The crypto market is showing signs of a bullish resurgence, with reports of an impressive $2 billion in inflows for May alone.
Alongside this positive trend, Ethereum (ETH) has seen a notable turnaround in investor sentiment as the long-awaited spot exchange-traded funds (ETFs) for the market’s second-largest cryptocurrency received approval from the US regulators last week.
Record-Breaking Month For Crypto Products
According to a recent report from research firm CoinShares, digital asset investment products consistently attracted inflows during the four weeks, amassing a total of $185 million.
May proved to be particularly fruitful, with inflows surpassing $2 billion. This achievement marks the first time on record that year-to-date inflows have exceeded the $15 billion mark, highlighting investors’ growing interest in the crypto market.
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Most inflows originated from the United States, with a net inflow of $130 million. However, it is worth noting that ETF issuers experienced outflows amounting to $260 million.
Switzerland also witnessed a significant uptick in investor interest, recording its second-largest weekly inflow this year at $36 million. Meanwhile, Canada witnessed a positive turnaround, with inflows of $25 million, despite experiencing a net outflow of $39 million in May.
Ethereum Rebounds With $200M Inflows
Per the report, Bitcoin (BTC) continued to dominate the crypto market, attracting inflows totaling $148 million. Conversely, short-Bitcoin products witnessed another week of outflows, amounting to $3.5 million, suggesting that sentiment among ETF investors remains largely positive for the leading cryptocurrency.
Ethereum, on the other hand, experienced a notable change in investor sentiment following the Securities and Exchange Commission’s (SEC) approval of a spot-based ETF that is expected to launch in July 2024.
CoinShares notes that this approval marked a turning point for Ethereum, which had endured ten weeks of outflows totaling $200 million. Interestingly, the positive news for Ethereum had a ripple effect on Solana (SOL), which received an additional $5.8 million in inflows last week.
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While direct investments in crypto assets have been thriving, blockchain equities faced a different scenario. In the past week alone, blockchain equities witnessed outflows of $7.2 million.
The report notes that since the beginning of the year, the sector has suffered outflows totaling $516 million, reflecting a challenging period for blockchain-related stocks.
The 1-D chart shows ETH’s sideways price action between $3,700 and $3,900 over the past 10 days. Source: ETHUSD on TradingView.com
At the time of writing, Ethereum has seen a 4% price drop in the last week, resulting in a trading price of $3,770. However, the second-largest cryptocurrency on the market still holds gains of 21%, as recorded in the 30 days.
Featured image from DALL-E, chart from TradingView.com
Core Scientific’s 104 megawatt Bitcoin mining data center in Marble, North Carolina
Carey McKelvey
AUSTIN — For five years, bitcoin miner Core Scientific has quietly been diversifying out of mining and into artificial intelligence, a market that will require immense amounts of power to handle the training of AI models and the massive workloads that follow.
The move is no longer a secret.
On Monday, Core Scientific announced a 12-year deal with cloud provider CoreWeave to provide infrastructure for use cases like machine learning. Core Scientific said the agreement, which expands upon an existing partnership between the two companies, will add revenue of more than $3.5 billion over the course of the contract.
CoreWeave, backed by Nvidia, rents out graphics processing units (GPUs), which are needed for training and running AI models. CoreWeave was valued at $19 billion in a funding round last month. Core Scientific will deliver about 200 megawatts of infrastructure to CoreWeave’s operations.
Core Scientific, which emerged from bankruptcy in January, has been mining a mix of digital assets since 2017. The company began to diversify into other services in 2019.
“The best way to think about bitcoin mining facilities is that we are essentially power shells to the data center industry,” Core Scientific CEO Adam Sullivan told CNBC.
Sullivan jumped into the role of CEO while the company was still in the throes of bankruptcy, which resulted from the collapse of bitcoin in 2022. Since then, the former investment banker has settled debts with angry lenders and further beefed up the company’s non-bitcoin business as it reentered the public market.
Though Core is up more than 40% since relisting earlier this year, its market capitalization of around $865 million is significantly lower than its valuation of $4.3 billion in July 2021.
Demand for AI compute and infrastructure surged after OpenAI unveiled ChatGPT in Nov. 2022, setting off a rush of investment in AI models and startups. Meanwhile, Core Scientific and other miners like Bit Digital, Hive, Hut 8, and TeraWulf have been looking to bolster their revenue streams after the so-called bitcoin halving in April cut rewards paid out to bitcoin miners by 50%.
Many have been retrofitting their massive facilities to meet the needs of the market.
“Bitcoin miners, often stationed in energy-secure and energy-intensive data centers, find these facilities ideal for AI operations as well,” said James Butterfill, head of research at digital asset firm CoinShares.
Butterfill said the the overlap is leading to a competition for rack space between bitcoin mining and AI activities. While AI operations require up to 20 times the capital expenditure of bitcoin mining, they’re more profitable, according to a report from CoinShares.
“The introduction of AI activities leads to increased depreciation and amortization, which can enhance gross profit margins,” Butterfill said.
According to CoinShares, Bit Digital derives 27% of its revenue from AI. Hut 8 generates 6% of sales from AI, and Hive, which has data centers in Canada and Sweden, gets 4% of its revenue from these services.
Read more about tech and crypto from CNBC Pro
Hut 8 said in its first-quarter earnings report that it had purchased its first batch of 1,000 Nvidia GPUs and secured a customer agreement with a venture-backed AI cloud platform as part of its expansion into new technologies offering higher returns.
“We finalized commercial agreements for our new AI vertical under a GPU-as-a-service model, including a customer agreement which provides for fixed infrastructure payments plus revenue sharing,” said Hut 8 CEO Asher Genoot.
Genoot added that the company expects to begin generating revenue in the second half of the year at an annual rate of about $20 million.
Bit Digital had 251 servers actively generating revenue from its first AI contract as of the end of April, and the company said it earned about $4.1 million of revenue from the operation that month.
Iris Energy expects to generate between $14 million and $17 million in annual revenue from its AI cloud services. Core Scientific’s expanded arrangement with CoreWeave is expected to produce annual revenue of $290 million.
“While we intend to remain one of the largest and most productive bitcoin miners, we expect to have a diversified business model and more predictable cash flows,” Sullivan said.
Bitcoin’s volatility has made mining a challenging business.
Though bitcoin is currently up more than 150% in the past year to around $69,000, the bear market of 2022 sent many miners into bankruptcy or forced them to shutter altogether.
Pivoting to AI isn’t as simple as repurposing existing infrastructure and machines, because high-performance computing (HPC) data center requirements are different, as are the needs of the data network.
“Besides transformers, substations, and some switch gear nearly all infrastructure miners currently have would need to be bulldozed and built from the ground up to accommodate HPC,” Needham analysts wrote in a report on May 30.
The rigs used to mine bitcoin are called Application-Specific Integrated Circuits (ASICs). They’re built specifically for crypto mining and can’t be used to do other things.
Needham estimates that HPC data centers run at $8 million to $10 million per megawatt in capex, excluding GPUs, whereas bitcoin mining sites typically operate at $300,000 to $800,000 per megawatt in capex, not including ASICs.
Core’s Sullivan says there’s a lot of synergy between the two businesses.
“One of the most exciting parts about the bitcoin mining business is we have access to large amounts of power across the United States with access to fiber lines,” he said.
