BTC Price Breaks Its Longest Losing Streak in History: Five Things to Know about Bitcoin this Week

Audy Castañeda
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BTC Price Breaks Its Longest Losing Streak in History: Five Things to Know about Bitcoin this Week

The longest weekly losing streak in Bitcoin history has finally been broken, but the mood among analysts is still not bullish.

Bitcoin (BTC) starts a new week with some hope for traders after stopping what has been the longest weekly downtrend in its history.

After struggling for support over the weekend, the BTC/USD pair finally found its footing to close the week at $29,900, up $450 from last Sunday.

The bullish momentum didn’t stop there: the pair rallied overnight through June 6 to hit multi-day highs.

The price action provides some long-awaited relief for bulls, but Bitcoin is far from out of the woods at the start of what promises to be an interesting trading week.

This article examines five factors to keep in mind when plotting BTC price action in the coming days.

A New Bullish Weekly Close for BTC

It took a long time, but the price of Bitcoin has finally closed a “green” week on the weekly chart.

The BTC/USD pair had spent a record nine weeks making progressively lower weekly closes, a trend that started in late March and ended up being the longest in its history.

On June 5, the pair reached $29,900 before the new week started, this being still about $450 higher than the previous week’s closing price.

While some celebrated Bitcoin’s newfound strength, others remained firmly cool on the prospects for a more substantial rally.

Michaël van de Poppe, a contributor to Cointelegraph, noted the gap in CME futures since the weekend, which is an incentive to return to $29,000.

For Il Capo of Crypto, a Twitter analytics account well known for its sobering views on BTC’s upcoming price action, there wasn’t much to be trusted either.

Consumer Price Index Data for May to be published June 10

The question for many is how much the CPI data can rise, as the aftermath of the Russia-Ukraine conflict and its impact on world trade and supply chains continue to unfold.

In the United States, interest rate hikes by the Federal Reserve are also under scrutiny as a result of rising prices.

The end of the “easy money” era is a tough one for stocks and correlated crypto assets in general, and that pain trend is not expected to end anytime soon, regardless of how inflation plays out.

Miner Capitulation “Very Close”

Despite weeks of lower prices jeopardizing their cost base, Bitcoin miners have so far refrained from significantly distributing their coins, but this could change soon.

In a June 6 tweet, Charles Edwards, founder of crypto asset manager Capriole, highlighted a classic bottoming signal in the Bitcoin hash tape metric.

Hash tapes measure the profitability of miners and have historically been accurate in their correlation to price phases. Currently, the March 2020-like “capitulation” phase is underway, he explained, but hodlers should do anything but sell as a result.

Fundamentals Echo Miner Calm

So far, the hash rate has remained stable above 200 exahashes per second (EH/s), according to estimates, indicating that miners are, for the most part, still active and have not slowed down for cost reasons.

In its next automated reset this week, the difficulty will drop by less than 1%, once again reflecting a relative lack of turmoil in the mining sphere.

Megawhales Show “Promising Sign”

In terms of aligning their words with their actions, the biggest Bitcoin investors could be leading this month.

As sentiment-monitoring firm Santiment noted, entities that control 1,000 BTC or more now hold more of the BTC supply than at any point in the past year.

“Bitcoin mega-whale addresses, partially made up of exchange addresses, hold their largest supply of BTC in a year,” Santiment summarized on June 6.

By Audy Castaneda

Daniel Frumkin Thinks that Factors other Than Hash Rate Are More Important to the Security of Bitcoin

Alexander Salazar
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Daniel Frumkin Thinks that Factors other Than Hash Rate Are More Important to the Security of Bitcoin

Frumkin considers that the current computing power is more than needed to secure the network. The Bitcoin hash rate is around 210 EH/s, thanks to the upward trend shown since the beginning of the year.

Since early 2022, the Bitcoin (BTC) hash rate has grown considerably, until reaching its goal and even having large surpluses. That is positive for the network but does not determine its security since other factors are more important. It is necessary to take the quality of computing power into account to guarantee that crucial element.

Daniel Frumkin, the chief content officer of Braiins, recently stated the hash rate of 210 EH/s is more than needed to secure the protocol. He explained that the number of online exahashes is not the only factor determining the security of Bitcoin.

The specialist believes that the geographical and jurisdictional distribution of the hash rate is among those factors. He said it is relevant to know whether the hash rate concentrates in a few countries or is in dozens of countries.

Frumkin considers that a decentralized network with more participants is an excellent condition for security. He stated that 100 EH/s from 10,000 miners is better than 100 EH/s from only 1,000 miners.

