Cryptocurrency
Ensuring integrity of blockchain transactions: Trust through audits
Blockchain auditing is the process of examining and verifying the data and transactions stored within a blockchain network. It focuses on assessing the integrity and accuracy of the information recorded on the blockchain to ensure it aligns with the intended rules, protocols and regulations.
Through the audit process, smart contract code is painstakingly examined to identify vulnerabilities of all levels, ranging from minor loopholes to critical weaknesses that could potentially expose millions to risk.
Auditors review and reveal centralization issues, ensure the project code functions as the developer intended, and optimize the code’s efficiency. They address key areas such as mathematical operations, logical issues, control flow, access control and compiler errors. By doing this, the probability of a smart contract vulnerability is substantially reduced, providing an essential safeguard in the world of Web3.
Sheldon Xia, founder and CEO of crypto exchange Bitmart, told Cointelegraph, “Auditing significantly reduces risks associated with smart contract vulnerabilities.”
However, auditing is not a panacea. Many projects often do not have their entire code audited due to time and budget constraints, leaving sections of the code unchecked and potentially susceptible to issues.
Furthermore, audits must be continuous, as code is frequently updated or forked, making single audits insufficient for long-term security.
In addition, there’s the challenge of ensuring that the deployed code is the one that was actually audited and not something different. This emphasizes the need for both transparency and traceability in the deployment process, underlining the necessity of a more holistic approach to security that goes beyond mere code auditing.
Auditing blockchain systems is crucial for several reasons.
Firstly, auditing ensures the verification of transactions recorded on the blockchain. This involves scrutinizing the transaction history, validating inputs and outputs, and confirming that the transactions comply with predefined rules and smart contracts. By doing so, auditing helps prevent fraudulent or erroneous transactions and maintains the integrity of the blockchain network.
Secondly, blockchain auditing plays a vital role in security and fraud detection. Auditors thoroughly review the transactions, and access controls and cryptographic mechanisms to identify unauthorized or suspicious activities within the blockchain network. This aspect is particularly critical in financial systems, supply chains and sensitive data management with high potential risks.
Auditing enhances accountability by holding participants responsible for their actions within the blockchain network. It helps identify discrepancies or inconsistencies, ensuring all stakeholders are accountable for their activities.
Furthermore, auditing instills trust and confidence among stakeholders in blockchain-based systems. By optimizing the blockchain network based on audit findings, organizations can ensure it can handle increasing transaction volumes and meet desired performance objectives.
The importance of reliable auditing processes
While auditors play an essential role in the security of blockchain networks, founders must select reputable organizations. One drawback associated with shady auditing firms is a conflict of interest. These entities may have undisclosed conflicts that compromise their independence and objectivity.
They could be financially tied to the projects they audit or maintain undisclosed partnerships or investments that introduce bias into their evaluations. Such conflicts undermine the integrity of the audit process and raise doubts about the impartiality of their findings.
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Transparency is crucial in auditing to ensure accountability and build trust. However, shady auditing firms often lack transparency in their operations. They provide limited or vague information about their methodologies, processes and auditors’ qualifications.
In March 2023, Cointelegraph reported that banks associated with the defunct crypto exchange FTX may have relied on the misleading and faulty financial information provided by proof-of-reserve examinations by auditors associated with the Public Company Accounting Oversight Board.
In another report by Cointelegraph in December 2022, the SEC’s acting chief accountant Paul Munter stressed that investors shouldn’t place too much confidence in a company’s proof-of-reserve audits. Munter said these proof-of-reserve reports lack sufficient information for stakeholders to determine whether the company has enough assets to meet its liabilities. This lack of transparency makes it challenging to evaluate the reliability and credibility of their findings, raising concerns about the validity of their audits.
Although a third party should conduct audits, the lack of true independence among many auditors means that the results are sometimes unreliable. In other words, they may have an incentive to avoid disappointing customers.
Inadequate due diligence is another drawback associated with shady auditing firms. Effective audits require thorough analysis, including a comprehensive review of project documentation, source code, financial records and security measures.
Some firms may perform inadequate due diligence or rely on incomplete or inaccurate information from their audit projects. Consequently, their reports can be misleading or inaccurate, failing to identify significant risks or vulnerabilities.