Beyond its partnership with CoreWeave, Core Scientific has also announced that over the next three to four years, it’s working to convert 500 megawatts of its bitcoin mining infrastructure across the country to HPC data centers.
Sullivan said the retrofit is manageable because the company owns and controls all of its data center infrastructure.
“There are components that we have to purchase to retrofit for HPC, but it is things that we can easily acquire,” he said.
In the next one to two years, Needham analysts estimate that large publicly traded bitcoin miners are expected to more than double power capacity, including both their mining and HPC business expansion plans.
Clean energy is a popular choice because it’s the cheapest power source in many markets. Miners at scale compete in a low-margin industry, where their only variable cost is typically energy, so they’re incentivized to migrate to the world’s cheapest sources of power. An industry report estimates the bitcoin network is 54.5% powered by sustainable electricity.
The Electric Power Research Institute estimates that data centers could take up to 9% of the country’s total electricity consumption by 2030, up from around 4% in 2023. Tapping into nuclear energy is seen by many as the answer to meeting that demand.
TeraWulf powers its mining sites with nuclear energy, and is looking to get into machine learning. So far, the firm has two megawatts dedicated to HPC capacity, though it has plans to transition its energy infrastructure toward AI and HPC.
OpenAI CEO Sam Altman told CNBC last year that he’s a big believer in nuclear when it comes to serving the needs of AI workloads.
“I don’t see a way for us to get there without nuclear,” Altman said. “I mean, maybe we could get there just with solar and storage. But from my vantage point, I feel like this is the most likely and the best way to get there.”
“We ultimately got lucky that our parameters and time range was right. If either of those were wrong, we would have … continued to take guesses/shots in the dark,” Grand says in an email to WIRED. “It would have taken significantly longer to precompute all the possible passwords.”
Grand and Bruno created a video to explain the technical details more thoroughly.
RoboForm, made by US-based Siber Systems, was one of the first password managers on the market, and currently has more than 6 million users worldwide, according to a company report. In 2015, Siber seemed to fix the RoboForm password manager. In a cursory glance, Grand and Bruno couldn’t find any sign that the pseudo-random number generator in the 2015 version used the computer’s time, which makes them think they removed it to fix the flaw, though Grand says they would need to examine it more thoroughly to be certain.
Siber Systems confirmed to WIRED that it did fix the issue with version 7.9.14 of RoboForm, released June 10, 2015, but a spokesperson wouldn’t answer questions about how it did so. In a changelog on the company’s website, it mentions only that Siber programmers made changes to “increase randomness of generated passwords,” but it doesn’t say how they did this. Siber spokesman Simon Davis says that “RoboForm 7 was discontinued in 2017.”
Grand says that, without knowing how Siber fixed the issue, attackers may still be able to regenerate passwords generated by versions of RoboForm released before the fix in 2015. He’s also not sure if current versions contain the problem.
“I’m still not sure I would trust it without knowing how they actually improved the password generation in more recent versions,” he says. “I’m not sure if RoboForm knew how bad this particular weakness was.”
Customers may also still be using passwords that were generated with the early versions of the program before the fix. It doesn’t appear that Siber ever notified customers when it released the fixed version 7.9.14 in 2015 that they should generate new passwords for critical accounts or data. The company didn’t respond to a question about this.
If Siber didn’t inform customers, this would mean that anyone like Michael who used RoboForm to generate passwords prior to 2015—and are still using those passwords—may have vulnerable passwords that hackers can regenerate.
“We know that most people don’t change passwords unless they’re prompted to do so,” Grand says. “Out of 935 passwords in my password manager (not RoboForm), 220 of them are from 2015 and earlier, and most of them are [for] sites I still use.”
Depending on what the company did to fix the issue in 2015, newer passwords may also be vulnerable.
Last November, Grand and Bruno deducted a percentage of bitcoins from Michael’s account for the work they did, then gave him the password to access the rest. The bitcoin was worth $38,000 per coin at the time. Michael waited until it rose to $62,000 per coin and sold some of it. He now has 30 BTC, now worth $3 million, and is waiting for the value to rise to $100,000 per coin.
Michael says he was lucky that he lost the password years ago because, otherwise, he would have sold off the bitcoin when it was worth $40,000 a coin and missed out on a greater fortune.
“That I lost the password was financially a good thing.”
Ledger, a French startup mostly known for its secure crypto hardware wallets, has started shipping new wallets nearly 18 months after announcing the latest Ledger Stax devices.
The updated wallet features an E-Ink display and has been designed in partnership with Tony Fadell, one of the main designers behind the iPod. E-Ink technology is generally used for e-book readers like the Amazon Kindle or the Rakuten Kobo because the displays look good in daylight and don’t require a lot of power.
After fulfilling all pre-orders, the company will list the Ledger Stax on its website once it has more stock available. The reason why the hardware wallet fell behind schedule is the company may have overpromised on the design front. The Ledger Stax features a curved E-Ink display. It said it has been more difficult than expected to produce curved E-Ink displays at scale.
So what makes the Ledger Stax different from Ledger’s other wallets, the Nano S Plus and the Nano X? Unlike those two devices, the Ledger Stax features a larger display with a secure touch screen that interacts directly with the secure element in the device. It’s supposedly easier to use than the arrow buttons on the other Ledger devices.
While the Nano S Plus only works with a USB-C cable, the Nano X and the Stax also have a Bluetooth chip. It means that you can initiate a crypto transaction from your phone and validate it on your crypto wallet — no wire required.
With this new wallet, Ledger is also going for high-end customers. The company sold the Ledger Stax for €279 during the pre-order phase (around $300 at today’s exchange rate). It wouldn’t confirm the final retail price for the wallet so you’ll have to wait for it to be made available again on its website.
Thanks to the curved display, customers can display some information on the spine of the device, even when it’s off. This could be particularly useful for companies and individuals who own multiple hardware wallets and want to stack them up. The Ledger Stax also has built-in magnets for easy alignment and supports Qi wireless charging.
When it comes to security, all of Ledger’s products are based around a secure element where the private keys of your wallet are safely stored. They never leave your crypto wallets, meaning that even if your computer or phone is compromised, your assets are safe. However most crypto hacks are phishing attempts anyway — and Ledger can’t protect you against social engineering and scams.
If you lose your device, you can recover your wallet using a secret recovery phrase. The company also offers a subscription product in case you don’t feel comfortable with recovery phrases.
Interestingly, the Ledger Stax also marks the beginning of a production partnership with Foxconn, the consumer electronics manufacturing company. Previously, Ledger assembled its devices in Vierzon, France — but the Nano S Plus and Nano X devices will still be manufactured in Vierzon.
Ledger said it has sold more than 6 million devices to date and the company estimates it secures around a fifth (20%) of the world’s crypto assets.
The message explained that Incognito was now essentially blackmailing its former users: It had stored their messages and transaction records, it said, and added that it would be creating a “whitelist portal” where users could pay a fee—which for some dealers would later be set as high as $20,000—to remove their data before all the incriminating information was leaked online at the end of this month. “YES THIS IS AN EXTORTION!!!” the message added.
In retrospect, Ormsby says that the site’s apparent user-friendliness and its security features were perhaps a multiyear con laying the groundwork for its endgame, a kind of user extortion never seen before in dark-web drug markets. “Maybe the whole thing was set up to create a false sense of security,” Ormsby says. “The extorting thing is completely new to me. But if you’ve lulled people into a sense of security, I guess it’s easier to extort them.”