His comments come when the Bitcoin hash rate is over 210 EH/s, according to figures from Braiins. That is possible thanks to the upward trend that it has shown since earlier in the year.

In May, the Bitcoin hash rate reached new all-time highs of 231 EH/s. At that time, the price of the pioneering cryptocurrency was beginning to go on a bearish streak. That took mining profitability to lows not seen since 2020, thus showing a negative correlation between price and hash rate.

In addition to the hash rate, the mining difficulty also reflects the participation, coincidentally rising to 31.25 trillion (T). That indicates that many miners have been collaborating with the protocol since then.

The Number of Participants Is More Important than the Hash Rate

In addition to the hash rate, Frumkin thinks it is relevant to know the ability of bad actors to manufacture enough ASIC miners. That situation would cause a 51% attack capable of causing severe damage to the Bitcoin protocol.

However, he clarifies that this would be unfeasible, as it is too difficult to achieve the mass production of ASIC chips. In addition, he explained that it would be hard to find enough available energy and build the necessary mining infrastructure.

For that reason, he defends the distribution of the hash rate worldwide, currently seen on the mining map of the University of Cambridge. That segregation would prevent bad actors from taking over the existing computing power and carrying out an attack against the network.

Frumkin said the attack would be less complicated if five companies controlled 50% of the hash rate within the same country or jurisdiction. On the contrary, it would be more difficult if there were 50 companies in multiple jurisdictions.

The specialist concludes that it is more important to have more participants in the mining industry than to have more hash rate.

By Alexander Salazar

The Japanese Parliament Approves a Bill on Stablecoins to Protect Investors

Alexander Salazar
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The Japanese Parliament Approves a Bill on Stablecoins to Protect Investors

Japan recently approved a bill that defines stablecoins as digital money as long as they have a peg with a legal tender. The new law establishes that only authorized banks, registered money transfer agents, and trust companies can issue those cryptocurrencies.

Japan is among the leading economies to introduce a legal framework for regulating stablecoins. Those cryptocurrencies have jumped onto the global stage after the TerraUSD token collapsed last month.

The Japanese Parliament recently approved a bill that clarifies the legal status of stablecoins, defining them as digital money. They must have a peg with the yen or another legal tender and grant their holders the right to redeem them at face value.

The new law also introduces a registration system for financial institutions to issue stablecoins and implements anti-money laundering measures.

The bill aims to protect investors and the financial system from risks associated with the rapid adoption of stablecoins. The market of those cryptocurrencies has skyrocketed to 20 trillion yen, equivalent to over USD 150,000 million.

The new legal framework should enter into force in 2023. Besides, Japan Financial Services Agency plans to issue regulations concerning stablecoin issuers in the coming months.

The bill on stablecoins comes amid a massive decline in cryptocurrency markets. The Terra USD (UST) algorithmic stablecoin lost its peg with the US dollar in early May, which fueled that drop.

According to Bloomberg, stablecoins have a capitalization of around EUR 149.63 billion, equivalent to USD 161 billion. They highlight that the leading stablecoins are Tether (USDT), USD Coin (USDC), and Binance USD (BUSD).

Only Authorized Banks Can Issue Stablecoins

The bill states that only authorized banks, registered money transfer agents, and trust companies can issue stablecoins. The FSA (Financial Services Agency) reports the introduction of the regulations concerning stablecoin issuers will occur in the coming months.

Mitsubishi UFJ Trust and Banking Corp. has disclosed its plans to issue its stablecoin Progmat Coin. The Tokyo-based bank said that yen reserves in a trust account would back it fully.

That quick action by Japan could help restore confidence in cryptocurrencies after the UST collapsed.

The crash of Terra also affected global cryptocurrency markets and heightened regulatory concerns. In that regard, US Treasury Secretary Janet Yellen pointed to the stablecoin UST as a rapidly rising risk.

Later, she clarified that cryptocurrencies generally do not pose any systemic risk to the financial system.

Japan Bets on the Use of Cryptocurrencies

In May, the Bank of Japan (BoJ) announced that it had completed the first phase of its Digital Yen. Furthermore, the bank has moved into the second stage of experiments to examine more precise functions. The latter includes setting limits on the amount of central bank digital currency (CBDC) that each entity can hold.

The Bank of Japan plans to complete the second phase of its CBDC in March next year. The financial institution has thought about doing a pilot test on consumers and businesses in the future.

