Cryptocurrency
Sam Bankman-Fried’s life in jail, Tornado Cash’s turmoil, and a $3B BTC whale: Hodler’s Digest, Aug. 20-26
Top Stories This Week
Tornado Cash co-founders charged with money laundering, sanctions violations
United States officials pressed charges against the co-founders of crypto mixer Tornado Cash on Aug. 23. Roman Storm and Roman Semenov were both charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations and conspiracy to operate an unlicensed money-transmitting business. Storm was arrested and released on bail a few days later, while Semenov was added to the U.S. list of Specially Designated Nationals and Blocked Persons. Combined, the charges carry a maximum sentence of 45 years in prison. The third Tornado Cash co-founder, Alexey Pertsev, was arrested in the Netherlands on money laundering charges in August 2022. The law enforcement actions are a continuation of a U.S. government crackdown on Tornado Cash that began last year due to its alleged role in laundering funds of the Lazarus Group, a North Korean-linked hacking collective. Tornado Cash has been implicated in several other hacks as well. All told, the mixer has laundered over $1 billion in ill-gotten gains, the U.S. Department of Justice alleges.
Sam Bankman-Fried is low on meds, living on $3 peanut butter in prison
FTX founder Sam Bankman-Fried appears to be having a tough time behind bars, eating only bread with peanut butter to accommodate his vegan diet while exhausting his supply of prescription medication. In the same hearing where Bankman-Fried pleaded not guilty to seven fraud-related charges, his lawyers pleaded for the former FTX CEO to receive better treatment inside Brooklyn’s notorious Metropolitan Detention Center. Also this week, Bankman-Fried was granted permission to meet with his legal team outside of jail with 48 hours’ notice. Every day, he will have roughly seven hours to prepare for his upcoming trial expected to begin in October.
Mystery solved: Bitcoin wallet accruing $3B in 3 months is identified
The mysterious Bitcoin wallet that surged up the ranks to become the third-largest holder of Bitcoin in the world in just over three months, has been identified. Blockchain intelligence platform Arkham Intelligence labeled the wallet as Robinhood: Jump Trading Custody. According to data from crypto statistics platform BitInfoCharts, the wallet address first received Bitcoin on March 8. Over the course of the next three months and two weeks, the wallet had accrued a staggering 118,000 BTC — worth $3.08 billion at current prices. The current largest Bitcoin wallets in the world, according to BitInfoCharts, are reportedly owned by Binance and Bitfinex — as Bitcoin cold wallets.
Prime Trust parent company lost $8M investing in TerraUSD
The parent company of crypto custodian Prime Trust — currently involved in Chapter 11 bankruptcy proceedings — has reported losing roughly $8 million in client and treasury funds through TerraUSD investments, presumably when the algorithmic stablecoin collapsed in May 2022. The company described the investment as well as a ramping up of spending in October and November 2022 — in the midst of FTX’s collapse — as contributing to its bankruptcy filing. Court documents show Prime Trust owed more than $85 million in fiat and $69.5 million in crypto to its clients. The collapse of the Terra ecosystem triggered a major market crash in 2022, affecting several firms including FTX, BlockFi, Celsius Network and Voyager Digital.
PEPE whale seizes dip opportunity, buys $529K worth of tokens
A Pepe holder bought 640 billion Pepe tokens for 320 Ether valued at $529,000 after the price of the frog-themed memecoin dropped by approximately 15% due to recent changes to a multisig wallet and concerns about potential developer manipulation. According to on-chain analytics platform Lookonchain, the whale purchased PEPE at an average price of $0.000001163. The value of the once-popular memecoin plunged after changes related to the amount of signatures required to sign transactions led to worries about a potential “rug pull,” which was later confirmed by one of the project’s co-founders.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $26,040, Ether (ETH) at $1,653 and XRP at $0.52. The total market cap is at $1.05 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Bone ShibaSwap (BONE) at 18.58%, Sui (SUI) at 12.86% and Toncoin (TON) at 11.97%.
The top three altcoin losers of the week are Pepe (PEPE) at -21.07%, XDC Network (XDC) at -9.62% and ApeCoin (APE) at -8.35%.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
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Most Memorable Quotations
“If history were to repeat itself, the next halving would see bitcoin rising to $35k before the halving and $148k after.”
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Jensen Huang, founder and CEO of NVIDIA
“Some of the people who currently think that there should not be effective law enforcement on-chain would feel differently if they got hacked, defrauded, or lost their private keys.”
Mike Kanovitz, CEO of Jurat
“You could never underestimate the damage the SEC’s lawsuit has caused – not only against Ripple – but #XRP. Three years of adoption – that’s what it’s caused.”
