Hodler’s Digest, September 1-7 – Cointelegraph Magazine

Top 5 Stories of the Week

Cryptocurrency gets ‘extremely scary’ as Arthur Hayes predicts Bitcoin weekend will be ‘under $50k’

Crypto market sentiment has turned to “extreme fear” after Bitcoin briefly fell below $56,000, with BitMEX co-founder Arthur Hayes predicting that Bitcoin could fall another 12% to below $50,000 over the weekend.

The Crypto Fear & Greed Index, which measures market sentiment and trends and assigns a total score of 100 (representing extremely positive sentiment), recorded a score of 22 on September 6, indicating “extreme fear.” This is a 7-point drop from the previous day, when sentiment was pegged at “fear.”

This is the lowest reading and price since the index hit 20 on August 8, and the first time the index has re-entered “extremely scary” levels since it hit 25 on August 12.

According to Cointelegraph Markets Pro, at the time of publication, Bitcoin had fallen 2.7% over the past 24 hours, dropping from above $58,000 to $55,838, wiping out $29.7 billion from its market cap.

It has since recovered slightly from its lows to trade at $56,533.

“BTC is heavy,” Hayes said in a Sept. 6 X post. “Looking for $50k or less this weekend. Shamelessly shorting.”

Pavel Durov Breaks Silence for First Time Since Arrest

Telegram founder Pavel Durov has finally broken his silence following his high-profile arrest in France in August.

In a message broadcast on a public Telegram channel, the tech entrepreneur said he was surprised by the French authorities’ arrest. He said Telegram has an official representative in the European Union who handles all regulatory requests and law enforcement investigations.

Durov, a French citizen, also claimed that French authorities have several ways to contact him without arresting him, and that he regularly visits the French consulate in Dubai.

Telegram’s founder added that the company is prepared to leave jurisdictions that are hostile to Telegram’s mission of free expression.

“We are prepared to walk away from markets that do not align with our principles because we are not in this for the money. We are driven by the desire to bring good and defend people’s fundamental rights, especially where those rights are being violated.”

Binance CEO CZ Banned from Managing and Operating Exchange

Changpeng “CZ” Zhao, who is expected to be released by U.S. prison authorities in the coming weeks, could be permanently banned from operating and managing cryptocurrency exchange Binance as part of a plea deal with prosecutors.

According to an Axios report on September 5, Binance CEO Richard Teng revealed that CZ was banned from operating and managing the exchange for life, not just three years as previously reported by many media outlets.

The cryptocurrency exchange said the former CEO had been removed from his role as company executive, but there appears to be no specific request for this in the plea agreement between Zhao or Binance.

CFTC Charges Uniswap with Illegal Derivatives Trading

The U.S. Commodity Futures Trading Commission (CFTC) has charged decentralized exchange developer Uniswap Labs with illegally offering leveraged cryptocurrency trading to U.S. retail investors, according to an announcement on September 4.

The CFTC said that Uniswap Labs agreed to settle the charges by paying a $175,000 civil penalty and agreeing to cease and desist from violating the Commodity Exchange Act (CEA).

The CFTC’s Enforcement Division will “vigorously enforce the CEA as the digital asset platforms and DeFi ecosystem evolve,” Ian McGinley, the CFTC’s chief enforcement officer, said in a statement. “DeFi operators must be vigilant to ensure that their transactions comply with the law.”

Summer Mersinger, one of the five CFTC commissioners, said in a Sept. 4 statement that she opposed the way the CFTC handled enforcement actions, criticizing the agency for what Mersinger described as “regulation through enforcement.”

“I was hoping the commission would consider rulemaking soon, or at least provide guidance and clarify how DeFi protocols should comply,” Mersinger said. “Unfortunately, today is not that day.”

Former Mt. Gox CEO Launches EllipX Cryptocurrency Exchange in Europe

Mark Karpeles, the former CEO of the defunct cryptocurrency exchange Mt. Gox, is set to launch a new cryptocurrency exchange called EllipX in September.

The Poland-based platform initially serves European users, with plans for global expansion. It will initially launch with cryptocurrencies only, but may add banking and fiat services later.

EllipX aims to comply with the European Union’s crypto market regulations and promote transparency through regular third-party audits.

In a Korea Blockchain Week interview with Cointelegraph, Karpeles explained that the security and technology surrounding Bitcoin now “allows for safe storage of cryptocurrencies,” adding:

“Exchanges, especially exchanges, haven’t changed much over the years. (…) I think the best way to do it is to basically lead by example. To show that connections can be built in a completely transparent way.”

Having restored trust and provided compensation to those affected by the Mt. Gox hack, Karpeles told Cointelegraph that the new exchange will offer former Mt. Gox users a discount of “at least 50%” on trading fees on EllipX.

Winners and Losers

Bitcoin on the weekend (Bitcoin) is in $53,645ether (Ethereum) ~ in $2,212 and Ripple (XRP) ~ in $0.52. Total market capitalization is $1.89 According to CoinMarketCap, it is worth around $1 trillion.