Sumitomo Mitsui Trust Holdings (SuMi) recently announced that it would create a trusted company with the Japanese cryptocurrency Bitbank. SuMi wants it to manage the digital assets of its customers.

They will call the firm Japan Digital Asset Trust Preparatory Company (JADAT). They plan to offer their clients custody services for digital currencies and non-fungible tokens (NFTs).

By Alexander Salazar

Man Files a Complaint against Claro after Losing his Bitcoins on Binance

Jenson Nunez
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Claro will have to assure the court that it did not make the bitcoin fraud easier. The affected party highlighted that Claro must give him money for the moral damages caused to him.

A few months ago, a resident of Brazil lost more than $34,000 worth of bitcoin (BTC) from his Binance account and filed a lawsuit against the Claro telephone company, alleging that his chip got duplicated.

The case started its development in December of last year when the Claro mobile line of the affected cell phone suddenly stopped working. When this situation took place, the man filed a complaint to customer service. And after a few days, they made portability giving him a new phone number in a physical store of the entity.

But when the case appeared to get resolved, the victim detected an unexpected event. The bitcoins he housed in his Binance account suddenly disappeared. He noticed that an individual with a mobile device based in Sao Paulo had cloned his chip and extracted all his money from the network, a figure registered at more than $34,000 worth of BTC.

The victim expressed that his chip got cloned, enabled on another cellphone, and used to extract all his cryptocurrencies. This situation indicates that the attacker could access his Binance account through the SMS password recovery that the network allows.

This type of attack gets called SIM swapping or chip duplication. It consists of someone duplicating a cell phone SIM card to receive the code that the network grants by SMS to confirm every single activity the user is about to do on the platform. This way, the scammer got into the victim’s account and withdrew all his money.

Claro has to Prove Innocence to the Court

The user sent Claro directly to the Court of Justice of the Federal District in Brazil. It alleges that a failure in providing the service caused severe damage to the bitcoin investor. He requested that the company give him at least USD 10,000 for moral damages.

Claro denied getting involved in the situation, but the court asked the company to prove that it did not make the fraudulent bitcoin procedure easier for the attacker.

In response to the lawsuit, Claro denied the request claiming that it is not to blame for the crime in Binance, and asked to get excluded from the legal procedure. However, the court judge disagreed with the company’s statements and asked that it must prove that it is not responsible for the lack of provision of the service.

The case is still open, and now Claro must prove that it did not give advantage to the criminal to commit the fraud, while Binance has not received any lawsuit from the affected party. During the last year, other users from Latin America, such as Colombia and Venezuela, have started legal action against the network for other bitcoin losses.

This situation represents the importance digital asset holders and traders should give to the security procedures to keep their currencies safe. It is always better to house digital assets in self-custody wallets outside of exchanges to circumvent these horrible situations.

By: Jenson Nuñez

The Gemini Exchange Dismisses 10% of Its Staff Due to the Crypto Winter

Alexander Salazar
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The Gemini Exchange Dismisses 10% of Its Staff Due to the Crypto Winter

The Bitcoin billionaires laid off 10% of their employers, attributing their decision to the current macroeconomic and geopolitical turmoil. The crypto exchange stated they would protect their dismissed employees by offering them separation packages and health care benefits.

Bitcoin billionaires Cameron and Tyler Winklevoss recently dismissed 10% of their workforce on crypto exchange Gemini. They attributed their decision to the arrival of the crypto winter.

The twins announced the layoff through their blog, clarifying that they are undergoing a contraction phase known as crypto winter. The brothers said that the current macroeconomic and geopolitical turmoil has further aggravated that situation.

Cryptocurrency exchange Coinbase also reported that its revenue had dropped by 27% since 2021.

TerraUSD (USDT), one of the most popular stablecoins pegged to the US dollar, crashed overnight a few weeks ago. That situation hit the cryptocurrency market severely, causing it to lose billions of US dollars.

Nobody is sure whether the critical situation in the crypto market marks the beginning of the crypto winter. However, the drop in trading volumes on crypto exchanges indicates that the market is heading there. The last known crypto winter began in 2018 and ended in 2020.

The latest funding round of the exchange Gemini revealed that its current valuation is USD 7.1 billion. Besides, it has about 1,033 people on its payroll, which means the recent layoff affected around 100 employees.

The Following Steps They Will Take regarding Dismissed Employees

The crypto exchange stated they would take the following steps to protect the privacy of their dismissed employees. The company will send affected team members a calendar invite to one-on-one conversations about separation packages and health care benefits.