In total, Incognito Market promised to leak more than half a million drug transaction records if buyers and sellers didn’t pay to remove them from the data dump. It’s still not clear whether the market’s administrator—Lin, according to prosecutors, whom they accuse of personally carrying out the extortion campaign—planned to follow through on the threat: He appears to have been arrested before the deadline set for the victims of the Incognito blackmail.
An Expert in ‘Anti Anti-Money Laundering’
At the same time the FBI says Lin was laying the groundwork for this double-cross, he also appears to have briefly tried engineering an entirely different scheme. In the summer of 2021, during Incognito Market’s relatively quiet first year, Lin’s alleged alter ego, Pharoah, launched a service called Antinalysis, a website designed to analyze blockchains and let users check—for a fee—whether their cryptocurrency could be connected to criminal transactions.
In a post to the dark-web market forum Dread, Pharoah made clear that Antinalysis was designed not to help anti-money-laundering investigators, but rather those who sought to evade them—presumably including his own dark-web market’s users. “Our goals do not lie in aiding the surveillance autocracy of state-sponsored agencies,” Pharoah’s post read. “This service is dedicated to individuals that have the need to possess complete privacy on the blockchain, offering a perspective from the opponent’s point of view in order for the user to comprehend the possibility of his/her funds getting flagged down under autocratic illegal charges.”
After independent cybersecurity reporter Brian Krebs wrote about the Antinalysis service in August 2021, describing it as an “anti anti-money laundering service for crooks,” Pharoah posted another message complaining that Antinalysis had lost access to its blockchain data source, which Krebs had identified as the anti-money-laundering tool AMLBot, and that it would be going offline. “Stay posted and fuck LE,” Pharoah wrote, using the abbreviation LE to mean “law enforcement.” Antinalysis eventually returned, however, and pivoted last year to acting instead as a service for swapping bitcoin for monero and vice versa.
Meanwhile, Lin appears to have maintained his obsession with cryptocurrency tracing and blockchain analysis: His final LinkedIn post last week before his arrest in New York announced that he had become a certified user of Reactor, the crypto tracing tool sold by blockchain analysis firm Chainalysis. “I’m excited to share that I’ve completed Chainalysis’s new qualification: Chainalysis Reactor Certification (CRC)!” Lin wrote in Mandarin. His last X post shows a Chainalysis diagram of money flows between dark-web markets and cryptocurrency exchanges.
The House of Representatives is teeing up a cryptocurrency bill developed by the House Financial Services and Agriculture Committees that would delineate whether the Securities and Exchange Commission or Commodity Futures Trading Commission would oversee different crypto tokens, as well as barring SEC from issuing rules on crypto custody.
Bloomberg News
WASHINGTON — The House will vote on one of its signature crypto bills on Wednesday, a significant step forward after months of effort from House Financial Services Committee Republicans who have hoped to make a crypto regulatory structure a hallmark of their time leading the committee.
The bill’s text, which has been hashed out between the House Financial Services Committee and the House Agriculture Committee, is largely concerned with delineating authorities between the Securities and Exchange Commission and the Commodity Futures Trading Commission, and establishes a criteria by which the agencies can determine which of them would oversee various digital assets.
Specifically, the bill would barr the SEC from requiring or taking any supervisory action that would cause a bank to record a crypto asset held in custody on the institution’s balance sheet “except that cash held for a third party by such institution that is commingled with the general assets of such institution.” It would also prevent the SEC from requiring that banks hold additional regulatory capital against assets in custody or safekeeping.
Zachary Zweihorn, a partner with law firm Davis Polk, said the bill will likely be supported by the banking industry because it could create much-needed legislative certainty around at least some aspects of the cryptocurrency market and would give them a clear basis for becoming service providers to that industry.
“As a supervisory matter, banking regulators have been hesitant about banks engaging in digital asset activities given the regulatory uncertainties and risks inherent in the market,” Zweihorn said. “Passage of a comprehensive federal regulatory regime for digital asset activities could reduce the risks that supervisors see as presented by the industry, eventually making them more comfortable with the asset class.”
Rep. French Hill, R-Ark., one of the lead sponsors of the legislation, said in an interview that banking regulators sought clarity in the legislation after the SEC didn’t consult them before releasing the accounting bulletin.
“The Staff Accounting Bulletin 121 on custody which was not reviewed with the bank regulators, was not reviewed with Treasury and was not consulted with anybody and actually took custody completely in the wrong direction,” Hill said. “Not consistent with custody rules that have been longstanding.
“The bank regulators have sought clarity here for custody,” he added.
The legislation is getting a last-minute boost from a surprisingly amenable Democratic contingent. While Democratic leaders on the House Financial Services Committee — including Reps. Maxine Waters of California and Stephen Lynch of Massachusetts — are opposing the legislation for applying too light a touch to the crypto industry, Democratic leadership isn’t whipping against the legislation.
That means that party leadership isn’t pressuring Democrats to vote along party lines, and there could be significant numbers that choose to back the Republicans’ bills.
Most Democrats voted against the measure in the Senate, but the vote still previews growing willingness among Democratic lawmakers, especially ahead of elections, to consider crypto bills, even those that are more permissive.
A senior committee staff member involved in the drafting of the bill told reporters that the bill’s authors, who include Reps. Patrick McHenry, R-N.C., the chairman of the House Financial Services Committee, and French Hill, the chairman of the subcommittee on digital assets and financial technology and potential future top Republican on the full panel, hope that the Senate sees Democratic votes in the House votes, and that it prompts them to negotiate on the legislation.
With renewed possibility that a crypto structure bill passes along bipartisan basis, a group of critics, including consumer groups and prominent bank law professors, have released a statement that outlines deeper financial stability concerns with the bill.
Specifically in regards to banks, the coalition, which includes progressive groups like the Americans for Financial Reform, the National Consumer Law Center, National Community Reinvestment Coalition and Public Citizen, said that the bill could allow institutions like banks to bypass regulation.
“Not only could the decentralization framework named above allow crypto firms to largely continue with dangerous business practices as usual; it could also enable traditional financial firms to evade more robust regulatory oversight by claiming their products and platforms meet this decentralization rubric and thus are exempt from conventional regulatory requirements for securities issuers and actors,” the coalition said in their letter to House leadership. “This would create huge potential risks for consumers, investors, and markets due to less rigorous oversight than they would otherwise see with traditional regulatory approaches.”
Washington — A pair of brothers from New York and Boston were taken into federal custody Tuesday, accused by prosecutors of devising a novel criminal scheme to steal about $25 million in cryptocurrency from a commonly used blockchain, according to a newly unsealed indictment.
Anton and James Peraire-Bueno were charged with wire fraud and conspiracy to commit money laundering. Investigators accused them of spending months plotting their theft within the Ethereum blockchain, baiting their victims and establishing shell companies to hide their illicit profits.
According to charging documents, the pair studied math and computer science “at one of the most prestigious universities in the country,” which prosecutors said afforded them a unique set of skills that allowed them to carry out the first-of-its-kind endeavor in a matter of seconds. James Peraire-Bueno is listed as a 2021 graduate of the Massachusetts Institute of Technology, and the MIT Registrar’s Office confirmed that Anton Peraire-Bueno earned a B.S. in computer science and engineering in February 2024, and James Peraire-Bueno earned a B.S. in mathematics, computer science and aerospace engineering in June 2019, as well as a M.S. in aeronautics and astronautics in June 2021.
