Hodler’s Digest, Feb. 11-17 – Cointelegraph Magazine

Ether staking deposits touch $85B, 25% of circulating supply now locked up

February has been a bullish month for the Ethereum network so far, with the total amount of staked Ether (ETH) in the Beacon Chain reaching 30,206,801 ETH, locking up nearly 25% of the total circulating supply. There are currently 943,974 active validators on the Beacon Chain. Between Feb. 1 and 15, investors deposited 600,000 Ether into Ethereum 2.0 staking contracts. February also saw the ETH price surge to yearly highs above $2,800. The volume is seen as a bullish sign for the Ethereum network. At least two asset managers seeking approval for an Ether exchange-traded fund are also seeking to include instaking into their products.

Big banks are nudging the SEC for a slice of sweet Bitcoin ETF action

Major banks and financial institutions are pushing the United States Securities and Exchange Commission to revise its definition of crypto assets, which could allow them to act as custodians to the recently approved spot Bitcoin exchange-traded funds. A coalition of these institutions submitted a letter to the SEC on Feb. 14, seeking amendments to the Staff Accounting Bulletin 121 issued in March 2022. They stated that it has been two years since the issuance of the guidance, and there have been “several relevant developments” during the period, including the approval of spot Bitcoin ETFs. The current guidance requires banks to hold crypto assets on their balance sheet, which makes it costly and hinders their ability to provide crypto custody services at scale.

Binance founder CZ’s sentencing date postponed to late April

The criminal sentencing for Binance founder and former CEO Changpeng “CZ” Zhao has been pushed back to April 30. The “notice of rescheduled hearing” was filed in a Seattle Federal Court on Feb. 12. Zhao was originally due to be sentenced on Feb. 23 after pleading guilty to money laundering charges. He is expected to face up to 18 months in prison. Zhao’s legal team is expected to argue for no jail time or an alternative sentence and request to combine prison time with home detention and probation. The former executive is currently out on bail on a $175 million bond and is residing in the U.S., awaiting his sentencing.

20% of Bitcoin hash rate could go offline after halving — Galaxy Digital

Galaxy’s mining analysts predict that up to 20% of Bitcoin’s hash rate could go offline following the Bitcoin halving, due to reduced block rewards that favor only the most efficient mining rigs. By the end of 2023, eight ASIC miner models produced over 70% of Bitcoin’s hash rate, but the upcoming halving will decrease block rewards from 6.25 BTC to 3.125 BTC, significantly impacting the profitability of various ASIC models. This shift, combined with future power price predictions and a Bitcoin price assumption of $45,000, suggests that less efficient models like Bitmain’s S9, Canaan’s A1066, and MicroBT’s M32 could be phased out, while more efficient models such as MicroBT’s M20S and Bitmain’s S17 may survive.

Gold ETFs bleed $2.4B so far in 2024 as Bitcoin ETFs hit record volumes

Gold-tracking ETFs experienced significant outflows in 2024, totaling $2.4 billion across 14 leading ETFs, according to data from Bloomberg’s analyst Eric Balchunas. In contrast, the spot Bitcoin ETFs have witnessed substantial growth, with the 10 approved funds attracting aggregate inflows of $3.89 billion since their inception on Jan. 11. The largest withdrawals were observed in BlackRock’s iShares Gold Trust Micro and iShares Gold Trust, facing outflows of $230.4 million and $423.6 million, respectively. On the other hand, BlackRock has multiplied the iShares Bitcoin Trust’s holdings by more than 3,700% since debuting IBIT, growing its assets under management from 2,621 BTC to 100,000 BTC within a month.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $51,813, Ether (ETH) at $2,779 and XRP at $0.56. The total market cap is at $1.94 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Bitget Token (BGB) at 54.92%, VeChain (VET) at 54.85% and Siacoin (SC) at 46.66%.

The top three altcoin losers of the week are Celestia (TIA) at -8.82%, Astar (ASTR) at -7.05% and Osmosis (OSMO) at -5.51%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“Crypto-assets are de facto traded in U.S. dollars. So, it is likely that any expansion of trading in the DeFi world will simply strengthen the dominant role of the dollar.”

Christopher Waller, member of the Federal Reserve Board of Governors

“Most of the current ETFs launched will never even break even as costs will only work if they get to billions of assets under management, which they won’t.”

Hector McNeil, co-chief executive officer and founder of HANetf

“Not only is Bitcoin sucking up funds, but gold is hemorrhaging AUM at an alarming rate across many ETFs.”

Bitcoin Munger, pseudonymous portfolio manager

“Privacy by promise is not enough. The Treasury and the Bank of England will need to go further to explain why the U.K. needs a CBDC.”

Susannah Copson, legal and policy officer at Big Brother Watch

“Things that we completely take for granted turn out to be extremely complicated for computers to reproduce. So AGI, or human-level AI, is not just around the corner.”

Yann LeCun, chief AI scientist at Meta

“Having the ability to save in ‘digital dollars’ allows Argentinians to save money in the long run as the local currency loses value.”

Ramiro Raposo, vice president at Bitwage

Prediction of the week

BTC price due $55.4K next amid warnings over end of Bitcoin ‘euphoria’

Bitcoin was on the way to $55,000 this week — but warnings of a new bear market are already surfacing. Popular pseudonymous trader Titan of Crypto confirmed a $55,400 BTC price target next in his latest analysis on X (formerly Twitter) on Feb. 14.

“Both target 1 & 2 have been hit but $50,900 is a strong level. If Bitcoin manage to close a weekly candle above, target 3 at $55.4k is next,” part of the accompanying commentary stated.

Looking ahead, however, concerns over a potentially “overheated” market are leading to BTC price downside predictions. Pseudonymous trader and analyst Credible Crypto warned that even if existing all-time highs are exceeded and BTC/USD passes $100,000, the odds of a snap correction are increasing.

“At the end of the day, for every major parabolic rise there is a major crash, and vice versa,” the trader wrote on X.

FUD of the Week

GoFundMe shuts down Tornado Cash legal defense crowdfunding

Crowdfunding platform GoFundMe canceled a fundraiser dedicated to collecting legal fees for the co-founder of controversial crypto mixer Tornado Cash, Roman Storm, and its developer, Alexey Pertsev. On Jan. 22, Storm released a video asking community members to fund the legal fees for its court battle against the United States authorities for allegedly facilitating the bypass of U.S. sanctions. GoFundMe canceled the fundraiser, citing the breach of their terms of service, claiming it could “expose GoFundMe, its employees or Users to any harm or liability of any type.” The company returned donors’ money.

YouTuber KSI faces pump-and-dump allegations from ZachXBT and Coffeezilla

YouTube celebrity Olajide Olayinka Williams Olatunji, known as “KSI,” has been accused of engaging in pump-and-dump schemes by pseudonymous crypto investigators ZachXBT and Coffeezilla following the reactivation of his crypto-focused account on X (formerly Twitter). After reviving his account on February 14, KSI, who has around 371,000 followers, was quickly criticized by ZachXBT for potentially misleading crypto promotions, specifically involving the XCAD Network and Ethernity Chain, where KSI was seen promoting tokens and then allegedly selling them for large profits.

US investigates Trust Wallet iOS app for vulnerability

An agency of the United States Department of Commerce is analyzing an older version of the “Binance Trust Wallet app” for a vulnerability that could allow an attacker to steal funds from crypto wallets. According to the National Institute of Standards and Technology (NIST), a specific version of the Trust Wallet app “misuses the trezor-crypto library” to generate mnemonic words that can be verified only at the entropy source. NIST noted that a similar vulnerability was exploited in July 2023, leading to economic losses.