Gemini seems to want to focus on products critical to its mission. Team leaders will assess whether their teams have the right size for turbulent market conditions that might persist.

The company highlighted that hard times are necessary to focus on innovation, a critical factor to their success. Their highest priority would be to treat those affected by the layoff with compassion and respect.

Likewise, FinTech startups like Robinhood and BitMEX have recently reduced their staff due to the situation in the market. However, even though crypto firms cut their payrolls, venture capitalists continue to invest in cryptocurrencies.

The Path of Cameron and Tyler Winklevoss

Brothers Tyler and Cameron Winklevoss have become famous for several reasons. In 2010, they sued Mark Zuckerberg, claiming that the founder of Facebook stole their idea. In addition, the twins participated in the pairs rowing event at the 2008 Beijing Olympics.

However, the most prominent factor is that the Winklevoss twins are cryptocurrency pioneers and billionaires because of Bitcoin.

In 2008, the twins reached an agreement with Zuckerberg for USD 65 million, combining stock and cash. In 2013, the brothers announced that they obtained about USD 11 million in Bitcoin through Winklevoss Capital.

The Winklevoss brothers may have acquired some BTC for as little as USD 10 per unit. At the time, there were rumors that they owned 1% of all Bitcoin in circulation. After they announced it, the price of Bitcoin dropped from USD 180 to USD 80 in a week.

When the price of Bitcoin reached highs of around USD 20,000, the brothers refused to sell their BTC holdings. According to Forbes magazine, they have about 70,000 BTC, accumulating more than 8,000 million US dollars.

By Alexander Salazar

FTX Considers Facilitating Cryptocurrency Derivatives Trading with Goldman Sachs

Audy Castañeda
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FTX Considers Facilitating Cryptocurrency Derivatives Trading with Goldman Sachs

The rapprochement with the fund is intended to make it easier to obtain a new license for the exchange. The proposal raised concerns with regulatory authorities. The association would bring a great change to the derivatives market.

Goldman Sachs Bank is considering partnering with FTX to help the exchange regulate its public listing. Talks began in March. A Barron’s report revealed the fund’s intention to integrate cryptocurrency services with the exchange.

The report was published on May 31 by Barron’s, the financial and fundamental analysis weekly published by Dow Jones & Company. President of the US division of FTX, Brett Harrison, revealed:

“We have several FCMs already committed to technology integration with the exchange. There are several big ones that you can probably name.”

It was also noted in the report that FTX appears to be absorbing some of the market share from what would historically be considered direct competitors on Wall Street. Goldman Sachs’ interest shows that institutions that normally acted as counterparties to leveraged transactions have their eyes on other service offers.

Licenses Change

FTX is seeking to amend its license with the Commodities Futures Trading Commission (CFTC) to be able to act as a cryptocurrency exchange and intermediary for trading leveraged derivatives (FCM).

The director of Bosonic, a cryptocurrency settlement company that caters to institutional investors, Rosario Ingargiola, explains that exchanges cannot offer leverage in the United States without being regulated by the CFTC, leading many of them to look for alternatives:

“It is a big part of the reason why you see major cryptocurrency exchanges buying regulated platforms (Commodity Futures Trading Commission) that allow them to offer derivatives like options and futures to retail clients, because there is a huge demand for leveraged products in the segment. of cryptocurrencies”.

The rapprochement with Goldman Sachs could facilitate negotiations with regulators, however, there are concerns from other regulators and associations with a possible monopoly of the big funds.

Controversial FTX Proposal

The exchange’s proposal is to automate the settlement system, thus boosting the US derivatives market. This has caused friction from the Futures Industry Association (FIA), which represents many of the exchanges that would be affected, as the association fears that FTX could go further, offering crypto to other markets.

The new automated system would calculate margin levels every thirty seconds, liquidating positions or selling margins on shares divided equally if margins are too low. There would be other backup liquidity providers in the worst case.

If the proposal is approved, FTX obtains the licenses and the new system is implemented, this could start the elimination of the intermediaries that are currently responsible for settlements in the derivatives market with Goldman Sachs itself.

The FIA ​​called the FTX plan “innovative” and “transformational,” but warned the CFTC to do its homework before approving the proposal.

On May 13, FTX CEO Sam Bankman-Fried attended a US House committee hearing whose purpose was to evaluate the exchange’s proposal. He advocated the use of computers to make margin calls on leveraged positions, saying that, “the new automated system would be healthy for the markets.”

By Audy Castaneda

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