The brothers allegedly started laying the groundwork in December 2022, engaging in what investigators called a “baiting” operation that targeted three specific victim traders on the digital Ethereum platform. They are specifically accused of exploiting the “validators” on the blockchain, vital components of the integrity and security of transactions.
“In doing so, they fraudulently gained access to pending private transactions and used that access to alter certain transactions and obtain their victims’ cryptocurrency,” prosecutors alleged in court documents.
Investigators said the defendants’ plot took months to plan but just 12 seconds to execute, allegedly raking in approximately $25 million from their unwitting victims.
From April and June of last year, Peraire-Buenos are accused of laundering their money through shell companies. Prosecutors said the duo even rejected repeated requests from a victim, the victim’s attorney and an Ethereum representative to return the cryptocurrency.
They were arrested on Tuesday and are expected to make their initial appearances in New York and Boston federal courts on Wednesday.
“As cryptocurrency markets continue to evolve, the Justice Department will continue to root out fraud, support victims, and restore confidence to these markets,” Deputy Attorney General Lisa Monaco said in a statement.
Attorneys for the brothers could not be immediately identified.
Robert Legare is a CBS News multiplatform reporter and producer covering the Justice Department, federal courts and investigations. He was previously an associate producer for the “CBS Evening News with Norah O’Donnell.”
President Joe Biden on Monday issued an order blocking a Chinese-backed cryptocurrency mining firm from owning land near a Wyoming nuclear missile base, calling its proximity to the base a “national security risk.”
The order forces the divestment of property operated as a crypto mining facility near the Francis E. Warren Air Force Base. MineOne Partners Ltd., a firm partly backed by Chinese nationals, and its affiliates are also required to remove certain equipment on the site.
And with election season in full swing, both Biden and his presumptive Republican challenger, former President Donald Trump, have told voters that they’ll be tough on China, the world’s second-largest economy after the United States and an emerging geopolitical rival.
The Monday divestment order was made in coordination with the U.S. Committee on Foreign Investment in the United States — a little-known but powerful government committee tasked with investigating corporate deals for national security concerns that holds power to force companies to change ownership structures or divest completely from the U.S.
A 2018 law granted CFIUS the authority to review real estate transactions near sensitive sites across the U.S., including F.E. Warren Air Force Base.
MineOne purchased the land that is within one mile of the Air Force base in Cheyenne in 2022, and according to CFIUS, the purchase was not reported to the committee as required until after the panel received a public tip.
The order was vague about the specific national security concerns, with the Treasury Department saying only that there were issues with “specialized and foreign-sourced equipment potentially capable of facilitating surveillance and espionage activities” that “presented a significant national security risk.”
A representative from the firm did not respond to an Associated Press request for comment.
Treasury Secretary Janet Yellen, who serves as the chairperson of CFIUS, said the role of the committee is “to ensure that foreign investment does not undermine our national security, particularly as it relates to transactions that present risk to sensitive U.S. military installations as well as those involving specialized equipment and technologies.”
The committee is made up of members from the State, Justice, Energy and Commerce Departments among others, which investigates national security risks from foreign investments in American firms.
CFIUS directed the sale of the property within 120 days, and that within 90 days the company remove all structures and equipment on the site.
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Some creditors of the bankrupt crypto exchange FTX are preparing to reject a plan that would see them recover 118 percent of the money they lost. The proposal is far less generous than it might seem, they claim.
Starting in January, the FTX creditors began to form a voting block, now made up of 1,600 claimants. The new plan is due to be put to a vote in June; the leaders of the block—Sunil Kavuri and Arush Sehgal—will urge members to vote against its approval. “The recovery percentages are drawn from a fake baseline. It’s a false narrative,” says Sehgal. “It’s an insult to creditors.”
FTX fell to pieces in November 2022 after running dry of funds with which to process customer withdrawals. Billions of dollars’ worth of customer funds was missing. A year later, FTX founder Sam Bankman-Fried was convicted of multiple counts of fraud and conspiracy in connection with the collapse of the exchange. In April, he was sentenced to 25 years in federal prison.
Filed on Tuesday, the FTX bankruptcy plan charts a path to a full recovery, plus interest, for practically all creditors—made possible, according to FTX, by the liquidation of billions of dollars’ worth of investments made by the exchange’s venture capital arm, FTX Ventures, and its sister company, Alameda Research.
Under the proposed plan, government bodies in the United States—including the Internal Revenue Service and the Commodities and Futures Trading Commission—have agreed to suspend high-value claims against FTX until creditors had been repaid (although the IRS will receive a $200 million upfront payment as part of the settlement).
“We are pleased to be in a position to propose a Chapter 11 plan that contemplates the return of 100 percent of bankruptcy claim amounts plus interest for nongovernmental creditors,” said John Ray III, the veteran bankruptcy professional in charge of the estate, in a statement. “I want to thank all the customers and creditors of FTX for their patience throughout this process.”
Although the plan affords creditors a greater recovery than FTX had previously indicated would be possible and assigns their claims priority over others, the creditors leading the voting block object to the plan on a variety of different grounds.
They take issue with the way claims have been valued under the plan. Many customers held crypto assets like bitcoin on the FTX platform, but through a process common to bankruptcy proceedings known as dollarization, their claims have instead been assigned a dollar value based on the price of those assets on the date of the bankruptcy petition. The issue is the subject of a lawsuit filed by the creditors within the bankruptcy proceeding.
When FTX fell, the crypto market nosedived, but has since rebounded. The value of bitcoin, for example, has risen from roughly $16,000 in November 2022 to more than $60,000 per coin. The market recovery is part of the reason FTX is in a position to repay customers in full, but it also means that customer claims could be less than a third as valuable under the plan—even accounting for the 18 percent interest—as they would be if mapped to the present value of crypto assets.
FTX says that nearly all of its customers will receive the money back that they are owed, two years after the cryptocurrency exchange imploded, and some will get more than that.
In an anticipated amended Plan of Reorganization filed in a U.S. bankruptcy court late Tuesday, the exchange estimates that it has between $14.5 billion and $16.3 billion to distribute to customers and other creditors around the world.
The filing said that after paying claims in full, the plan provides for supplemental interest payments to creditors, to the extent that funds still remain. The interest rate for most creditors is 9%.
That may be a diminished consolation for investors who were trading cryptocurrency on the exchange when it collapsed. When FTX sought bankruptcy protection in November 2022, bitcoin was going for $16,080. But crypto prices have soared as the economy recovered while the assets at FTX were sorted out over the past two years. A single bitcoin on Tuesday was selling for close to $62,675. That comes out to a 290% loss, a bit less than that if accrued interest is counted, if those investors had held onto those coins.
Customers and creditors that claim $50,000 or less will get about 118% of their claim, according to the plan, which was filed with the U.S. Bankruptcy Court for the District of Delaware. This covers about 98% of FTX customers.
FTX said that it was able to recover funds by monetizing a collection of assets that mostly consisted of proprietary investments held by the Alameda or FTX Ventures businesses, or litigation claims.
FTX was the third-largest cryptocurrency exchange in the world when it filed for bankruptcy protection in November 2022 after it experienced the crypto equivalent of a bank run.
CEO and founder Sam Bankman-Fried resigned when the exchange collapsed. In March he was sentenced to 25 years in prison for the massive fraud that occurred at FTX.
