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Core Scientific sold $167M worth of Bitcoin holdings in June

The sale left the firm with ​​1,959 BTC at the end of the second quarter, a more than 75% drop when compared with its reported 8,058 BTC holdings as of May 31.

United States-based cryptocurrency mining firm Core Scientific sold more than 7,000 Bitcoin in June to pay for servers, increase its data capacity, and settle debts.

In a Tuesday announcement, Core Scientific said it had sold roughly $167 million worth of Bitcoin (BTC) in June at an average price of $23,000 — 7,202 BTC. The sale left the firm with ​​1,959 BTC — roughly 21% of its holdings — and $132 million in cash as of June 30, a more than 75% drop when compared with its reported 8,058 BTC holdings as of May 31.

According to the firm, it used proceeds from the crypto sale to pay for ASIC servers, schedule debt repayments, and invest in additional data center capacity. The company reported it had produced 1,106 BTC in June, with self-mining accounting for 57% of its data center capacity and crypto mining operations as of June 30 — more than 180,000 servers.

“Our industry is enduring tremendous stress as capital markets have weakened, interest rates are rising and the economy deals with historic inflation,” said CEO Mike Levitt. “Our company has successfully endured downturns in the past, and we are confident in our ability to navigate the current market turmoil.”

Amid a market downturn and extreme price volatility in cryptocurrencies, many crypto miners have reportedly sold their self-mined coins and in some cases liquidated holdings. In June, Canadian crypto mining firm Bitfarms sold 3,000 BTC — roughly 47% of its holdings at the time — for $62 million as part of a strategy to improve liquidity and pay debts.

Related: Bitcoin miner Mawson to defer all major capital expenditures until market conditions normalize

Levitt said Core Scientific aimed to expand its capacity to 30 exahashes/second by the end of 2022 while “taking advantage of distressed opportunities that may arise.” The company plans to release its earnings report from Q2 2022 on Aug. 11.

High-ranking crime fighter to join UK’s FCA as payments and digital assets director

The Financial Conduct Authority is introducing the post of digital assets director as part of a hiring spree that goes along with its new, more assertive strategy.

UK regulator the Financial Conduct Authority (FCA) has recruited almost 500 additional staff members this year as part of its new three-year strategy. Among the new hires are six directors, whose appointments were announced July 5. Two of them come from backgrounds in policing.

Director of payments and digital assets is newly created position that will oversee the e-money, payment and crypto-asset markets and related policy development. Matthew Long was appointed to that post, moving over from the National Crime Agency, where he is now a director in the National Economic Crime Command. Long has also led the UK Financial Intelligence Unit. He began his career as a detective in the Kent Police and holds a PhD in risk management. Long will start in his new role in October.

In September, Karen Baxter will support FCA enforcement and market oversight activities when she joins the FCA as director of strategy, policy, international and intelligence. She was a commander and national coordinator for economic crime in the City of London Police. She is also is an Office of Communications board member for Northern Ireland.

Two interim directors will receive permanent appointments, and new directors of consumer finance and wholesale buy-side have also been appointed.

Related: Former Chancellor says UK is falling behind on crypto opportunity

The agency’s new strategy seeks to be more innovative, assertive and adaptive, and to:

“proactively shape the digitalization of financial services through developing our regulatory approaches to digital markets.”

On digital markets, the strategy addressed competition among key digital firms and the risks and benefits Big Tech will bring to the sector. It will examine the role of artificial intelligence in finance and will lead investigations “informed by behavioural economics to test digital consumer journeys.”

Bitcoin price swings 7.5% during intraday trading as US recession concerns mount

BTC bounces back to reclaim support at $20,400 after hitting a daily low of $19,309 on July 5, as bulls battle bears for control of the market.

The cryptocurrency market along with the tech-heavy Nasdaq saw a bit of positive price action on July 5 amid a backdrop of rising recession concerns in the United States. 

Data from Cointelegraph Markets Pro and TradingView shows that an early morning onslaught by bears managed to drop Bitcoin (BTC) to a daily low of $19,309 before reinforcements arrived to bid the price back above support at $20,400 during the afternoon.

BTC/USDT 1-day chart. Source: TradingView

Here’s what several analysts are saying comes next for the top cryptocurrency and what support and resistance levels to keep an eye on moving forward.