John Deaton, pro-XRP lawyer
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Neal Mohan, CEO of YouTube
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Aydin Kilic, CEO of Hive Digital Technologies
Prediction of the Week
Bitcoin ‘overconfidence reigns’ but bulls must reclaim $27.8K — Trader
Bitcoin needs to reclaim one key moving average to “regain its bullish status,” argues popular pseudonymous analyst CryptoCon, warning that bulls remained too optimistic about the $26,000 BTC price support holding.
For CryptoCon, the 20-week exponential moving average (EMA), now at $27,750, must be won back as support in order for the uptrend to be safe. “I have been covering this moving average a lot recently, but I believe it is critical for Bitcoin to regain its bullish status,” he wrote.
The analysis compared current BTC price action to its rebound from 2018 cycle lows. “It is very important that Bitcoin both rises above and retests the 20 Week EMA as support,” CryptoCon noted with a chart showing the similarities between 2019 and 2023, with the retest and subsequent successful EMA reclaim circled.
FUD of the Week
Chinese official sentenced to life in prison for Bitcoin mining, corruption
A Chinese government official has been sentenced to life in prison for illegitimate business operations related to running a 2.4 billion Chinese yuan ($329 million) Bitcoin mining enterprise and for unrelated charges of corruption. Prosecutors say Xiao Yi — a former member of the Jiangxi Provincial Political Consultative Conference Party Group — “covered up” the mining operation by instructing relevant departments to fabricate statistical reports and adjust the classification of electricity consumption. From 2017 to 2020, his facility’s electricity consumption accounted for 10% of the city of Fuzhou’s total electricity consumption.
FBI flags 6 Bitcoin wallets linked to North Korea, urges vigilance in crypto firms
The United States Federal Bureau of Investigation (FBI) has flagged six Bitcoin wallets linked to North Korean state-backed hacking group Lazarus. The six wallets contain 1,580 BTC worth $40 million believed to be hoarded from various cryptocurrency hacks over the past year. The FBI in its investigation found that Lazarus Group moved approximately 1,580 BTC linked with several crypto exploits. The hacking group has been actively involved in multiple crypto-linked exploits over the years and are believed to have stolen nearly $2 billion in crypto since 2018.
OpenSea manager accused of insider trading sentenced to 3 months in prison, $50K fine
A federal judge has sentenced former OpenSea product manager Nathaniel Chastain to three months in prison for wire fraud and money laundering related to insider trading on the platform. He was accused of using insider information in his position at OpenSea to profit off the trading of NFTs. In his position as product manager, he had the authority to choose which NFTs would be featured on the OpenSea website. He purchased 45 NFTs prior to them being featured and then resold them.
Recursive inscriptions: Bitcoin ‘supercomputer’ and BTC DeFi coming soon
Some believe that Ordinals and recursive inscriptions could supercharge the Bitcoin network as a viable competitor to smart contract platforms. It’s not going to be easy, though.
AI Eye: Get better results being nice to ChatGPT, AI fake child porn debate, Amazon’s AI reviews
Being nice to ChatGPT gets better results, Wired’s weird child porn debate and the end of CATPCHAs.
NFT Collector: Giant Swan’s gothic VR dreamscapes… royalty nightmare on OpenSea
From crying in his car to putting the first 3D object onchain — the story of Giant Swan. Plus royalties race to the bottom accelerates due to OpenSea.
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This week, we take a closer look at Ethereum, Ripple, Cardano, Binance Coin, and Solana.
Ethereum (ETH)
The market has had a great week so far, and Ethereum closed with a 9% price increase. On Wednesday, the Fed cut the interest rate by 0.50%, which turned out to be extremely bullish for crypto. Since then, ETH has also managed to break above $2,400.
With buyers back, the momentum is shifting bullish again. The current target for this cryptocurrency is $2,800, which will also act as resistance. The former resistance at $2,400 is now a key support, and as long as it is not lost, buyers have the advantage.
Looking ahead, Ethereum is finally showing signs of recovery after months of difficult price action in which bears dominated.
Ripple (XRP)
XRP increased by 4% this week but appears to lag behind other market leaders such as Ethereum or Solana. This could be because it already broke its resistance at 54 cents last week, and buyers may be distracted by other opportunities at this time.
Nevertheless, momentum remains bullish on this price action, and XRP needs to make a higher high to maintain it. A clean break above 60 cents can restore confidence and see the price attempt a test of the next key target at 68 cents.
Looking ahead, XRP may be preparing for its next major move, especially if the overall market remains bullish.
Cardano (ADA)
So far in September, ADA has been bouncing between the key levels, but this could be its most important opportunity to break the resistance at 37 cents. While the price closes the week with only a 1% increase, optimism is high that Cardano can finally have a breakout.
The past two weeks saw the price find good support around 33 cents, and sellers were unable to push ADA below that. This improved confidence in the price action, and buyers returned.
Looking ahead, the biggest challenge for this cryptocurrency is to break above 37 cents. That would put ADA back on the offensive to recover the losses incurred since March 2024.