Bankman-Fried was convicted in November of fraud and conspiracy — a dramatic fall from a crest of success that included a Super Bowl advertisement, testimony before Congress and celebrity endorsements from stars like quarterback Tom Brady, basketball point guard Stephen Curry and comedian Larry David.
The company appointed as its new CEO John Ray III, a long-time bankruptcy litigator who is best known for having to clean up the mess made after the collapse of Enron.
“We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” Ray said in a prepared statement.
FTX, technically, remains a company but its future is unclear. In early 2023, Ray said that he had formed a task force to explore reviving FTX.com, the crypto exchange.
The sordid details of a company run amuck — that emerged after its assets were seized — would hamstring almost any business attempting a comeback, but there may also be different parameters for cryptocurrency exchanges.
The rival crypto exchange Binance briefly explored acquiring FTX before it collapsed in late 2022. Its founder and former CEO Changpeng Zhao, was sentenced last week to four months in prison for looking the other way as criminals used the platform to move money connected to child sex abuse, drug trafficking and terrorism.
Binance is still the largest crypto exchange in the world.
The bankruptcy court is set to hold a hearing on the dispersion of FTX assets on June 25.
FTX, once among the largest cryptocurrency exchanges in the world, said this week that nearly all of its customers will receive the money back that they are owed, two years after its monumental collapse.
FTX said in a court filing late Tuesday that it owes about $11.2 billion to its creditors. The exchange estimates that it has between $14.5 billion and $16.3 billion to distribute to them.
Here is a timeline of what led up to this week’s announcement after an implosion at FTX kicked off what many had expected to become a “crypto winter.”
2022
Nov. 2: Coindesk reports Alameda Reseach, Bankman-Fried’s cryptocurrency trading firm, holds a large amount of FTT, a token issued by FTX, suggesting the finances of the two are intertwined and Alameda faces a cash crunch. The report spooks participants in the crypto market.
Nov. 6: Rival cryptocurrency exchange Binance announces that the firm plans to sell all its holdings in FTT. The price of FTT tanks.
Nov. 8: Binance founder and CEO Changpeng Zhao said his company had signed a letter of intent to buy FTX because the smaller exchange was experiencing a “significant liquidity crunch.” That deal would be contingent, however, on a look at the books at FTX. The price for bitcoin tumbles 13%.
Nov. 9: Cryptocurrency prices plunge and after getting a closer look at the finances of FTX, Binance retreated and said there would be no acquisition. “In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance said in a statement. Bitcoin prices drop another 14%.
Nov. 10: Cryptocurrency lender BlockFi announced it is “not able to do business as usual” and was pausing client withdrawals as a result of FTX’s implosion.
Nov. 11: FTX files for Chapter 11 and Bankman-Fried resigns. John Ray III, a long-time bankruptcy litigator who is best known for having to clean up the mess made after the collapse of Enron, is named the new CEO.
In its bankruptcy filing, FTX listed more than 130 affiliated companies around the globe. The company valued its assets between $10 billion to $50 billion, with a similar estimate for its liabilities. Bitcoin falls 10%.
Nov. 17: Ray gives a damning description of FTX’s operations under Bankman-Fried, from a lack of security controls to business funds being used to buy employees homes and luxuries.
Nov. 30: As part of a media blitz, Bankman-Fried tells New York Time’s Andrew Ross-Sorkin, “Look, I screwed up,” and didn’t knowingly misuse clients’ funds.
Dec. 12: Bankman-Fried is arrested in the Bahamas, where FTX is headquartered.
Dec. 13: The U.S. government charges Bankman-Fried with a host of financial crimes, alleging he intentionally deceived customers and investors to enrich himself and others, while playing a central role in the company’s multibillion-dollar collapse.
Federal prosecutors said Bankman-Fried devised “a scheme and artifice to defraud” FTX’s customers and investors beginning the year it was founded. He illegally diverted their money to cover expenses, debts and risky trades at Alameda Research, and to make lavish real estate purchases and large political donations, prosecutors said in a 13-page indictment.
Dec. 22: Bankman-Fried’s parents agreed to sign a $250 million bond and keep him at their California home while he awaits trial.
2023
August 11: Judge revoked Bankman-Fried’s bail and sent him to jail after concluding he had repeatedly tried to influence witnesses against him.
Oct. 3: Jury selection began for the trial.
Oct. 27: Bankman-Fried took the stand in his trial. He again acknowledged failures but denied defrauding anyone.
Nov. 3: Bankman-Fried is convicted of fraud for stealing at least $10 billion from customers and investors.
2024
March 28: Bankman-Fried is sentenced to 25 years in prison. Bitcoin has roared back from a massive sell-off during the scandal. Prices are up nearly 70%.
April 30: Changpeng Zhao, the founder of Binance, is sentenced to four months in prison for looking the other way as criminals used the platform to move money connected to child sex abuse, drug trafficking and terrorism.
May 8: FTX says that nearly all of its customers will receive the money back that they are owed, two years after the cryptocurrency exchange imploded, and some will get more than that.
FTX says that nearly all of its customers will receive the money back that they are owed, two years after the cryptocurrency exchange imploded, and some will get more than that.
FTX said in a court filing late Tuesday that it owes about $11.2 billion to its creditors. The exchange estimates that it has between $14.5 billion and $16.3 billion to distribute to them.
The filing said that after paying claims in full, the plan provides for supplemental interest payments to creditors, to the extent that funds still remain. The interest rate for most creditors is 9%.
That may be a diminished consolation for investors who were trading cryptocurrency on the exchange when it collapsed. When FTX sought bankruptcy protection in November 2022, bitcoin was going for $16,080. But crypto prices have soared as the economy recovered while the assets at FTX were sorted out over the past two years. A single bitcoin on Tuesday was selling for close to $62,675. That comes out to a 290% loss, a bit less than that if accrued interest is counted, if those investors had held onto those coins.
Customers and creditors that claim $50,000 or less will get about 118% of their claim, according to the plan, which was filed with the U.S. Bankruptcy Court for the District of Delaware. This covers about 98% of FTX customers.
FTX said that it was able to recover funds by monetizing a collection of assets that mostly consisted of proprietary investments held by the Alameda or FTX Ventures businesses, or litigation claims.
FTX was the third-largest cryptocurrency exchange in the world when it filed for bankruptcy protection in November 2022 after it experienced the crypto equivalent of a bank run.
CEO and founder Sam Bankman-Fried resigned when the exchange collapsed. In March he was sentenced to 25 years in prison for the massive fraud that occurred at FTX.
Bankman-Fried was convicted in November of fraud and conspiracy — a dramatic fall from a crest of success that included a Super Bowl advertisement, testimony before Congress and celebrity endorsements from stars like quarterback Tom Brady, basketball point guard Stephen Curry and comedian Larry David.
The company appointed as its new CEO John Ray III, a long-time bankruptcy litigator who is best known for having to clean up the mess made after the collapse of Enron.
“We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” Ray said in a prepared statement.
FTX, technically, remains a company but its future is unclear. In early 2023, Ray said that he had formed a task force to explore reviving FTX.com, the crypto exchange.
The sordid details of a company run amuck that emerged after its assets were seized would hamstring almost any business attempting a comeback, but there may also be different parameters for cryptocurrency exchanges.