Looking for a continuation to $23K

A bullish take on the recent Bitcoin price action was offered by independent analyst Michael van de Poppe, who posted the following chart as a follow-up to a previous Tweet that suggested Bitcoin needed to crack the resistance zone at $19,700 to continue higher:

BTC/USD 15-minute chart. Source: Twitter

The analyst said:

“This one did crack the resistance and ran towards the next area of resistance at $20.3K. I'm expecting #Bitcoin to consolidate for a bit here, but breaking the next resistance zone is a trigger for continuation towards $23K and a summer relief rally.”

Possible pullback to $15,800

A decidedly less optimistic take on the recent price action was provided by crypto analyst and pseudonymous Twitter user il Capo of Crypto, who posted the following chart highlighting several “fake pumps” that resulted in lower highs:

BTC/USD 4-hour chart. Source: Twitter

Il Capo of Crypto said:

“Lower highs all the time. Pumps have low volume and they look corrective. Main target remains $15,800-16,200.”

Related: Bitcoin faces fresh pressure as US dollar crushes gold, risk assets

Double bottom on the BTC chart

A final bit of hopium was offered by crypto trader and pseudonymous Twitter user Captain Faibik, who posted the following chart and highlighted the importance of a daily close above $20,000:

BTC/USD 1-day chart. Source: Twitter

Captain Faibik said:

“Double Bottom & Bullish Divergence Both in Play… If Bulls Reclaimed the $21.6K Resistance, Expecting +30-40% Relief RALLY.”

For those looking for more reassurance that the market may be nearing its bottom for the current bear cycle, pseudonymous Twitter user Bitcoin Archive posted the following chart of Bitcoin’s MRVR Z-score, which has been a reliable indicator of past market bottoms:

Bitcoin MVRV Z-score. Source: Twitter

Bitcoin Archive explained:

“#Bitcoin is now deep into the "green zone" - which has signaled market bottoms on 4 occasions.”

The overall cryptocurrency market cap now stands at $911 billion and Bitcoin’s dominance rate is 42.7%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin exchange outflows surge as ‘not your keys, not your crypto’ comes back into fashion

June saw the worst monthly performance for Bitcoin since 2011, but several metrics indicate that its underlying support base continues to grow stronger.

Bear markets in cryptocurrency are known to be painful, but the month of June was especially trying for the crypto faithful as a confluence of factors resulted in the price of Bitcoin (BTC) falling 37.9%, its worst monthly performance since 2011.

Bitcoin monthly performance. Source: Glassnode.

As a result of the continued widespread weakness, a majority of the so-called Bitcoin “tourists” have now exited the space, leaving only the most dedicated holders remaining, according to blockchain analytics firm Glassnode.

Despite Bitcoin's ongoing struggles and the fact that crypto traders are currently experiencing the worst bear market in the sector's history, several metrics suggest that the outlook isn’t as dire as some are predicting and that the hodler base of the crypto market remains strong.

Dedicated hodlers increase in number

A significant purge of active Bitcoin wallets is a common occurrence during major sell-off events as well as in early bear markets, according to Glassnode. However, the severity of the exodus has been diminishing since the bear market of 2018, indicating that “there is an increasing level of resolve amongst the average Bitcoin participant,” Glassnode said.

During the most recent reduction in the number of addresses with a non-zero balance, only 1% of the Bitcoin addresses purged their holdings entirely as compared to 2.8% between April and May 2021, and the whopping 24% that did the same between January to March of 2018.

Number of Bitcoin addresses with a non-zero balance. Source: Glassnode

While on-chain activity for Bitcoin remains muted and solidly in bear-market territory, the most dedicated Bitcoin holders continue to hold the line, and will likely continue to do so until the market turmoil subsides and a floor in the BTC price is established.

A return to best Bitcoin practices

The ethos of “not your keys, not your crypto” is once again gaining traction in the crypto community as traders have been withdrawing their tokens from exchanges at a frantic pace. The collapse of the Terra ecosystem, potential insolvency of Celsius and the implosion of Three Arrows Capital have all served as a stark reminder that crypto is intended to be stored in cold storage. 

Bitcoin exchange net position change. Source: Glassnode

Since March 2020, the number of Bitcoin held on exchanges has declined from 3.15 million to 2.4 million. That's a total outflow of 750,00 BTC with 142,500 of that total occurring in the past three months.

With platforms like Celsius halting withdrawals and smaller exchanges beginning to put limits on the amount that users can remove, the desire to regain personal control of crypto assets has become a top concern for holders.

This can actually be seen as a positive for prices in the long-term as the likelihood of further capitulation decreases when tokens are locked in cold storage and not readily available to sell on exchanges.

