Crypto News Headlines (30-Jun-2022)

Bitcoin fell toward the $19,000 level in Asian afternoon hours after central bankers renewed inflation warnings at the European Central Bank’s (ECB) annual forum on Wednesday.

The asset dropped 5.5% in the past 24 hours, and is on track for a record 40% monthly decline. Other large cryptocurrencies also weakened, with ether notching a 9.9% 24-hour drop and Solana’s SOL falling as much as 11%. Total cryptocurrency market capitalization lost 4.3%.

Federal Reserve Chairman Jerome Powell reiterated the Fed’s commitment to increasing interest rates to curtail inflation. Speaking at the ECB meeting, he said he was more concerned about the challenge posed by inflation than the possibility of higher interest rates pushing the U.S. economy into a recession.

“Is there a risk we would go too far? Certainly, there’s a risk,” Powell said. “The bigger mistake to make – let’s put it that way – would be to fail to restore price stability.”

Powell said the Fed had to raise rates rapidly, Reuters reported, adding that a gradual increase could cause consumers to feel that higher prices of commodities would persist. About a week ago, his comments suggested rate hikes could soften before next year.

The Nasdaq-listed software company Microstrategy has bought the bitcoin dip again. In a Wednesday filing with the U.S. Securities and Exchange Commission (SEC), the company declared that during the period between May 3 and June 28, it “acquired approximately 480 bitcoins for approximately $10.0 million in cash, at an average price of approximately $20,817 per bitcoin, inclusive of fees and expenses.” The filing adds:

As of June 28, 2022, Microstrategy, together with its subsidiaries, held an aggregate of approximately 129,699 bitcoins.

Overall, the company’s BTC “were acquired at an aggregate purchase price of approximately $3.98 billion and an average purchase price of approximately $30,664 per bitcoin, inclusive of fees and expenses,” the filing further details.

Microstrategy recently dispelled the rumor that it may be facing a margin call on a bitcoin-backed loan from Silvergate Bank.

After hackers stole $100 million worth of cryptocurrency from Harmony Protocol on Friday, the team behind the layer 1 blockchain announced it would offer a $1 million reward to anyone with information about the hacker.

As of this afternoon, a lead suspect has emerged.

According to a report released today by blockchain analytics firm Elliptic, the manner in which the funds were stolen and subsequently laundered points to the involvement of The Lazarus Group, a notorious North Korea-affiliated cybercriminal organization.

In April, the U.S. government concluded that Lazarus, a “state-sponsored hacking organization” according to the FBI, was behind the $622 million hack of a cross-chain bridge used by the play-to-earn game Axie Infinity. Cross-chain bridges connect blockchains and are often used to link sidechains (like Axie’s Ethereum sidechain Ronin), which can offer speed and lower transaction fees before passing work back to more secure blockchains like the Ethereum mainnet.

Bitcoin (BTC) continued its bearish action overnight, with the leading cryptocurrency dropping to a low of $18,993, according to data from CoinMarketCap.

After staging a recovery, Bitcoin is currently changing hands for around $19,140 a piece, down 4.8% on the day.

BTC has nearly lost half of its value over the past month amid serious inflation concerns and rate hikes announced by central banks including the U.S Federal Reserve.

The market capitalization of Bitcoin has plummeted from $1.27 trillion in November 2021 to under $366 billion today. 

Ethereum (ETH), the second-largest cryptocurrency in terms of the market cap has also slipped to around $1,030, a 9% decline over the past 24 hours.

With its current market capitalization of under $125 billion, ETH is down 80% from its all-time high of $4,891.70, recorded in November 2021 per data from CoinMarketCap.

Lin Chuan is on track to graduate next year with a master’s degree in computer science from Peking University. The weak global economy notwithstanding, he plans to start his career working in the next iteration of the internet, blockchain-based Web3.

The 23-year-old has interned at Baidu, China’s internet search behemoth, and at global venture firm GGV Capital. He is disappointed by the dwindling opportunities in Web2 amid China’s tech crackdown and fascinated by the growing potential in Web3. An adventurer in spirit, he doesn’t want to settle down at a traditional tech company, like most of his computer science peers do.

This piece is part of CoinDesk’s Future of Work Week series.