The rival crypto exchange Binance briefly explored acquiring FTX before it collapsed in late 2022. Its founder and former CEO Changpeng Zhao, was sentenced last week to four months in prison for looking the other way as criminals used the platform to move money connected to child sex abuse, drug trafficking and terrorism.
Binance is still the largest crypto exchange in the world.
The bankruptcy court is set to hold a hearing on the dispersion of FTX assets on June 25.
The Digital Chamber, a digital asset sector trade association, has slammed the SEC for issuing a Wells notice to Robinhood Crypto.
On May 6, the group issued a statement in which it expressed “profound disappointment and concern” about the latest notice. The association also described it as an example of regulatory overreach.
The Digital Chamber underscored its continued resistance to the SEC, which it claims is expanding its scope without congressional authorization. It said that Congress is “actively deliberating legislation” to clarify regulatory jurisdiction over cryptocurrency and accused the SEC of violating the process.
To resolve jurisdictional issues, the Digital Chamber called for “immediate legislative action” and insisted that SEC Chairman Gary Gensler testify before Congress.
The Digital Chamber backed Robinhood, pointing out the company’s self-proclaimed good-faith compliance efforts and attempts to register with the SEC.
The association stated:
“The Digital Chamber stands ready to support Robinhood Crypto and other affected companies in seeking a resolution that protects their ability to operate and innovate, as well as defending the rights of digital asset users and entrepreneurs nationwide.”
While it did not state its intention to file an amicus brief in support of Robinhood, it did note that it had done so previously, citing its February filing in favor of crypto exchange Kraken.
The Digital Chamber also claimed that the SEC’s actions are inconsistent with the regulator’s investor protection duty, saying that aggressive enforcement affects emerging companies and reduces investors’ capacity to make autonomous financial decisions.
On May 4, Robinhood revealed that its subsidiary, Robinhood Crypto, had received a Wells letter from the SEC. It further elaborated on the development in a post on May 6.
A Wells notice allows companies to counter the SEC’s allegations before the agency proceeds with enforcement actions. However, the notice does not guarantee that formal action will be taken.
The latest legal trouble for Robinhood Crypto comes as it faces greater regulatory attention from US authorities who have aimed their crosshairs on the rapidly evolving crypto market.
Some crypto lawyers have referred to the ongoing issuance of Wells Notices to companies like Robinhood, Uniswap, and Consensys as a “carpet bombing campaign” against the crypto sector. They contend that this approach may overstretch the SEC’s powers and cause substantial operational and legal problems for the affected companies.
Joe Lubin is in a fight with the Securities and Exchange Commission. Not only is the financial regulator waging war against Ethereum, he claims, but making a grab for jurisdiction over the future of the Internet. So Lubin has decided to punch back.
In 2015, Lubin was part of the team that created Ethereum, the computer network home to the world’s second largest cryptocurrency, known as ETH. Later that year, Lubin founded Consensys, with the loose ambition to support the development and adoption of Ethereum and built software products on top of the network. In April, Consensys received an unwelcome missive—known as a Wells Notice—from the SEC, informing the company that it was about to be sued. The regulator’s grievance, Consensys was told, had to do with one of the software products in its stable: MetaMask, a crypto wallet that lets users store crypto coins and interact with Ethereum-based apps.
Consensys claims that the SEC notice, which has not been made public, states that MetaMask has made the company into an unregistered securities broker. Specifically, the SEC takes issue with two MetaMask features: one that allows users to trade between different tokens and another that lets them lock up their tokens in exchange for a regular reward, in a process called staking.
On April 25, Consensys filed a lawsuit of its own against the SEC. The complaint accuses the regulator of an “unlawful seizure of authority over ETH,” which “bears none of the attributes of a security”—the specific type of financial instrument over which the SEC has dominion. The SEC having its way “would spell disaster for the Ethereum network,” the complaint alleges.
In its Wells Notice, the SEC stopped short of calling ETH itself a security, says Consensys, focusing instead on the MetaMask features. But according to Consensys, the agency has long been quietly conducting an investigation into Ethereum, in the view that ETH should be reclassified as such.
That’s not fair, claims Consensys, because an SEC director has previously described ETH as a commodity, not a security, and the Commodity Futures Trading Commission, a separate US financial regulator, has made the same contention. “Consensys built its business against the backdrop of this regulatory consensus,” the lawsuit says.
In bringing the lawsuit, Consensys hopes to drag itself and Ethereum out from underneath the SEC, by clarifying the limits of its jurisdiction, and embolden the rest of the crypto industry to retaliate against what it describes as “aggressive and unlawful SEC overreach.” An SEC spokesperson declined to comment on the specific allegations made by Consensys, saying only that “noncompliance with the securities laws deprives investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosures, segregation of customer assets, safeguards against conflicts of interest, oversight by a self-regulatory organization, and routine inspection by the SEC. It’s investors who get hurt and the American financial markets that may suffer.”
The following Q&A has been edited for brevity and clarity.
Bitcoin (BTC), the largest cryptocurrency in the market, has experienced a notable resurgence in its bullish momentum, with the Bitcoin price reclaiming the crucial $61,000 threshold.
This recovery follows a week-long downtrend that led to a 20% drop to $56,000 on Wednesday. As the bullish momentum returns, the possibility of further testing upper resistance levels and reclaiming previously lost price levels grows stronger.
Bitcoin Bulls Eye $68,000
According to market expert Justin Bennett, a recovery of the $61,000 resistance level would open up potential areas such as $67,000 to $68,000. However, at the present moment, this level continues to pose a significant resistance.
Analyzing the recent correction in the Bitcoin price, analyst Crypto Con suggests that the market correction was necessary for the long-term price trajectory.
The full retest of the 20-week Exponential Moving Average (EMA) support at $56,700 and the return to indicator support zones, such as the Directional Movement Index, indicate a healthy price consolidation.
In addition to the technical indicators, on-chain and market data analytics firm CryptoQuant’s founder and CEO, Ki Young Ju, highlights the current bullish sentiment.
BTC whales buying spree in the past 24 hours. Source: Ki Young Ji on X
According to their data, whales accumulated a significant amount of Bitcoin, totaling 47,000 BTC, within the past 24 hours. This increased accumulation by large investors further bolsters the positive outlook for Bitcoin’s price.
Bitcoin Price Poised For Bullish Surge
Crypto analyst Titan of Crypto has provided further bullish predictions for the Bitcoin price, suggesting that recent corrections have resulted in the grabbing of leverage longs liquidity. In addition, the Stochastic Relative Strength Index (RSI)on the 5-day chart is on the verge of crossing into bullish territory.
This occurrence has historically been followed by an upward price movement in Bitcoin, leading to higher highs. Such a pattern has the potential to fuel renewed investor confidence and attract further buying pressure.
Another positive signal highlighted by Titan of Crypto is the recent buy signal generated by the Supertrend indicator, as seen in the chart below. This technical tool helps identify trends in an asset’s price movement.
The buy signal, which occurred just three months ago, implies that Bitcoin may still have significant room for growth before reaching its cycle top. According to the analyst, historical data suggests that the average duration from the buy signal to the cycle top is approximately 19 months, indicating the potential for a sustained upward trend.
The daily chart shows BTC’s price recovery over the past 24 hours. Source: BTCUSD on TradingView.com
Currently trading at $61,600, Bitcoin has seen a significant increase of 4.7% in the last 24 hours alone. It remains to be seen if BTC will successfully break above resistance levels, while also challenging the ability of previously retested support levels to withstand potential future downtrends.
