U.S. presidential candidate Robert F. Kennedy Jr. (RFK Jr.) has promised to pardon Ross Ulbricht if elected. Like former U.S. President Donald Trump, Kennedy advocates for Ulbricht’s release. Both candidates vow to stop President Joe Biden’s anti-crypto policies and oppose the creation of central bank digital currencies (CBDCs). RFK Jr. Advocates for Ross Ulbricht’s Pardon […]
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Crypto Traders Discuss Why Memecoins Have Been 2024’s Most Profitable Narrative
Journalist and host Laura Shin interviewed crypto traders Ansem and Kel, known on X as blkoiz06 and Kelxyz, for her Unchained Podcast. They discussed why memecoins had become the most profitable crypto trade this cycle and what the future might hold for the sector.
Is There Value In A Memecoin?
To begin with, Shin asked the traders whether there was substance in tokens based on memes, as it has been a big argument against them. To Ansem, people “think too hard” about the value of memecoins as projects. Moreover, he considers there’s no real gain in comparing whether other altcoins deserve or have more value than meme-based tokens.
Why Memecoins Have Been 2024’s Most Profitable Crypto Trade: Ansem and Kelxyz
Dive into the wild world of memecoins with @blknoiz06 and @kelxyz_!
Discover how Ansem and Kel trade memecoins,
the risks and rewards, and their predictions for the future of memecoins
Plus,… pic.twitter.com/QovysNwAGP
— Laura Shin (@laurashin) May 7, 2024
Ansem further explains that the crypto community is “very internet-centered,” with its members being “internet people” since crypto’s origin. As a result, the community is knowledgeable about the financial aspect but is also knees-deep in online culture.
The trader believes “there’s value in memes and culture on the internet.” People in the community are “financializing” meme virality and realizing that it’s a possibility with crypto.
Shin jokingly added that if this trend had been popular in 2016, the Drake meme creator would be a “bazillionaire” by now. The host seemingly referenced the still-popular meme that originated from Drake’s Hotline Bling music video.
Agreeing with this argument, Kel asserted that, over the last 20 years, many trillion-dollar businesses have capitalized attention as their “winning trade businesses idea.”
All these trillion-dollar businesses (…) facilitate directing attention and the way they’ve done that successfully has been, oftentimes, via memes. One could even make the argument that memes are the core engine of the entire Internet.
The Risks And Criticisms Of Memecoin Mania
To understand why memecoins have become the narrative of Q1 2024, the traders discussed the risks and arguments against the tokens.
One of the biggest criticisms of memecoins is their high-risk nature. Because they are much smaller and not backed by institutional money, they can “be riskier” and “more easily go to 0.”
Despite this, traders consider that many investors, especially new ones, find memecoins attractive because they have the potential to give 100x to 1000x returns.
Moreover, losing money is not exclusive to memecoins. To illustrate his point, Ansem compared the people who bought Doge’s top to those who bought Bitcoin at ,000 last cycle before it fell to ,000.
To the trader, how much a token can drop and investors buying the top is part of the general market dynamics instead of a characteristic of memecoins. However, he clarifies that there is better criticism of the sector.
Ansem considers the shady behavior behind the projects’ teams a crucial issue to address. To him, a framework could prevent creators from controlling a large supply of the tokens and dumping them immediately after launch or rug-pulling investors.
In the replies to the podcast, a user argued that the reason behind the recent frenzy is driven by “the Financial nihilism and the lack of liquidity that the youth has.” Adding that investors are “Buying a mere coin is like a lottery ticket.”
It is worth mentioning that trading memecoins like lottery tickets is not an unseen phenomenon. On-chain research platform Lookonchain recently reported a trader seeing 4,906x gains in one day by precisely doing that.
This guy won a 4,906x lottery ticket today, so lucky!
He trades MEMEcoins like buying a lottery ticket, investing 0.1/0.2/0.3 $SOL for each #MEMEcoins.
He invested 0.2 $SOL() in $AGORA today, then sold 2M $AGORA for 0K, with 959K $MILK(worth K) left.
So he turned … pic.twitter.com/fnJDQnavfI
— Lookonchain (@lookonchain) May 7, 2024
Per the report, the trader invests 0.1/0.2/0.3 SOL for each memecoin. Yesterday, the investor turned into 7,000 by turning 0.2 SOL into 2 million AGORA.
What’s In Memecoins’ Future?
When asked what is in store for the sector, both traders concurred that memecoins are not going away. To Ansem, the community behavior towards memecoins is like that of NFTs last cycle. With NFTs, investors felt like they were part of a community and were working towards developing it.