An incomplete or misleading audit can have severe consequences for the reputation and trustworthiness of a blockchain project. If investors, users or regulators discover an audit report is unreliable or conducted by an untrustworthy firm, it erodes confidence in the project.
This diminished trust can result in decreased adoption, loss of investments and potential legal repercussions.
Best practices for effective auditing in blockchain systems
In exploring best practices for conducting audits in blockchain environments, auditors must deeply understand how blockchain systems work. This includes knowledge of the underlying architecture, consensus mechanisms and transaction validation processes.
Such expertise enables auditors to identify potential vulnerabilities and evaluate the overall security and integrity of the system. Comprehensive documentation is essential to the auditing process, ensuring that all relevant information about the blockchain system is thoroughly recorded.
Technical specifications, smart contracts, cryptographic algorithms and other critical components must be documented to gain insights into the system’s functionality and identify potential risks and vulnerabilities.
Moreover, auditors should thoroughly review the codebase of the blockchain system and conduct a detailed analysis of smart contracts. This process entails assessing the code for vulnerabilities, logic flaws and potential attack vectors exploited by malicious actors.
Specialized tools and techniques may be employed to ensure the accuracy and security of the system during the code review and smart contract analysis.
End-to-end security is key
The reality is that auditing alone is not enough. A more holistic, comprehensive approach is required. While auditing addresses code-based risks, Know Your Customer procedures tackle the human risk factor, thereby providing a more comprehensive security overview. However, striking the right balance between the anonymity offered by Web3 and the trust fostered through KYC can be a delicate process.
Of course, KYC is not foolproof either, with cases of bad actors misrepresenting themselves and passing KYC checks, creating a false sense of trust around a project. This means that rigorous screening processes conducted by seasoned professionals are needed. KYC verification is only as meaningful as the process behind it is comprehensive.
Alpen Sheth, partner at Borderless Capital, a crypto venture capital firm, told Cointelegraph, “It’s important to remember that auditing should be an ongoing process to keep up with code changes and the evolution of the ecosystem. We acknowledge that security is an integral part of sustainable growth and development in the blockchain space.”
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In this complex landscape, investors should also exercise due diligence. Alongside reading and understanding audit reports, they should also look for projects audited by reputable firms, track project code updates and their corresponding audits, know the team behind the project and their track record, and consider the proportion of audited code within the project.
As the Web3 ecosystem continues to grow, a multifaceted approach combining comprehensive auditing, robust KYC processes, and investor due diligence is necessary to ensure optimal security. This, alongside a concerted effort to address the challenges of centralization risks, can provide a more secure foundation for the continued growth and success of Web3 projects.
Bitcoin’s stagnation continues as the asset has made little to no attempt to move away from the $108,000 level.
While most larger-cap alts have produced insignificant gains, TON and BONK have emerged as the biggest gainers on a relatively calm Sunday morning.
BTC Calm at $108K
It has been a quiet period for the primary cryptocurrency. In fact, the latest major price moves came about two weeks ago – on June 23 and 24 – when it dumped to $98,000 before it soared past $105,000 a day later as the Middle East war was going rampantly.
Ever since then, though, the asset has been stuck in a tight trading range between $105,000 and $110,000. It tested the lower boundary on Wednesday, where the bulls stepped up and pushed it south toward the upper one.
On Thursday, BTC showed signs of a breakout attempt when it spiked to a multi-week peak of $110,500, but the bears stepped up at this point and didn’t allow a surge to a new all-time high.
The landscape has been somewhat unchanged since then, as bitcoin quickly returned to $108,000 and has not moved from that level for a few days. Its market capitalization stands strong at $2.150 trillion, while its dominance over the alts is at over 63% on CG.
BONK on the Run
As the graph below will demonstrate, most larger-cap alts are slightly in the green on a daily scale. Such minor increases are evident from the likes of ETH, BNB, SOL, TRX, DOGE, ADA, BCH, LINK, and XRP. In contrast, HYPE and PI have lost some traction over the past 24 hours.
The biggest gainers are TON and BONK. The former has risen by over 9% and sits at $3, while the meme coin has exploded by 20% and now trades at $0.000022.
The cumulative market cap of all crypto assets has remained relatively stable at $3.4 trillion on CG.
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Cryptocurrency charts by TradingView.
TL;DR
- Ripple’s cross-border token had a stellar Q4 24 and early Q1 25 but stalled in the following months, and its consolidation phase has not ended yet.