Featured image from Shutterstock, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Changpeng Zhao, founder of Binance, the world’s largest cryptocurrency exchange, has been sentenced to four months in prison.
Judge Richard Jones, who presided over the sentencing hearing in the Western District of Washington on Tuesday, handed down a lighter sentence than the three years petitioned by the prosecution.
In November, Zhao—better known as CZ—pleaded guilty to willfully violating anti-money-laundering rules that enabled hundreds of millions of dollars in transactions involving US-sanctioned entities, including Iran and Cuba, to pass through the Binance platform. The plea deal required Zhao to step down as Binance chief executive and accept a $150 million fine, and for the company to pay a $4.3 billion penalty.
“Zhao’s willful violation of US law was no accident or oversight,” the US Department of Justice wrote in a court filing ahead of the sentencing. “He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets.”
In the filing, prosecutors requested that Zhao receive a 36-month prison sentence, pointing to the need to “deter others who are tempted to build fortunes and business empires by breaking US law.” Zhao’s legal counsel asked for probation, on the grounds that no defendant in a comparable case “has ever been sentenced to incarceration.”
In coming to an appropriate sentence for Zhao, the judge was required to “look past the guidelines” and factor in context beyond the facts of the underlying crime, says Daniel Richman, a professor of law at Columbia University and former federal prosecutor. That includes the character of the defendant, the likelihood of recidivism, past infractions, and other factors.
In a letter to the judge in advance of the hearing, Zhao apologized for his conduct and accepted responsibility for the failure to establish an effective compliance program at Binance. “Words cannot explain how deeply I regret my choices that result in me being before the Court,” he wrote. “Please accept my assurance that this will be my only encounter with the criminal justice system.”
Zhao’s willingness to “plead guilty and take responsibility” will have counted in his favor, says Richman, but evidence of his flagrant disregard for the law will have weighed heavily on the judge. “When you have somebody who flouted the law in such a sustained way, one could expect that respect for the law will loom large in the sentence the judge imposes,” says Richman.
Zhao is the second crypto figurehead to face criminal sentencing in the US in as many months. On March 28, Sam Bankman-Fried, or SBF, founder of bankrupt crypto exchange FTX, was sentenced to 25 years in prison. Before their respective falls from grace, the pair vied for control of the exchange market and reportedly sparred frequently. But the similarities between the cases end there.
“It’s an easy comparison, but an imperfect one,” says Daniel Silva, an attorney at law firm Buchalter and former US prosecutor. “CZ pleaded guilty to not following the law as required of a financial institution executive. SBF was different: He was improperly using customer funds, gained through fraudulent statements and material omissions of fact.”
In their own presentence filing, Zhao’s counsel made a thinly-veiled reference to the distinction. “Mr. Zhao has been convicted only of an AML [anti-money-laundering] compliance failure,” they wrote. “He has not defrauded any investors, there has been no misappropriation of customer funds.” Their client, they appeared to be saying, is no SBF.
Zhao will not be required to forfeit the wealth he has accrued as founder of Binance as part of his sentence. Although he departed Binance in November, Zhao is reported to retain an estimated 86 percent stake in the exchange and continues to be worth tens of billions of dollars.
The DOJ, which until last year had secured few landmark crypto convictions, will nonetheless celebrate the conviction. “Whether people criticize the sentence as too light, it sends a healthy message,” says Silva. The aim is to “deter the next crypto or financial institution CEO from thumbing their nose at anti-money-laundering regulations.”
Crypto investment products are now going through rough times, as shown by inflow and outflow data. The crypto market is known for its volatile market cycles of ups and downs. Investment products are now struggling, and confidence in the space seems shaken. Crypto funds have now seen outflows for three straight weeks, with investors pulling $435 million from digital asset funds last week, according to CoinShares data. The recent stretch of outflows highlights the souring investor sentiment around some digital assets after a bull run earlier this year.
The Third Consecutive Week Of Crypto Withdrawals
CoinShares’ recent weekly report on digital asset fund flows has revealed the current sentiment among institutional investors. According to the report, investment funds witnessed $435 million in outflows last week to mark the biggest outflow since March. This comes on top of the $206 million and $126 million pulled out in the previous two weeks. Unsurprisingly, the majority of outflows came from Bitcoin funds. Of the total $435 million outflows, $423 million came from Bitcoin funds. Notably, a bulk of Bitcoin’s outflows ($328 million) came from Spot Bitcoin exchange-traded funds (ETFs) in the US.
A look into previous crypto fund flow data since the beginning of the year shows that the majority of the inflows recorded in January, February, and March can be attributed to the Spot Bitcoin ETFs. These ETFs recorded so much inflow of funds that investment products were able to record their best year on record in less than three months.
However, inflows into these ETFs have declined in the past few weeks, and the largest digital asset is now failing to attract inflows amidst interest rate stagnation in the US market. Grayscale’s GBTC, in particular, continued its run of withdrawals, recording $440 million in outflows. At the same time, the other ETFs failed to attract inflows during the week in order to offset these withdrawals. BlackRock’s IBIT, for instance, failed to register inflows for three days straight last week, bringing its 71-day run of inflows to an end.
Ethereum, the altcoin king, also witnessed $38.4 million in outflows last week to offset inflows into other altcoins. Inflow data shows investors pouring $6.9 million worth of inflows into multi-coin investment products. Solana, Litecoin, XRP, Cardano, and Polkadot witnessed $4.1 million, $3.1 million, $0.4 million, $0.4 million, and $0.5 million in inflows, respectively. Short Bitcoin products also witnessed $1.3 million in inflows, showcasing a glimpse into investors’ sentiment.
What’s Next?
Investor sentiment can shift quickly in the fast-moving crypto space and the coming weeks may provide more clarity on the direction of crypto fund flows. Six Spot Bitcoin and Ether exchange-traded funds (ETFs) are set to launch in Hong Kong today April 30. Their entry into the Asian market has been long anticipated and is expected to surpass the first-day inflow record set by their counterparts in the US.
Featured image from StormGain, chart from Tradingview.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
The top cryptocurrencies to keep an eye on this week include Bitcoin (BTC), Ethereum (ETH), and Pepe (PEPE).
Bitcoin whales taking profits
Bitcoin has seen a decrease in whale activity since March 14. However, a surge in whale transactions could potentially boost BTC prices.
Notably, crypto analyst Lookonchain recently highlighted a significant movement of 1,200 Bitcoin, worth an eye-watering $77.67 million, by a whale into the Kraken exchange.
A whale deposited 1,200 $BTC($77.67M) into #Kraken 43 minutes ago.
The whale accumulated 24,755 $BTC($1.68B) at an average price of $68,051 from Mar 1 to Apr 15.
According to the analyst, the same whale had accumulated 24,755 BTC valued at $1.68 billion between March 1 and April 15, with an average purchase price of $68,051 per Bitcoin.
Furthermore, data from CryptoQuant shows that exchange inflows from Bitcoin whales have reached their highest level in five months, indicating a possible profit-taking trend among major holders, which analysts feel could lead to a significant price correction in the coming week.
Large-scale transactions can exert substantial influence on the crypto market, with Bitcoin whales holding greater sway given the coin’s outsized influence on the broader crypto market, where it has more than 50% dominance.
