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Bitcoin’s volatility came back in a big way this week, crossing $12,000 late Saturday night before falling 12% in a matter of minutes. More than $1 billion worth of cryptocurrency was liquidated during the crash, and ether plunged 25% before recovering most of those losses within 10 minutes. Bitcoin also rebounded as the week progressed to get near $12,000 again, sustaining a move past the $11,500 resistance level.
Algorithmic trading and profit-taking around $12,000 may have helped cause the wild price swings; many investors have stop orders built into their accounts, but overleveraged investors can get wiped out by these stop drives and go broke if they aren’t careful.
WALL STREET WAVE
New research from Chainalysis suggests institutional investors on Wall Street are increasingly transferring even larger amounts of digital assets. Transfers of above $1 million in North America accounted for 57% of the total value transferred in May 2020, compared to 46% in late 2019.
The volume of the CME bitcoin futures market is at a one-year high, and the assets under management of the Grayscale Bitcoin Trust and Grayscale’s firm as a whole are at an all-time high. Outspoken bitcoin investor and Gemini cofounder Cameron Winklevoss tweeted that not owning bitcoin now is a “worse investment decision” than not investing in Google, Apple
SUPPORT IN WASHINGTON
U.S. congressman Tom Emmer joined bitcoin proponent Anthony Pompliano’s podcast to say he expects bitcoin to get stronger as the world begins to emerge from the coronavirus pandemic. Emmer has a history of advocating for blockchain-powered innovation and cited the OCC’s recent decision authorizing banks to provide cryptocurrency custody as a major step forward.
“There are things happening that are going to disrupt the centralized nature of our society,” Emmer said. “We’re about to blow that whole thing up, because of the pandemic.”
BITCOIN SCAM INVESTIGATIONS
Three people including 17-year-old recent high school graduate Graham Ivan Clark were charged in connection with last month’s Twitter hack that compromised the accounts of dozens of public figures and stole more than $100,000 of bitcoin. The IRS criminal investigations unit de-anonymized the transactions used in the attack, and the Florida teen now faces 30 felony charges.
On the fourth anniversary of another high-profile bitcoin heist, bitcoin exchange Bitfinex is offering up to a $400 million reward to return lost funds that are now worth $1.3 billion. The 120,000 bitcoins were worth about $65 million when they were stolen in August 2016.
TEENS TACKLE DEFI
Three teenagers have used their time in quarantine to launch a new DeFi startup called Rari Capital, billed as “the smartest stable robo-advisor. Two of the founders have already incubated and sold a DeFi app to wallet provider MyCrypto, and their newest venture aims to deploy new lending strategies and allocate assets, capitalizing on the fledgling yield farming craze that has boosted new startups like Compound.
Russia’s revamped crypto law that Vladimir Putin signed on July 31 and goes into effect in January isn’t nearly as harsh as some enthusiasts feared. No goods and services are allowed to be priced in cryptocurrencies under the new law, but they can still be traded. Russian banks and exchanges will be allowed to open cryptocurrency exchanges if they register with its central bank, but the law is still ambiguous about tangential industries like bitcoin mining.
Crypto Venture Fund Raises $110 Million From Universities [Bloomberg]
Square’s Big Bitcoin Haul Is Good for Square but Better for Bitcoin [Barron’s]
India’s Cryptocurrency Industry Prepares For A Billion Users [Cointelegraph]