- However, analysts are adamant that the asset can unlock major gains, as long as it reclaims a key resistance level.
The key resistance level for $XRP is $2.38. Breaking above it could trigger a major move! pic.twitter.com/mwpqKBxJKV
— Ali (@ali_charts) July 4, 2025
Basing his analysis on XRP’s UTXO, Ali Martinez determined that this pivotal level is situated at $2.38, where the fourth-largest cryptocurrency faced several rejections in the past few months. However, a conclusive breakout above it could send the token flying, he added.
Shortly after, the analyst with almost 140,000 followers on X indicated that XRP can surge to $2.6 as long as it reclaims $2.33.
BitGuru also outlined the significance of the same two major resistance lines, saying the asset was rejected at the lower one after it confirmed an “inverse head and shoulders and triple bottom pattern.”
With XRP now testing the $2.23 support, the doors open for a surge back to $2.33 as long as it can remain above it, BitGuru added.
Elite Crypto’s analysis is similar to that of Martinez, as they noted that XRP is “showing a strong bullish setup.” They added that “the price is consistently respecting the horizontal support and now approaching the downtrend resistance.”
The analyst predicted that a breakout from this obstacle could result in a massive price surge for Ripple’s token, perhaps to and above the $3.4 all-time high.
$XRP is showing a strong bullish setup as the price is consistently respecting the horizontal support and now approaching the downtrend resistance. A breakout from this zone could lead to a sharp upward move toward the $3.50 range which has acted as a previous resistance level.… pic.twitter.com/TRXv9tYe3n
— Elite Crypto (@TheEliteCrypto) July 5, 2025
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June was a lackluster month for crypto market gains amid global uncertainty looming over international tariff policy and the future direction of US central bank rates.
US Stocks Outpaced Ethereum In June
For the 30 day window ending Friday, Jun. 27, the S&P 500 Index gained +4.25%.
The push overcame serious resistance from the tariff nail biters and took the broad US stock benchmark to a historic record close Friday.
But after running from $76,200 on 4/8 to $111,600 on 5/22, a +46% gain in a little over a month, Bitcoin’s price took some time to cool down in June. The cryptocurrency charted minor gains, which could be seen as a positive in the face of massive international turmoils and geopolitical shocks.
Meanwhile, Ethereum corrected by 24% before bouncing off the Jun. 22 support to finalize a 2% loss for the 30 days ending Friday, Jun. 30th. So does ETH have a problem that Bitcoin doesn’t?
Not really.
Ethereum is a smaller currency by market cap, about 14% of Bitcoin’s size. Traders still perceive it as a more speculative bet. So it tends to move in the same direction as BTC — by larger percentages.
That means on the way down, losses are frequently greater. But on the way up, gains are often greater too.
For example, during the crypto market’s rally from early April through early June, Bitcoin made a +46% gain. But during the same rally, Ethereum gained +100%, rising from the $1,400 handle to the $2,800 level.
Bitcoin and Ethereum Rainbow Charts
Double rainbow all the way across the sky?
Bitcoin is by and large the biggest leading indicator for the rest of the crypto market’s prices, including Ethereum. It appears to have a long ways to go before topping out this year or next.
Based on popular and authoritative analysts’ price targets for Bitcoin in 2025, it’s pacing to enter July and Q3 at 50% to 66% of its peak price before this cycle is over.
That means it could double or gain by half again its June price levels before the year is over.
Standard Chartered, Bernstein, Galaxy Digital, and Peter Brandt all expect $150,000 to $200,000 for BTC sometime in the next six months.
Bitcoin’s long-term price trend rainbow chart confirms these projections.
Meanwhile, Ethereum’s own long-term trend chart is shaping up to signal a three-peat of a multi-year trend.
If it happens the way it did the last two major market cycles, this Ether prices could be primed to rise by more than Bitcoin’s during the next big monthly rally.
If it turns out to be Bitcoin’s final push for its peak on this cycle as market watchers expect, Ethereum’s gains could signal the start of this cycle’s alt season in meme coins and Layer 2 app tokens.
In addition to the market technical setup for ETH prices in Q3, here are four further bullish signals supporting the leading smart contract platform’s price gains in July.
1. Who Will Win Ethereum L2 Fee Wars?
Ethereum’s price has taken time to absorb the shock of the Dencun upgrade on Mar. 13, 2024.