Among the top 100 cryptocurrencies, the top 3 altcoins that have seen the most gains this week are Helium. (HNT) At 10.55%, Starknet (stuck) 9.62% and Bitcoin SV (BSV) 4.09%

The top three altcoin losers this week are Beam. (beam) DOGS at 27.58% (dog) 20.92% and Cosmos (atom) 19.93%. For more information on cryptocurrency prices, read Cointelegraph’s market analysis.

Most memorable quotes

“One way to think about prediction markets is as building blocks for other mechanisms to be built faster. (…) You take existing mechanisms and build something much faster that gives them incentives to do as good a job as possible.”

Vitalik ButerinCo-founder of Ethereum

“We will see the emergence of a pro-crypto Congress, regardless of the specific outcome in individual races and of course the outcome of the presidential election.”

Paul GruwellCoinbase’s Chief Legal Officer

“Active address counts have plummeted since the ETF launched in January. What we’re seeing now may be a slow decline in the relevance of wallet address movement data.”

Fab HundalSenior Market Analyst at Swyftx

“My guess is if rates cut this month we’ll see a 15-20% drop, and a BTC floor of $40-50k.”

Bitfinex Analyst

“The term ‘cryptocurrency asset security’ is not found in any statute. It is a fabricated term with no legal basis. The SEC should stop trying to fool judges by using this term.”

Stuart AlderottiRipple’s Chief Legal Officer

“BTC Giant Inverse Head and Shoulders Pattern. If this breaks, Bitcoin will hit $100k. My timeline is ATH in Q4 2025, $100k in Q1.”

Elsa BoomCrypto Analyst

Forecast for this week

BTC Price Rise, US Job Losses, Bitcoin Could Retest $49,500 Amid Warnings

Bitcoin hit $57,000 at Wall Street’s opening on September 5, while U.S. stocks rose following the release of macroeconomic data.

Data from Cointelegraph Markets Pro and TradingView showed BTC price action briefly reversing the decline that began after the previous daily close. BTC/USD fell 2.3% on the day, taking some relief from the rebound in U.S. stocks as macro indicators reinforced the impending rate cut.

Among the data released, there was a notable shortfall in private-sector payrolls, which rose by 99,000 from the expected 144,000.

“This is the smallest gain since 2021,” trading resource The Kobeissi Letter wrote as part of its response to X.

“What’s happening in the labor market?”

The market continues to accept the possibility that the Federal Reserve will make a much deeper rate cut at its next meeting on September 18, according to the latest estimates from CME Group’s FedWatch tool.

Additional jobs data released on September 4 showed a similar picture, with the Job Openings and Labor Force Separation Survey showing job openings fell to 7.67 million, rather than the expected 8.1 million.

FUD of the week

US prosecutors link former FTX executive to China bribery scandal

In their case against Ryan Salameh, U.S. prosecutors allege that the former co-CEO of FTX Digital Markets linked him to the name of a Thai prostitute as part of an effort to delist accounts linked to FTX and Alameda Research.

In a paper filed in the Southern District of New York on September 5, U.S. attorneys filed a memorandum opposing Salameh’s motion to dismiss his guilty plea as part of the campaign finance violations. The former FTX co-CEO had already withdrawn his motion to dismiss on August 29, but Judge Lewis Kaplan said the two sides would appear on September 12 to address the issue at a hearing.

The prosecution’s motion was blunt, calling Salameh’s petition “blatant and self-serving,” “procedurally flawed, and factually and legally without merit.” He initially filed the petition after authorities suggested they would pursue an investigation into his partner, Michelle Bond.

Over 600 Bitcoin ATMs have gone offline worldwide in just two months.

In the first two months of Q3 2024, more than 600 Bitcoin ATMs went offline worldwide, with the United States recording the most closures. This comes at a time when law enforcement agencies are actively seeking out and shutting down Bitcoin ATMs, which are often involved in extortion and fraud.

According to data from Coin ATM Radar, the global Bitcoin ATM network lost 435 and 182 machines in July and August, respectively.

On August 7, the Chico, California, County Council discussed regulating Bitcoin ATMs. Butte County Chief Executive Andy Pickett spoke about the initiative to regulate these ATMs, suggesting they should be treated “like banks.”

Federal Reserve Strikes Texas Bank with Order to Halt and Cease Crypto Firm Services

The U.S. Federal Reserve has issued a cease and desist order against crypto-friendly United Texas Bank, citing “serious deficiencies” in the bank’s risk management systems and dealings with cryptocurrency customers.

In a Sept. 4 cease-and-desist order, the Fed said it investigated United Texas Bank in May and found problems with corporate governance and the “oversight” of the bank’s board and senior management.

“Our examination identified significant deficiencies with respect to foreign correspondent banks and their virtual currency customers, particularly with respect to risk management and compliance with applicable laws, rules, and regulations, including the Bank Secrecy Act, to prevent money laundering,” the Fed wrote in its order.

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Editorial staff

Cointelegraph Magazine staff and reporters contributed to this article.