The shared experience of relating is another crucial factor in the craze of meme-based tokens, as seen in communities of tokens like Dogwifhat (WIF).
Adding to that idea, Kel asserted that “all memes will become coins” in the next ten years. Moreover, the trader wouldn’t be surprised if “the creation of a meme was natively financialized” by then, as the trend of financialization of things continues to increase.
Ultimately, he believes the sector is in the early stages of this trend as the community tries to “capture the moment of a meme” and capitalize on it now that crypto has made financialization “trivial from a tech perspective.”
Ethereum “Has Been A Major Disappointment”: Trader Weights In On This Crypto Cycle
This crypto cycle achieved some remarkable feats during Q1 2024, including the highest monthly and quarterly close in Bitcoin (BTC) history. However, BTC suffered a retrace that dragged Ethereum (ETH) and the rest of the crypto market down as the year’s second quarter started.
Now that we are one month into Q2, the market faces another correction. The most recent retrace became the deepest of the cycle, with Bitcoin nosediving into the ,000 support zone and Ethereum falling below ,000. Despite the market’s stumble, analysts remain optimistic for what’s to come.
What Makes This Cycle Different?
Traders and analysts have urged investors not to panic about the retraces yet. A broader look shows that the market is above levels not seen since the last bull run. As many have discussed, there’s a significant resemblance between this cycle’s performance and previous ones.
However, analysts have also pointed out the singularities of this bull run. Compared to the 2020 cycle, altcoins “didn’t even run that hard over the last few months,” as renowned analyst Altcoin Sherpa highlighted.
After Wednesday’s correction, trader and economist Alex Krüger weighed in on this cycle’s performance. Krüger concurs with some of Sherpa’s points, considering that the market’s “too many” options have made the playfield more convoluted.
Some thoughts on the current crypto cycle
#1 The crypto cycle has been almost entirely driven by the bitcoin ETF.
#2 ETH has been a major disappointment, but it has performed well overall for stakers and airdrop farmers.
#3 Solana established itself as the chain of choice for…
— Alex Krüger (@krugermacro) May 1, 2024
Similarly, he also has noticed the desire “to focus on making a quick buck” and investing in “short-term hype rather than on longevity.”
The trader highlighted that the Bitcoin exchange-traded funds (ETFs) have “almost entirely” driven this cycle. Besides BTC, memecoins have been the dominating narrative of the bull run, ranking among the top gainers of Q1 2024.
Moreover, Krüger asserted that most market participants who missed the Bitcoin ETF run “went all in on altcoins to compensate.” As a result:
They deployed late and poorly, going in larger at higher levels, and are now seething and at a loss, as too many altcoins have given up their entire 2024 gains in the last month.
Ethereum “Disappointing” Run
One of the crucial points of Krüger’s analysis is Ethereum’s overall unsatisfactory performance. To the crypto veteran, the second-largest cryptocurrency by market capitalization “has been a major disappointment” even though it has performed well for stakers and farmers.
Despite seeing massive gains alongside Bitcoin’s run, Ethereum has not been able to challenge its all-time high (ATH) price set over two years ago. Furthermore, Solana overtook Ethereum after “establishing itself as the chain of choice for retail traders.”
It’s worth noting that the turmoil surrounding Ether and the Ethereum Network has seemingly affected the token’s recent performance. The “king of altcoins” is currently facing severe regulatory scrutiny.
The suspicion of a spot Ether ETF rejection from the US Securities and Exchange Commission (SEC), alongside the news of the agency’s investigation on the asset’s classification as an “unregistered security,” seems to have created uncertainty around ETH.
Ethereum’s current landscape has reignited deeming conversations against its founders and the asset, possibly fueling the doubtful sentiment surrounding a sector of the crypto community.
Despite the challenging landscape, many analysts consider that investors should not be bearish on Ethereum. After falling 4.5% and 14.39% in the weekly and monthly timeframes, ETH has recovered 3.3% of its price in the past 24 hours.
Ultimately, Krüger’s consideration concludes that “the cycle is not over.” However, he points out that investors “need to move out of the panic area and reignite the majors” before finding a new narrative for this run.
Analyst: Bitcoin Has Never Been This Bullish, What’s Next?
While Bitcoin treads water around ,000, with some predicting a slump, one analyst on X is swimming against the current, claiming the coin has “never been this bullish.” The coin is bullish despite cooling off from 2024 highs above ,000.
