Large fluctuations tend to follow prolonged periods of consolidation, and according to a Bitazu Capital founding partner, Mohit Sorout, BTC could reach its previous all-time high if it was to break out today.
OKEx, a major crypto exchange, spooked the markets this week by announcing that it had suspended withdrawals.
The company said one of its private key holders was “cooperating with a public security bureau” concerning ongoing “investigations.”
In the immediate aftermath of Friday’s statement, Bitcoin fell nearly 3%, while OKEx’s native token, OKB, crashed 15%.
According to Caixin, OKEx founder Mingxing Xu — also known as Star Xu — was the executive who was questioned by authorities. The Chinese news agency also reported that he was investigated “at least a week ago” and had been absent at work for some time.
Industry executives have expressed surprise at how events unfolded. The Bitcoin Association’s president, Leo Weese, wrote: “That one person sits in China holding the keys to an entire offshore cryptocurrency exchange is probably the most surprising thing about this industry I learned this year. That customers don’t demand transparency about key management comes in at a close second, though.”
Staff at Coinbase fear that the exchange’s leadership are watching their every move and monitoring their messages, it has been reported.
According to Motherboard, the exchange’s newfound “apolitical” stance has led to allegations of surveillance and censorship, but in a leaked recording of an ask me anything session, CEO Brian Armstrong said the “silent majority” supported the move.
Elsewhere, it was claimed that Coinbase’s management had “stunted internal discussion” and forced employees to delete political Slack messages. The exchange responded to Motherboard’s claims by describing the accusations as “quite extreme and absolutely false.”
During an AMA back in June, Armstrong had reportedly resisted the idea of making a public statement in support of Black Lives Matter following the killing of George Floyd by police. However, he later backtracked and posted a series of tweets in support of BLM.
Coinbase has been hemorrhaging employees of late, with at least 5% of its workforce opting to take an exit package if they were unwilling to avoid political and social issues at work.
And we end our news roundup with a painful story courtesy of Ripple’s chief technology officer David Schwartz.
He revealed that he and his wife came up with a “derisking plan” for their crypto investments in 2012 — and missed out on millions of dollars in profit as a result.
Schwartz sold 40,000 ETH for $1 each at the time — a stash that would be worth more than $15.5 million at today’s prices.
The Ripple executive also sold a significant sum of BTC for $750 apiece, and a large trove of XRP for $0.10.
He described himself as a “risk averse person with people who depend on me financially and emotionally” but admitted that selling his crypto at this bargain basement prices “hurt.”
Winners and Losers
At the end of the week, Bitcoin is at $11,435.68, Ether at $375.90 and XRP at $0.24. The total market cap is at $359,603,174,619.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are ABBC Coin (77.11%), Filecoin (44.49%) and Waves (28.70%). The top three altcoin losers of the week are Arweave (-32.22%), OKB (-23.80%) and Crypto.com Coin (-21.98%).
“That one person sits in China holding the keys to an entire offshore cryptocurrency exchange is probably the most surprising thing about this industry I learned this year. That customers don’t demand transparency about key management comes in at a close second, though.”
“I do believe we’ll be seeing a relatively boring and corrective quarter on the cryptomarkets. In history; $ETH frequently bottoms out in December, to start running the quarter after. $BTC dominance to run up, to have an altseason in Q1 2021. Continuing the patience.”
“You can only try to win the hand with the high hand: gold, silver and Bitcoin. You can’t win playing the low hand unless you’re a sovereign state or a major investment bank, and that’s the game today.”
Rapid growth of institutional investments in crypto has prompted 10T Holdings co-founder Dan Tapiero to warn that shortages of Bitcoin could be on the horizon.
He warned: “SHORTAGES of Bitcoin possible. Barry’s Grayscale Trust is eating up BTC like there is no tomorrow. If 77% of all newly mined turns into 110%, it’s lights out. Non-miner supply will get held off market in squeeze. Shorts will be dead. Price can go to any number.”
Institutional demand surged rapidly after March when Bitcoin suffered one of its steepest falls in recent history. This indicates that big players see staying power in the world’s biggest cryptocurrency.
The speculation about a potential supply-side crisis around Bitcoin also coincides with the post-halving cycle. Bitcoin went through its third halving on May 11, and historically, halvings lead to extended bull runs in the two years that follow.
The G7 has warned that it will initially oppose the launch of Facebook’s Libra project.
In a statement that pulled few punches, the Group of Seven wrote: “The G7 continues to maintain that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards.”
The statement was co-authored by central bankers and finance ministers from the United States, Canada, Japan, Germany, France, Italy and the United Kingdom.
Europol has announced that 20 individuals suspected of working for the “QQAAZZ” criminal network have been arrested in an operation that spanned 16 countries.
The organization is accused of laundering tens of millions of euros for top cybercriminals since 2016. About 40 homes were searched as part of “Operation 2BaGoldMule,” with arrests made in Australia, the U.S, the U.K, Portugal, Spain, Latvia and Poland.
On the same day, a 40-year-old man was arrested in New Zealand for using cryptocurrency to launder more than $2 million for criminals — as well as by purchasing luxury vehicles including a Lamborghini and Mercedes G63.
And in the U.S, six individuals have been charged for their participation in a conspiracy to “launder millions of dollars of drug proceeds on behalf of foreign cartels.”