On the market front, Bitcoin’s price recovery attempts have slowed down, with the asset gaining 1% in the last 24 hours to trade at $63,520 after days of being in the red.
Ethereum stays green
Altcoins are also facing downwardpressure, contributing to a $150 billion decline in the total crypto market cap over the weekend.
Ethereum, after trading close to its support trendline within a symmetric triangle pattern, seems to be sparking bullish sentiment in the market.
While the ETH token’s price action has corrected by 32% from its yearly high of $4,094, it maintains a positive year-to-date outlook of more than 75%. Additionally, it was pretty much the only high-cap cryptocurrency to stay in the green over the weekend.
ETH 7-day price chart | Source: CoinGecko
As of now, the coin has continued its good run and is 5.5% higher than it was 24 hours ago. ETH is currently at the highest point it has been in the last 7 days, with analysts on X, including Satoshi Flipper, hinting at an incoming bull run given the coin’s underlying indicators.
Another token that could be worth a closer look in the new week is Pepe. The third-largest meme coin by market cap has had a relatively strong performance since its launch in 2023 and is currently priced at $0.000007459. This is a 7.1% uptick in 24 hours and a nearly 28% increase this week, making it among the top gainers in the last 7 days. However, the current price is still a 4.8% decrease over the previous month.
PEPE 24-hr price chart | Source: CoinGecko
With a $3.1 billion market cap and $648 million 24-hour trading volume, Pepe’s market strength positions it among the top cryptocurrencies to watch. Despite experiencing retracements, the meme coin has shown resilience and could continue its upward trend in the coming weeks, supported by its strong trading volume and market interest.
In summary, Bitcoin, Ethereum, and Pepe are key cryptocurrencies to monitor this week as they navigate through market fluctuations and potential price movements driven by whale activity and market sentiment.
Gavin Wood, the founder of the Polkadot protocol, has unveiled a new Gray Paper outlining the forthcoming Join-Accumulate Machine (JAM) upgrade for the network. This announcement occurred during Wood’s presentation on Polkadot’s future at the Token2049 crypto conference in Dubai.
Wood introduced the JAM Implementer’s Prize, a 10 Million DOT prize pool, to encourage diverse development of the JAM protocol.
Polkadot Unveils JAM Upgrade
According to the announcement, the JAM upgrade aims to replace the relay chain, which acts as the central data chain in the Polkadot network, with a “more modular and minimalist design” that will allow Polkadot to run generic services and increase network stability.
The parachains service within JAM will support existing Substrate-based parachains, enabling developers to continue using Substrate to develop and deploy their blockchains.
Notably, these services will have no predefined limits on code, data, or state capacity and can accommodate additional DOT deposits for increased capacity.
JAM’s design includes several technical improvements. It replaces WebAssembly with the Polkadot Virtual Machine based on the RISC-V ISA, an open-source instruction set architecture (ISA) used to develop custom processors.
It also introduces SAFROLE, a SNARK-based block production algorithm. These upgrades are reportedly designed to optimize performance and scalability within the Polkadot network.
On The Path To Decentralization?
To realize the vision of “a truly decentralized protocol,” Polkadot aims to support multiple client implementations. Furthermore, the JAM Implementer’s prize has been established to incentivize and fund projects contributing to the development of JAM implementations. The announcement further reads on the matter:
We believe that supporting a range of implementations in various programming languages will strengthen the ecosystem’s foundation. It distributes the power of protocol implementers more widely and reduces the risk of a bug in one implementation taking down the entire network.
The JAM Implementer’s Prize will collaborate with existing and future funding initiatives that support Polkadot’s ecosystem and technology stack. These initiatives include Decentralized Futures, Grants, and Polkadot’s on-chain treasury.
The prize will be activated when JAM is ratified as a Polkadot technology through the network’s on-chain governance mechanism.
Overall, Gavin Wood’s introduction of the JAM upgrade and the associated 10 Million DOT prize reflects Polkadot’s intention to increase the protocol’s use and adoption. JAM’s modular design and incentives for multi-client implementations are also expected to contribute to ongoing efforts to decentralize the Polkadot network.
As JAM development continues, the Polkadot ecosystem welcomes proposals from teams interested in implementing it in various programming environments.
Despite the recent announcement, the network’s native token, DOT, has been unable to break the downtrend witnessed over the past month. Currently trading at $6.75, it reflects a significant 24% decline in price over the last 30 days.
Featured image from Shutterstock, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
The cryptocurrency market has undergone a substantial downturn, with many of the top 100 cryptocurrencies experiencing sharp price drops. Bitcoin, the leading digital asset, hit a low of $61,600 on Tuesday.
However, industry experts suggest a potential rebound to higher highs may be on the horizon as the highly anticipated Halving event draws near.
Adrian Zduńczyk, a crypto trader and technical analyst, provides valuable insights into the market dynamics, highlighting key factors such as bull market indicators, ETFs, and the imminent Halving event.
Mixed Signals For BTC
According to Zduńczyk’s analysis, the market exhibits bullish signs, with the 200-week and 50-week moving averages (MAs) at $33,700 and $39,900, respectively.
The Net Unrealized Profit/Loss (NUPL) ratio is 0.55, indicating a favorable trading environment. Additionally, the 7-week correlation with the S&P 500 (SPX) remains firm at 0.71.
In terms of daily trends, Zduńczyk notes that Bitcoin is currently in a choppy range between $59,000 and $74,000, with the 200-day Simple Moving Average (SMA) rising at $46,600 and the 200-day Bitcoin Production Cost (BPRO) rising at $57,700.
However, the analyst notes that the medium-term momentum is declining, and the 50-day Average True Range (ATR) volatility has increased to $3270. This suggests that Bitcoin’s overall price trend is losing strength or momentum in the medium-term timeframe.
Bitcoin Aims For $86,500
Zduńczyk highlights the market sentiment. The Fear & Greed Index is at 65, indicating a state of greed among market participants. The analyst notes that the current phase of the market cycle is characterized by belief.
Moreover, miners are still profitable at prices above $41,800, and as mining difficulty rises post-Halving, a price spikeis expected.
Notably, previous Halving events have triggered substantial price rallies, with Bitcoin experiencing significant gains of 90X, 30X, and 7X. Importantly, Bitcoin has never returned to Halving prices after these rallies.
Examining seasonality trends, the monthly opening price for April stands at $71,000, suggesting a positive outlook for the month. The average gain for April is estimated at 21.95%, implying an end-of-month target of $86,500, according to Zduńczyk.
Moreover, the period from April 16 to 30 has historically seen average gains of 14.69%, further reinforcing positive expectations and further price gains for BTC during the upcoming weeks. According to Zduńczyk, this timeframe could attract investors seeking to buy the dip.
Despite the overall positive outlook, BTC is trading at $62,600, reflecting a consistent decline over the past month. In the last 30 days, BTC has experienced a 9% drop from its mid-March all-time high of $73,700.
Moreover, in its quest for new highs and surpassing the $80,000 threshold, BTC has encountered a significant obstacle at the $70,000 level. Despite surpassing its all-time high, BTC has struggled to consolidate above this level for over a week.
Nonetheless, as emphasized by Zduńczyk, the potential synergy between the success of the ETF market in the United States and the upcoming Halving event may hold the key to revitalizing BTC’s price trajectory.
Featured image from Shutterstock, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