Analyst: Bitcoin Is Bullish, Here’s Why
The analyst Mags argues that Bitcoin is, at spot rates, defying historical patterns and showing bullish signals, especially looking at the candlestick arrangements. Specifically, Bitcoin recently closed a weekly candle above the 0.618 Fibonacci level before the next halving event. Mags said this is the first time in the four-year cycle.
Therefore, though Bitcoin prices have been moving horizontally in the past few trading days, with fears of price slumps, the development in the weekly chart is overly bullish. Further bolstering their optimism, Mags points to the increasing demand for Bitcoin from institutional investors following the launch of spot Bitcoin exchange-traded funds (ETFs).
Wall Street heavyweights, including Fidelity, issue some of these products. BitMEX Research data shows that spot ETFs continue to siphon more and more coins from circulating supply, sending them to custodians, like Coinbase Custody, for safekeeping. These coins will likely be released in the coming years, not months.
Besides institutional interest, optimism for more price gains also stems from the absence of retail interest at spot rates. Data from Coinbase shows that unlike the spike in interest that drove Bitcoin to ,000, mainly at the back of retailers, BTC prices are up, but the dynamics are changing.
Will Retailers Take BTC To New Levels?
Solid data reveals that retailers are mostly not interested in the coin at spot rates, looking at the amount retailers have been spending on the coin. By Q4 2021, retailers acquiring Bitcoin via Coinbase spent roughly 7 billion. However, this figure sharply fell throughout 2022 during the bear market, finding support in H2 2023.
Then, according to exchange data shared by Will Clemente on X, retailers began loading the coin from Q3 2023. The figure has risen to around billion in Q1 2024–less than 25% of Q4 2021 volumes.
How retailers will impact the price of Bitcoin in the future is yet to be seen. In the past, retail fear of missing out (FOMO) has been a critical price driver. Presently, CoinStats sentiment tracker, Fear & Greed indicator, stands at 74, at “greed” territory, down from “extreme greed” on February 22.
This reduction could be possible because of the fake breakout that lifted Bitcoin above ,000. The coin has support at ,500 but generally remains in a bullish pattern.
Raging Inferno: Over 3% of All Ether Supply Has Been Burned Since Implementing EIP-1559
Ethereum has shed a significant part of its supply since the London upgrade, applied in August 2021. According to ultrasound.money, a portal that records several statistics associated with the ETH burn, over 4 million ether (3.2%) have been removed from the network since the adoption of EIP-1559, which changed how fees are calculated. EIP-1559 Burns […]
Bitcoin News
Vaneck Exec States Solana Outage Might Have Been Manually Triggered
Matthew Sigel, head of digital assets research at Vaneck, revealed that there is speculation around the cause of the latest Solana outage, which stopped its blockchain by five hours. Sigel explained that the bug that created this service interruption was related to the Berkley Packet Filter (BPF) and that it might have been manually triggered. […]
Bitcoin News
Former Terraform Labs Financial Officer Has Been Extradited to South Korea — Montenegro Police
Montenegro recently extradited the former Terraform Labs financial officer Han Chang-joon to South Korea where he faces fraud-related charges. According to the Montenegro police, the decision to extradite Han was made by the country’s Justice Ministry.
Han Faces Criminal Charges in South Korea
Han Chang-joon, the former financial officer of Terraform Labs, has been extradited to South Korea, the Montenegro police have said. The extradition comes almost a year after he and Terraform Labs co-founder Do Kwon were arrested while attempting to flee the country.
According to the police, the decision to transfer Han into South Korean custody was made by the Montenegro Justice Ministry. As previously reported by Bitcoin.com News, Han and Do Kwon were arrested after authorities found them in possession of counterfeit identity documents.
They were subsequently sentenced to four months in jail for the offence. Do Kwon later appealed the verdict, but a superior court reportedly rejected his appeal in November 2023.
Explaining the government’s decision to extradite the financial officer, the Montenegro police said:
Han [was extradited to allow South Korean authorities to initiate] criminal proceedings for several criminal offences related to fraud in financial investment services, investments and the capital market, which is punishable by life imprisonment in South Korea.
However, concerning the extradition of Do Kwon, who is wanted by both South Korean and U.S. authorities, the Terraform Labs co-founder’s lawyer said they were waiting for the court to make a ruling on another appeal.
What are your thoughts on this story? Let us know what you think in the comments section below.
Ethereum Eclipses Bitcoin In A Crypto Coup: Has The King Been Dethroned?