“Finding a stable job, getting married, buying a house … these are just not my thing,” he said. “I look for flexibility, freedom and a faster career path … and this space is just like that, and with little office politics or nepotism. It is about your individual abilities – you get rewarded for what you can do.”

Crypto exchange Coinbase analytics program, Coinbase Tracer, will provide the U.S. Immigrations and Customs Enforcement agency (ICE) with data about crypto users, including their “historical geo tracking data” and transaction history, according to a contract obtained by watchdog group Tech Inquiry,

The contract adds detail to what was previously known about the three-year deal between the crypto exchange and ICE, the law enforcement arm of the U.S. Department of Homeland Security (DHS). The Intercept initially reported the news.

A representative for Coinbase denied that the information provided by the analytics software is the exchange’s customer data.

“All Coinbase Tracer features use data that is fully sourced from online, publicly available data, and do not include any personally-identifiable information for anyone, or any proprietary Coinbase user data,” the spokesperson told CoinDesk.

Crypto winter has done a lot of damage since the bull run’s price highs, as more than $2 trillion has left the digital currency economy since the first week of November 2021. Today, the crypto economy is worth roughly $945 billion and bitcoin (BTC) is coasting along just above the $20K per unit range.

BTC is down more than 70% from the all-time high ($69K) on November 10, 2021, and ethereum (ETH) has lost more than 77% since the ATH ($4,878) recorded on the same day. On June 28, 2022, or eight months later, the publicly listed Canadian investment company Cypherpunk Holdings revealed it had dumped all of its bitcoin and ether holdings.

Cypherpunk Holdings (CSE: HODL) (OTC Pink: CYFRF) was one of the many publicly listed companies that held bitcoin and ethereum on its balance sheet. The update from the company notes that the sale was due to risk and it said the crypto economy may see “significant drawdowns” going forward.

The Securities Exchange Commission on Wednesday rejected an application from Grayscale Investments to convert its Grayscale Bitcoin Trust (GBTC) to an ETF, an effort Grayscale has been publicly pushing since April of last year.

Now Grayscale is suing.

In its ruling, the SEC said the Grayscale spot ETF application did not do enough to protect investors from “fraudulent and manipulative acts and practices.”

After the SEC made its announcement, Grayscale CEO Michael Sonnenshein quickly took to Twitter to announce the legal action.

According to Grayscale, the company is filing a “petition for review” with the United States Court of Appeals for the District of Columbia to challenge the decision to deny the conversion of Grayscale Bitcoin Trust to a spot Bitcoin ETF.

As the Grayscale Bitcoin Trust (GBTC) discount — the value of the shares versus the underlying asset — continues to trade in the double-digits, the Securities and Exchange Commission has rejected the company’s application to convert it into an ETF. While Grayscale has filed a lawsuit against the SEC to try to force their hand \to change this, Messari Research’s Ryan Selkis has laid out a few scenarios in a note that he sees as possible outcomes for this quagmire.

Grayscale is a subsidiary of Digital Currency Group, which owns CoinDesk.

Should GBTC be converted to an ETF, it would be a massive loss in fee revenue for Grayscale as the firm takes a 2% fee on the underlying assets regardless of the discount.

“A ‘winning’ case and ultimate ETF conversion would eviscerate Grayscale’s revenue by more than 50%. An ETF would mean an open redemption window, and a likely reduction in fees in order to retain AUM (assets under management). We’re talking about $200 million+ per year in profit reduction for DCG,” Selkis wrote.

More than 80,000 Bitcoin (BTC) investors have had their millionaire status revoked due to the crypto market downturn, but lower prices mean the number of whole coiners is growing.

Back on Nov. 12, just days after Bitcoin hit a new all-time high of around $69,000, a total of 108,886 BTC addresses reported a balance greater than $1 million, according to data from BitInfoCharts.

Fast forward to the present day, with the price of Bitcoin struggling to hold above $20,000, a mere 26,284 addresses are reported to contain holdings valued at upward of $1 million, meaning that the number of paper millionaires has declined by more than 75% throughout the last nine months.

The dramatic decline in the price of the flagship cryptocurrency has also impacted the number of whales — those who boast a Bitcoin wallet worth more than $10 million. While there were 10,587 addresses with a minimum cash value of $10 million in Nov. last year, just 4,342 hold the same status today, a decline of 58%.