The upgrade lowers rates for Layer 2 apps to lock in tranches of transaction updates with the base layer chain.
In the 15 months since, developers have deployed a number of new apps with currencies that offer Ethereum services for lower fees.
The base chain’s fee revenue dropped from $30 million annually to $500,000 by Q1 of this year.
That saves users money, but a lot of Ethereum stakers who had their money parked in staking contracts to earn that fee revenue felt inclined to move it somewhere that it could still earn returns on their savings.
This is a massive factor in Ethereum’s sluggish price growth compared to Bitcoin’s over the past year. But it’s not that the latter is falling behind its competitors like Solana and Ripple.
When factoring in the growth of the post-Dencun L2 coins on Ethereum— like Mantle (MNT), POL (POL), Arbitrum (ARB), Optimism (OP), Movement (MOVE), and Starknet (STRK)— the money mostly didn’t leave Ethereum and go to its competitors. It went to another layer, powered by and supporting the base chain.
For that reason, Ethereum may be undervalued by a large number of the cryptocurrency market’s headline readers that don’t understand what happened.
Ethereum Identity Crisis?
Some have referred in the mean time to this awkward stage in Ethereum’s growth as an identity crisis. It’s an open platform and anyone can build on it in any way that the code can handle.
The question for Vitalik Buterin and crypto market investors who show up to value early is:
Will one of the slew of Ethereum scale and fee apps, some new app we haven’t heard of yet, or an upgrade be what implements the best ultra long term, future proof, platform-wide standardizations that define the network’s global advantages?
Find the answer to that question and you’re doing some real work.
2. SharpLink $30M ETH Buy
In another positive development, the corporate treasury race that started for Bitcoin supplies continues to rock the Ethereum markets.
SharpLink Gaming, bought another $30 million worth of ETH just before the Ether price chart threw a small cup and handle pattern. But why does this matter? Well, let’s see what happened to STrategy.
Led by founder and executive chairman Michael Saylor, Tyson’s Corner, Virginia-based Strategy Inc. and Bitcoin have both benefited from the company’s pivot in 2020 to simply pile up as much BTC as it can hold on to forever.
As a result of the cryptocurrency’s increasing popularity with investors since then, MSTR stock rallied 566% in under 11 months from $63 per share on Jan. 5, 2024 to a price peak of $420 on Nov. 22, 2024.
Over that same time, the S&P 500 Index rallied 27% from the 4697 level to 5969.
Every $100 spent on Strategy stock on Jan. 5 last year could be sold for $666 dollars on Nov. 22, paying back buyers $566 for saving their $100 with MSTR shares for a term of 11 months.
That’s like a downpayment on a new car lease with a high credit score.
Meanwhile, $100 spent on an S&P 500 ETF would have returned buyers $27. That’s more like a cheap dinner out for two. All for the same hundred bucks and the same 11 months.
That suggests regulated Wall Street investors wanted on to the Bitcoin bandwagon and found a way in Strategy stocks. Seeing the bullishness of corporate finance, Internet crypto markets were now racing Strategy to accumulate a scarce supply of BTC tokens.
Now, SharpLink is doing it again with ETH. The company’s stocks spiked over 8 days in late May from $3.76 per share to just under $80 a share as Wall Street rewarded the former gaming company for pivoting to accumulating a regulated corporate Ether treasury.
3. $39M ETH Whale Bite
Meanwhile, an Ethereum whale took a $39 million chomp out of the crypto dip on 6/22.
Ethereum’s forward outlook was too good for this whale not to bite at that 24% off discount tag.
Every token is a vote with a daily trading value that fluctuates on a global open market of crypto exchanges. Participants “vote” by locking, unlocking, moving, and swapping currencies, as often as they like, any time they like.
When crypto investors take Ether tokens off a crypto exchange, the remaining supply of ETH tends to attract higher prices at the point of sale. But when they stake ETH for yield, it creates even more support.
4. Bit Digital Drops $34M BTC for ETH
Not to be outdone by SharpLink, publicly traded, New York-based blockchain company Bit Digital, announced on 6/25 it is giving up $34 million worth of BTC tokens to move the proceeds into Ether and develop staking strategies.
They might profit well from determining in advance of the overall market which of the Ethereum scale and fee coins will deliver the most yield and gains together over timespans relevant to their balance sheet and calendar.
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