim swapped. Apparently, dude was able to do it from an Apple store and switched it to an iPhone SE. Don’t buy my keys, that wallet is compromised," the user posted to X.
The recent wave of SIM-swap attacks comes as another group of friend.tech users lost all their funds after falling victim to the same attack earlier this week, resulting in around 109 ETH stolen.
$20 Million of Friend.tech's TVL is At Risk
According to Manifold Trading, a company dedicated to developing tools for the industry, $20 million out of friend.tech's total locked value of $50 million is at risk.
"If you assume 1/3 of FriendTech accounts are connected to phone numbers, that's $20M at risk from sim-swaps," the company wrote in a recent post on X.
Manifold Trading also noted that friend.tech's current setup "technically allows a rogue dev to reconstruct private keys via Shamir-Secret-Sharing shares that they can recover from user data in their database," concluding that the whole TVL is at risk.
To mitigate this risk, Manifold Trading recommends that friend.tech enhances its account security protocols by implementing two-factor authentication (2FA).
Friend.tech offers users the opportunity to acquire "keys" that provide entry into exclusive chat rooms with specific individuals.
The SIM-swap scam is a fraudulent scheme where scammers illicitly acquire the victim's phone number and exploit it to gain access to their social media and cryptocurrency accounts by bypassing authentication measures.
Friend.tech Sees Continued Growth
Friend.tech has seen a continued growth in user base and protocol fees.
According to Dune Analytics, the total protocol fees have reached 11,764 ETH (worth over $19 million), with 9,870,682 in cumulative transactions.
September 14 remains the record-breaking day, with ETH 616 in fees recorded. At the time, total fees were halfway towards their current all-time high.
Crypto personalities like Cobie and HsakaTrades, as well as renowned figures like Grayson Allen and Garry Tan, have joined the platform, bringing their dedicated followers with them.
In an attempt to widen its user base, friend.tech even attracted creators from platforms like OnlyFans, offering them access to exclusive content and private group chats.
Friend.tech's model is built on the notion that influencers play a pivotal role in the success of crypto startups.
Operating on Coinbase's blockchain network Base, friend.tech initially injected some excitement into a chain that had been plagued by token scams.
Its rapid increase in activity, largely driven by automated trading bots seeking to capitalize on the platform's success, even pushed Base to momentarily surpass Ethereum in terms of transactions per second.
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Why is XRP price up today?
XRP price is up today following news that Federal District Judge Analisa Torres of the Southern District of New York ruled against the United States Securities and Exchange Commission’s contention that XRP is a security.
XRP immediately reached $0.55, but subsequently gave away part of the gains on Oct. 4.
Ripple’s favorable court decision spurred mixed opinions from experts
In an Oct. 3 court order, Judge Torres claimed that the matter did not require an order that “involved a controlling question of law,” which is an essential condition for approving an interlocutory appeal. This decision sparked a debate among crypto law experts in the community.
Bill Hughes, a lawyer at blockchain firm ConsenSys, told Cointelegraph that the rejection of the SEC’s appeal was generally expected, given that appeals of this nature are not usual during this part of a trial.
Similarly, Gabriel Shapiro, general counsel at Delphi Labs, warned XRP bulls to temper their enthusiasm, as the SEC could still appeal the case later. The regulator would need to wait until after the trial’s conclusion, which is scheduled to begin on April 23, 2024.
Ripple gets approval for a Singapore digital payments license
In an Oct. 4 statement, Ripple announced that its local entity, Ripple Markets Asia Pacific, was granted a Major Payment Institution license for digital payment token services in Singapore. This decision will allow the company to continue operations in the city-state after receiving in-principle approval from the Monetary Authority of Singapore in June.
According to Ripple, the license allows its subsidiary to further scale its On-Demand Liquidity service offering, an enterprise solution that uses XRP as a bridge between two currencies. This eliminates the need for prefunding of destination accounts and reduces operational costs.
Ripple picked as a contender for Georgia’s CBDC pilot
On Sept. 28, the National Bank of Georgia (NBG) announced that nine companies, including Ripple, would take part in the research of its central bank digital currency (CBDC). Known as the digital lari, or GEL, the project aims to be programmable and support asset tokenization.
The Eastern European country, with a population of 3.7 million, intends to launch a limited-access live pilot environment, where only one of the participating companies will be selected to move forward. The NBG announced that it was considering issuing a CBDC in May 2021, without providing a timeline for it.
There was modest impact on XRP derivatives demand
The demand for XRP futures did not present meaningful changes, with the open interest — which measures the aggregate notional of contracts still in play — increasing by 13% versus the previous day. Furthermore, the current $590 million open interest falls short of the $794 million from one month prior.