The winds of change are swirling through the once-Bitcoin-dominated cryptocurrency landscape, as Ethereum (ETH) stages a stunning rally, leaving the reigning king, Bitcoin (BTC), in its wake.
Just days after the highly anticipated approval of Bitcoin’s spot ETF, a paradoxical scene unfolds: ETH soars 13.5%, scaling a 9-month high above ,650, while BTC stumbles with a 10% dip. This unexpected turn of events has sent shockwaves through the crypto community, igniting a fierce debate – is Ethereum finally usurping Bitcoin’s throne?
While the Bitcoin ETF approval was initially heralded as a game-changer, its muted impact left investors bewildered. This begs the question: what hidden forces are propelling Ethereum’s meteoric rise? Several factors seem to be fueling this ETH revolution:
Tech Titans Take Notice
Unlike Bitcoin, often shrouded in an aura of anonymity and regulatory uncertainty, Ethereum is increasingly embracing a collaborative, future-oriented approach. Upcoming technological advancements like the “Dencun” hard fork promise enhanced data availability and reduced transaction costs, while account abstraction paves the way for smoother user experiences and secure social logins.
Larry Fink is already beating the Ethereum drum. One day after the Bitcoin launch.
The rotation is real. https://t.co/5Ctvqqqauy
— The Wolf Of All Streets (@scottmelker) January 12, 2024
These innovations are attracting the attention of tech giants like BlackRock, whose CEO, Larry Fink, recently expressed “seeing value” in a potential Ethereum ETF. This institutional validation adds significant fuel to the ETH fire.
Ethereum Staking Rewards And Scarcity
Unlike its proof-of-work rival, Ethereum rewards its holders with attractive annualized staking rewards (around 4.3%). This incentivizes investors to lock up their ETH in the network, effectively reducing supply and pushing the price up. Additionally, Ethereum’s issuance rate is slightly negative, further contributing to its scarcity and increasing its appeal as a valuable asset.
Outpacing The Competition
While Bitcoin grapples with its identity crisis, Ethereum thrives in a bustling ecosystem of decentralized applications (dApps) and blockchain-based projects. This vibrant network effect creates a self-reinforcing loop, attracting developers, users, and investors, and solidifying Ethereum’s position as the go-to platform for innovation in the blockchain space.
Meanwhile, direct competitors like BNB and SOL have encountered recent stumbles, further highlighting Ethereum’s relative strength and resilience.
The ETF Factor Looms Large
Though still shrouded in uncertainty, the possibility of an Ethereum ETF approval later this year adds another layer of intrigue to the story. With BlackRock openly advocating for it, and regulatory hurdles potentially clearing by May, the prospect of an influx of institutional capital into the Ethereum market has investors salivating.
However, the crypto world is as unpredictable as a rollercoaster. While Ethereum’s current trajectory is undeniably impressive, challenges remain. Regulatory hurdles, potential network upgrades, and broader market fluctuations could all disrupt its momentum.
Meanwhile, Bitcoin, though seemingly faltering, still boasts a massive market cap and a loyal following. It’s too early to write off the digital gold just yet.
The battle for crypto supremacy has entered a fascinating new chapter. Ethereum, armed with technological prowess, staking rewards, and a burgeoning ecosystem, appears poised to challenge Bitcoin’s long-held dominance.
But whether it can dethrone the king and claim the crown remains to be seen. This crypto saga, still unfolding with every traded byte, promises to keep us on the edge of our seats, wondering who will ultimately rule the digital kingdom.
Featured image from Shutterstock
Bitcoin Vulnerability Discovered By A Developer Has Been Flagged By The US Government
Last week, a Bitcoin developer Luke Dashjr raised alarm about a possible vulnerability in the network in relation to the Bitcoin Ordinals that could lead to a code exploit. After posting his findings to social media, Dashjr’s warnings were not taken seriously as community members believed it was a non-issue. However, the US government seems to be taking the vulnerability seriously, adding it to its vulnerability database.
Dashjr’s Finds Vulnerability In Bitcoin Network
Dashjr had first raised alarm about the bug in the Bitcoin network on December 6 through an X (formerly Twitter) post. As the developer explains, this bug was related to the BTC Inscriptions which have gained popularity in the last year. This capability has helped developers to create what could be referred to as Bitcoin’s version of non-fungible tokens (NFTs).
Elaborating on the mechanism of Ordinals, Dashjr explained that the Inscriptions were actually taking advantage of a vulnerability in the Bitcoin Core. Developers are able to hide their data as program code, thereby being able to bypass the preset limit on the size of extra data that can be included in BTC transactions.