Binance Coin (BNB)
Binance Coin remains a great performer and closed the week with a 6% price increase. This allowed buyers to keep the price well above the $500 support and even aim towards $600, which is the current target for this uptrend.
Buyers are dominating right now, which shows promise for a sustained uptrend in the coming weeks. Moreover, on the 3-day timeframe, the MACD made a bullish cross, which is picking up momentum. This favors a continuation of this uptrend.
Looking ahead, BNB is found in a strong position based on its price action, which shows that it is ready to challenge the highs from earlier this year.
Solana (SOL)
Solana is our strongest performer this week, with a 12% price increase. As soon as the resistance at $134 was broken, buyers rushed to this cryptocurrency, and the price shot up.
The current rally is coming on strong buy volume, which could see SOL test the resistance at $164 in the next few days. That would only encourage buyers further.
Looking ahead, Solana is back in the spotlight, and market participants seem to prefer it over other major altcoins. If this market rally continues, Solana may be among the first to benefit.
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Cryptocurrency charts by TradingView.
Bitcoin’s price rally that started after the US Fed reduced the interest rates on Wednesday took the asset to a multi-week peak of over $64,000 hours ago.
The altcoins also followed suit, with ETH breaking above $2,500 and BNB soaring past $570.
BTC Kept Pumping
This highly anticipated business week actually started with a retracement on Monday that drove the primary cryptocurrency from over $60,000 to under $58,000 in hours. However, the bulls quickly resumed control of the market and pushed the asset to over $61,000 ahead of the Wednesday FOMC meeting.
Once it concluded that the US central bank announced a 0.5% cut in the key interest rates, BTC went on a rollercoaster with several movements up and down. Still, the bulls came out stronger, at least for now, and initiated an impressive rally for bitcoin.
As reported yesterday, the asset tapped $63,000 for the first in three weeks. However, it kept adding value and briefly exceeded $64,000 earlier today for the first time since late August.
Nevertheless, its ascend has been halted for now, and BTC now sits about a grand lower. It’s still 2% up on the day, which has pushed its market cap to $1.250 trillion. Its dominance over the alts, though, has been slashed to 54.3% after soaring past 55% yesterday for the first time in almost four years.
SOL, AVAX on the Run
Most altcoins were trailing behind BTC in the past few days, but have charted more impressive gains today. The pack is led by Solana and Avalanche. Both of them have surged by around 9% to $151 and $28, respectively.
Chainlink has added 5% of value, and so has Ethereum. In fact, ETH has skyrocketed to a multi-week peak of its own at $2,550.
The most impressive daily increases come from the likes of TAO (15%), APT (12%), CORE (12%), JUP (11%), SUI (11%), and LDO (11%).
The total crypto market cap has gained another $70 billion overnight and is above $2.3 trillion on CG now.
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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.
The cryptocurrency market saw some long-time coming revival after the United States Federal Reserve cut the interest rates on Wednesday for the first time in about four years.
The two largest digital assets went on a run, jumping by roughly 10% in the past few days.
BTC Price Rises Amid ETF Inflows
The 11 spot Bitcoin ETFs have enjoyed investors’ demand and attention ever since they went live for trading in January this year. Their negative and positive streaks in terms of net flows have influenced the underlying asset’s price to the extent that BTC tapped a new all-time high just two months after they saw the light of day.
As with most markets, investors’ perspective changes with current macro and micro-economic conditions and news. As such, it was interesting to follow how they would act in this particular week because of the Fed’s FOMC meeting that took place on Wednesday.
After all, this was the first interest rate cut in the States since 2020, which also means that it was the first since the inception of the BTC ETFs. In the days leading to the meeting, US investors poured over $500 million in net inflows to the financial vehicles but withdrew $52.7 million on Wednesday.
However, their attitude changed once again yesterday – the first full trading day after the rate reduction. Data from FarSide shows total net inflows of $158.3 million. Ark Invest’s ARKB led the pack with $81.1 million, followed by Fidelity’s FBTC with nearly $50 million. There were no reportable outflows, but BlackRock’s IBIT saw no action.
In the same timeframe, BTC’s price skyrocketed from $59,000 (on the rate-cut day) to just over $64,000 earlier today before retracing slightly to $63,400 (as of now).
Even ETH ETFs See Inflows
Unlike the Bitcoin ETFs, the Ethereum counterparts have failed to attract real interest, recording very few days in net inflows since their start in late July. In the days ahead of the FOMC meeting, investors took out $9.4 million on Monday and $15.1 million on Tuesday. Another $9.8 million was withdrawn on Wednesday.
However, the tides turned for the Ethereum ETFs as well yesterday, with total net inflows of $5.2 million. Interestingly, the entire amount went into BlackRock’s ETHA, and the rest of the ETFs saw zero reportable flows.
ETH’s price also soared alongside BTC. It had dumped to $2,300 during the FOMC meeting on Wednesday but earlier today neared $2,575 (a 12% surge) for the first time since late August.
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