Notice that the XRP futures funding rate has consistently stayed below 0.01% every eight hours, which is equivalent to 0.20% per week. Positive values indicate that long positions are covering the cost of leverage, but a funding rate below 1% per week is generally not considered expensive.
Considering the inability to surpass the $0.54 mark, which would have been the highest level in six weeks, and the lack of demand for leverage through futures contracts, it’s reasonable to doubt whether the recent positive news flow has convinced investors that XRP is about to enter a bull run.
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Bitcoin bull market awaits as US faces 'bear steepener' — Arthur Hayes
Bitcoin flipping full bull could come courtesy of the United States government, a new prediction says.
In an X thread on Oct. 4, Arthur Hayes, former CEO of crypto exchange BitMEX, eyed ballooning yields as precursor to a new Bitcoin and crypto bull market.
Hayes: Bitcoin bulls should eye U.S. "no way out" moment
U.S. treasury yields are “screaming higher,” and with that, Hayes believes that a macroeconomic flashpoint is only a matter of time.
The reason comes in the form of a so-called “bear steepener” — a phenomenon that describes long-term interest rates rising more quickly than short-term ones.
“Why do I love these markets right now when yields are screaming higher? Bank models have no concept of a bear steepener occurring,” he argued.
Given the current steep rise in the 2s30s curve — the difference between the 30-year and 2-year yields — combined with rising long and short-term interest rates, the pressure across the economy is rising.
“Due to the leverage and non-linear risks embedded in banks' portfolios, they will be selling bonds or paying fixed on IRS as rates rise. More selling, begets more selling, which is no bueno for bond prices,” Hayes continued.
The result should be clear — a return to mass liquidity injections, counteracting the quantitative tightening seen since late 2021 which has pressured crypto markets.
For Hayes, this cannot come without major casualties along the way. He concluded:
“The faster this bear steepener rises, the faster someone goes belly up, the faster everyone recognises there is no way out other than money printing to save govt bond markets, the faster we get back to the crypto bull market :). The Lord is my Shepherd, I shall not want.”
Separate data from TradingView shows the 30-year U.S. government bonds yield hitting 5% this week — a first since August 2007, before the Global Financial Crisis.
Continuing the discussion, Philip Swift, creator of statistics resource LookIntoBitcoin and co-founder of trading suite Decentrader, voiced his support for Hayes’ prognosis.
An accompanying chart showed Bitcoin’s relationship with treasury yields.
“That would be THE major catalyst for the Bitcoin bull market,” he commented about a theoretical return to money supply expansion.
U.S. debt sees its own "Uptober"
Alongside, the U.S. continues to add to its record-high national debt at an astonishing pace.
Two weeks after the debt tally passed $33 trillionfor the first time, the government increased its total by $275 billion in just one day.
This did not go unnoticed among financial commentators.
“In a single day, the US added more than half of Bitcoin’s entire market cap in debt,” Samson Mow, CEO of Bitcoin adoption firm Jan3, responded.
“That’s something like 10 million BTC . And yet there are still people that are unsure if $27k is a good price to buy.”
BTC/USD traded at around $27,500 at the time of writing.
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SEC asks judge to reject Coinbase’s motion to dismiss lawsuit
The United States Securities and Exchange Commission has asked a federal judge to deny Coinbase’s motion to dismiss a lawsuit by the regulator.
In an Oct. 3 filing in a New York District Court, the SEC hit back at claims in Coinbase’s dismissal motion and reiterated its belief that some of the cryptocurrencies listed on its platform were investment contracts under the Howey Testsubject to SEC registration.
“Each crypto asset issuer invited investors — including purchasers on Coinbase’s platform — reasonably to expect the value of their investment to increase based on the issuer’s broadly-disseminated plan to develop and maintain the asset’s value,” the SEC wrote.
The SEC asserted Coinbase has “known all along” that cryptocurrencies it sells are securities if they meet the Howey Test and alleged the exchange recognized this in its filings with the SEC.
The regulator also scrubbed Coinbase’s argument invoking the “major questions doctrine” which claimed the SEC has no authority over the crypto market until Congress says so.
“The SEC has not assumed for itself any new power to do what the federal securities laws do not already expressly authorize it to do,” the SEC said.
In an Oct. 3 X (Twitter) post, Coinbase legal chief Paul Grewal said the SEC’s arguments were “more of the same old same old” and asserted the assets it lists “are not securities and are not within the SEC’s jurisdiction.”
Grewal claimed the SEC’s arguments in its response would mean “everything from Pokemon cards to stamps to Swiftie bracelets are also securities.”
Miles Jennings, a16z crypto' general counsel, claimed in an X post that the SEC’s motion “has a lot of holes.”
Jennings added even if the court were to agree with the regulators main argument around investment contracts then the case “should still fail” as he believes the SEC’s definition of an investment contract has “endless breadth.”
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