Related: With the bear market in full throttle, crypto derivatives retain their popularity

Retail starts to gain interest

Another encouraging development amid the worst month in Bitcoin history is an increasing interest from wallets holding less than 1 BTC, which are more likely to represent the retail cohort of the crypto market.

These so-called “shrimp” wallets have been eagerly scooping up low-priced Bitcoin to the tune of 60,460 BTC per month according to Glassnode, which is “the most aggressive rate in history.”

Bitcoin shrimp wallet net position change. Source: Glassnode

Even with crypto in a bear market, several underlying metrics, including a dedicated cohort of crypto hodlers and rising interest from smaller retail buyers. suggest that calls for the death of Bitcoin are once again premature.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Italian government will provide $46 million in subsidies for blockchain projects

All companies developing IoT, AI or blockchain technology will be eligible to apply for government subsidies provided the funds will be used in specific sectors, such as health.

The Ministry of Economic Development of Italy has announced that certain blockchain projects will qualify to apply for up to $46 million in government subsidies starting from September.

In a Tuesday announcement, the Ministry said companies and public or private research firms will be able to apply for funding from the government for the development of projects related to artificial intelligence, the Internet of Things and blockchain technology. The fund will have an initial budget of 45 million euros — roughly $46 million at the time of publication — for expenses and costs from 500 thousand (worth $512,150) to 2 million euros ($2,048,600) as part of the Italian government’s goals for investments in technology, research and innovation.

“We support companies' investments in cutting-edge technologies with the aim of encouraging the modernization of production systems through management models that are increasingly interconnected, efficient, secure and fast,” said Minister of Economic Development Giancarlo Giorgetti. “The goal of competitiveness requires the manufacturing industry to constantly innovate and use the potential of new technologies.”

The government directive was made possible by a decree in December 2021 establishing criteria for using the fund and a subsequent one in June 2022 in which the Ministry set the terms and conditions for submitting applications. According to the decree, companies of any size will be eligible to apply for subsidies provided the funds will be used for IoT, AI or blockchain in sectors including industry and manufacturing, tourism, health, the environment and aerospace.

Related: ‘Bitcoin-thematic’ ETF lists on Italian stock exchange Borsa Italiana

A member of the European Union, Italy would likely be affected by recent regulations agreed upon by the EU Parliament aiming to bring crypto issuers and service providers within its jurisdictional control under a single regulatory framework. The country’s securities regulator, the Italian Companies and Exchange Commission, or CONSOB, has previously warned residents about the possible risks of crypto investments, while the Organismo Agenti e Mediatori is largely responsible for granting regulatory approval for crypto service providers — in May, the regulator gave the green light to major crypto exchange Binance to open a branch in Italy.

eToro to terminate $10B SPAC merger in mutual agreement with acquisition firm

The firm is reportedly seeking a new funding round that would infuse with more cash at a 50% lower valuation than one year ago.

On Tuesday, special purpose acquisition company (SPAC) FinTech Acquisition Corp. V announced that it terminated its purposed takeover of Israeli cryptocurrency exchange eToro via a bilateral agreement. In explaining the decision, Fintech V chairman of FinTech V Betsy Cohen said: 

"eToro continues to be the leading global social investment platform, with a proven track record of growth and strong momentum. Although we are disappointed that the transaction has been rendered impracticable due to circumstances outside of either party's control, we wish [CEO] Yoni and his talented team continued success."

Last year, eToro and Fintech V announced the SPAC takeover valuing the former at $10 billion. However, it appears that eToro has run into difficulties, possibly due to the ongoing cryptocurrency bear market, and is in need of a capital infusion to enhance its operations. eToro is reportedly considering a private funding round of $800 million to $1 billion, valuing the firm at $5 billion. 

Related: 6 Questions for Yoni Assia of eToro - Cointelegraph Magazine

In comparison, Fintech V, which is traded on the Nasdaq exchange and whose sole purpose is to merge with a private company so the latter can "receive" public listing status, has about $250 million in cash held in trust. Nevertheless, Yoni Assia, co-founder and CEO of Toro, assured the public about the state of eToro's underlying business:

"Our balance sheet is strong and will continue to balance future growth with profitability. We ended Q2 2022 with approximately 2.7 million funded accounts, an increase of over 12% versus the end of 2021, demonstrating continued customer acquisition and retention rates that have been improving over time." 

US Commerce Dept. asks digital asset industry for input on competitiveness framework

The federal agency received eight responses to a request for comment on a document mandated by U.S. President Joe Biden’s March 9 executive order on digital assets.