Dashjr explained that he was working to fix this issue. However, the vulnerability remains as developers are still able to create inscriptions on the network. Even after being fixed in the “Bitcoin Knots v25.1,” the developer explains that the vulnerability still remains “in the upcoming v26 release.” As for when the vulnerability might be completely fixed, Dashjr said he hopes this will happen sometime in 2024.
As Bitcoinist reported, not everyone in the community agreed that this was actually a vulnerability. Some worried that if the ‘vulnerability’ is eventually fixed, Ordinals and BRC-20 tokens would disappear, to which Dashjr responded in the affirmative.
NIST Adds BTC Bug To Vulnerability List
Despite the Bitcoin community not taking the warning of the vulnerability seriously, the United States government has chosen a more proactive approach. The National Vulnerability Database which is under the government agency, the National Institute of Standards and Technology (NIST), has moved forward to add the vulnerability to its Vulnerability List under ‘Common Vulnerabilities and Exposures.’
The agency has assigned the vulnerability with the code CVE-2023-50428 after identifying that it could be a potential risk for the network, especially when it comes to security or integrity. This means the agency believes this could lead to an exploit in the Bitcoin network.
The very existence of Ordinals and BRC-20 tokens is already identified as one of the ways that this vulnerability is already being exploited. Naturally, the agency is looking to prevent other ways in which the vulnerability could be further exploited in a way that could cause harm to its users.
Bitcoin Has Been In A Class Of Its Own For The Last 10 Years, Top Expert Says
Bitcoin has encountered a critical resistance level going into the weekend and could move sideways following a massive rally. According to an expert, the cryptocurrency has been breaching every major obstacle, making it one of the best-performing assets.
As of this writing, Bitcoin (BTC) trades at ,600 with sideways movement in the last 24 hours. Over the previous seven days, BTC recorded a 14% increase, with Ethereum following its footsteps, recording a 13% rally.
Bitcoin vs. Gold: The Digital Currency’s Journey to ,000
Jurrien Timmer, Director of Macro for Fidelity, offers insightful analysis of Bitcoin’s trajectory, likening it to “exponential gold.”
His thesis suggests that Bitcoin, much like its elder counterpart, gold, holds value in times of structural inflation, yet it boasts an added venture twist. In that sense, Timmer believes both assets are prime to capture attention from investors looking to protect themselves from “reckless monetary inflation.”
As seen in the chart below, if Bitcoin follows a similar trajectory to the previous, its price could target 0,000 and ,000,000 by early 2025.
2020 was pivotal for Bitcoin and gold, with fiscal and monetary stimulus bolstering their appeal. However, Bitcoin differentiates itself with its capped supply of 21 million coins, contrasting gold’s continual but modest annual supply growth.
This limited supply has propelled Bitcoin’s “stock-to-flow” (S2F) ratio significantly higher than gold’s. Moreover, Bitcoin’s journey reflects the classic S-curve path of technological innovations. Its exponential growth trajectory mirrors historical trends in technology from railroads to cell phones.
However, predicting Bitcoin’s future based on these S-curves is complex, as slight deviations in these growth phases can “dramatically” alter outcomes, the expert claims.
SEC Deliberations And Institutional Interest Shape Bitcoin’s Future
Timmer’s observations include a potential impact of the SEC’s anticipated decisions on the Bitcoin spot Exchange Traded Fund (ETF). He theorizes that pending product applications could attract new investors, yet he remains cautious about whether this will trigger a “sell-the-news” event and a large drawdown.
Interestingly, a small percentage of Bitcoin is held for under three months, suggesting that the recent price surge is not merely “speculative,” offering support for a longer bullish trend.
The true believers in Bitcoin, as indicated by the growing percentage held for over five or ten years, are unlikely to be swayed by short-term news. However, there is notable activity in the Bitcoin futures market, particularly among asset managers, which could suggest anticipation of the SEC movement.
Any updates from the SEC would arrive in a transformed macroeconomic environment. Unlike the liquidity-rich period of 2020-21, the US Federal Reserve’s (Fed) recent policy shifts have reversed the surge in monetary inflation.
This shift aligns the current situation more with the post-World War II era than the inflationary 1970s, impacting the urgency of the value proposition for gold and Bitcoin.
As BTC matures, its relationship with traditional financial markets and global economic trends becomes increasingly intricate. With the SEC’s decision and a shift in the macro-arena, the coming months are poised to exercise influence over the premier cryptocurrency and the nascent sector.
Cover image from Unsplash, chart from Tradingview