Among the numerous reports and other written material mandated in United States President Joe Biden’s March 9 executive order “Ensuring Responsible Development of Digital Assets” is a framework for enhancing United States economic competitiveness in digital asset technologies, due from the Commerce Department on September 5. In preparation for that document, the Commerce Department requested public comments through July 5, providing 17 questions to encourage discussion.

As of midday on July 5, eight comments had been received by the Commerce Department. They ranged from a few paragraphs to pages of detailed analysis. Mastercard’s 16-page response was the longest.

Mastercard said in its response that the United States was in a particularly strong position as both a financial services and technological innovation hub. It urges several steps be taken to preserve those advantages. Lack of regulatory clarity is a significant obstacle business and innovation, Mastercard wrote, adding:

“Mastercard therefore supports the view that the U.S. administration should consider leadership in the regulation of digital assets as a key enabler of the overall competitiveness of American firms in this sector.”

In addition, Mastercard said countries are creating burdensome requirements for businesses in the sector and recommended that “an approach to the treatment of digital trade” be included in U.S. international trade agreements.

Related: Mastercard to allow 2.9B cardholders to make direct NFT purchases

Tech trade group Chamber of Progress urged regulatory clarity and workforce development to preserve the U.S.’s leading position. The Proof of Stake Alliance touted the advantages of proof-of-stake technologies as “the future of digital asset innovation” in carefully argued responses to four of the department’s discussion questions.

A visiting senior research fellow at George Mason University Mercatus Center argued at length for relief from “the heavy regulatory burden that US digital asset businesses bear” and the need for the development of privacy protections.

The American Bankers Association favored regulatory clarity as well, while criticizing the Securities and Exchange Commission’s Staff Accounting Bulletin 121 for inhibiting competitiveness. It praised existing U.S. payment systems and called the benefits of a U.S. CBDC “uncertain and unlikely to be realized.” Independent Community Bankers of America said digital assets “present numerous significant threats, including financial crimes and risks for financial stability” and openly opposed a U.S. CBDC.

The executive order on digital asset development called for over a dozen written responses. The first of those was published by the Justice Department in June. The Commerce Department framework is one of five documents expected to be released September 7.

With the bear market in full throttle, crypto derivatives retain their popularity

"Derivatives provide opportunities to protect their portfolios during times of heightened market volatility," says Emerson Li, brand lead at BingX.

The 2022 cryptocurrency bear market has been the worst on record as most Bitcoin traders are underwater and continue to sell at a loss. In response to the rapid decline of token prices, some investors have fled to safe-haven assets; some have exited the market completely and others have perplexingly turned to the enigmatic market of crypto derivatives. 

With regards to this, Cointelegraph spoke to BingX's brand lead Emerson Li. BingX is a Singaporean social-based cryptocurrency exchange known for its leaderboards where users can compete with others for returns on investments as well as share ideas among their followers. The exchange processed around $319 million in trading volume within the past 24 hours, mainly consisting of derivates. Regarding the recent market downturn, here's what Li had to say:

"BingX's users are also proliferating; compared with Q1 2022, Users number increased by 70% in the second quarter, and transaction volumes doubling since this round of slumps. We believe that its demand for derivatives is still increasing because it allows users to profit from falling prices, a feature that other products do not have."

During bear markets, traders can purchase derivatives known as put options to either hedge their positions or speculate that the value of underlying tokens will fall. While this can be done by simply shorting the coin, violent and periodic bear market rallies can lead to theoretically infinite losses on one's short position. In addition, a lack of liquidity for borrowing coins to short may lead to exchanges charging high-interest rates on one's positions. On the other hand, the put buyer's losses are theoretically limited to the premium they paid for the derivative, and there are no additional interest fees. 

Li went on to explain that BingX is also seeing a sharp increase in deposits as of late. "Since high market volatility is suitable for the derivatives market, we see more users participating in such transactions and stimulating more demand for deposits."

Money also appears to be flowing back to CeFi products from DeFi protocols. "For high-risk products such as DeFi staking, we believe traders have panicked under the recent market, affected by the Terra (LUNA) — since renamed Terra Classic (LUNC) — affair and the problems with many DeFi protocols. Users' risk appetite has decreased, and demand has declined," said Li. 

Indeed, dYdX, a decentralized crypto exchange known for its margin and perpetual contract products, saw its weekly trading volume fall approximately 90% from the $12.5 billion witnessed from Oct 24 to Oct 30 last year. However, the trading volume is still several magnitudes higher than one year ago, partly due to the aforementioned risk-hedging tailwind. 

Risk-wise, it would appear that the worst is over as a spike in liquidations on dYdX, mainly in the Ethereum and Bitcoin markets, has dissipated since mid-June. Experts from Glassnode noted tokens held in wallet addresses by both new investors and crypto whales had been increasing meaningfully amid the sell-off. 

Crypto market volatility shows need for ‘enhanced regulatory and law enforcement frameworks’ — BoE

The central bank said the growth of the crypto market did not pose an “immediate threat” to the United Kingdom’s financial system, but had the potential to do so in the future.

The Bank of England has called for “enhanced” regulations of crypto to address potential risk to the country’s financial stability amid the market capitalization dropping more than $2 billion.

In the BoE’s Financial Policy Committee "Financial Stability Report — July 2022," the central bank said factors including the growth of the crypto market and climate change did not pose an “immediate threat” to the United Kingdom’s financial system but had the potential to do so in the future. The committee noted that recent events in the space including extreme price volatility among cryptocurrencies, "liquidity mismatches,” weakening investor confidence in stablecoins and “leveraged positions being unwound” could threaten financial stability if left unchecked.

“Unless addressed, systemic risks would emerge if cryptoasset activity, and its interconnectedness with the wider financial system, continued to develop,” said the BoE report. “This underscores the need for enhanced regulatory and law enforcement frameworks to address developments in these markets and activities.”

According to the report, a “number of vulnerabilities” within the crypto space were similar to those that had previously been a part of instances of instability in traditional finance, leading to the market capitalization dropping from roughly $3 trillion in 2021 to less than $900 billion at the time of publication. Since its last report in December 2021, the committee said it had supported the Financial Stability Board coordinating its approach to “unbacked crypto-assets” with international authorities and accepted authorities considering crypto as a possible means for Russia to evade sanctions.

In a Tuesday press conference on the committee’s report, BoE governor Andrew Bailey reiterated that recent market forces had not changed his views on “unbacked” crypto not posing an imminent threat to the financial system. The central bank’s deputy governor for financial stability Jon Cunliffe added the recent price drop of cryptocurrencies including Bitcoin (BTC) and Ether (ETH) hadn’t had a noticeable impact on the country’s financial system, suggesting the crypto market isn’t at a size to significantly affect traditional ones.

“Technology doesn’t change the laws of economics and finance and risks,” said Cunliffe. “If an asset is speculative and has no intrinsic value — it’s only worth what somebody pays for it — it can go down very quickly when confidence is lost [...] If people lose confidence in that because they don’t see how it’s going to maintain its value — think Terra, think Luna — then you’ll see stress across the system.”

The deputy governor added:

“We need now to bring in the regulatory system that will manage those risks in the crypto world in the same way that we manage them in the conventional world.”

Related: Bank of England and regulators assess crypto regulation in raft of new reports

Across the pond, United States Treasury Secretary Janet Yellen seemed to agree with BoE’s conclusions. Following TerraUSD (UST) depegging from the U.S. dollar in May and Tether (USDT) briefly dipping below $1, Yellen said the stablecoin market was not at the scale at which a price drop would present a threat to the country’s financial stability, but still presented risks similar to bank runs.

Bitcoin faces fresh pressure as US dollar crushes gold, risk assets

BTC/USD falls $1,000 while spot gold gives up 2% as USD strength intensifies, beating the year's previous peaks.

Bitcoin (BTC) hit daily lows on the July 5 Wall Street open as the U.S. dollar saw a violent surge higher. 

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

USD sets yet another 20-year record

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD retreating to $19,281 on Bitstamp as the Independence Day long weekend concluded with a bump.

The pair had seen last-minute gains the day prior, these fizzling as the return of Wall Street trading was accompanied by USD strength laying waste to gains across risk assets and safe havens.

Bitcoin traded down $1,000 on the day, while spot gold shed over 2% and U.S. equities markets also fell. The S&P 500 was down 2.2% at the time of writing, while the Nasdaq Composite Index lost 1.7%.

XAU/USD 1-hour candle chart. Source: TradingView

The U.S. dollar index (DXY), on the contrary, hit 106.59, a level not seen since December 2002 and above previous breakouts from Q2 this year.

Bitcoin analysts thus waited for signs of a trend reversal to provide some relief to crypto markets.

"Euro hitting record levels, $1.033 at this point. Last seen in the years 2002-2003 and $DXY, of course, shooting up like a rocket," Cointelegraph contributor Michaël van de Poppe commented, noting that the euro was heading towards USD parity.

In additional commentary, Caleb Franzen, senior market analyst at Cubic Analytics, pointed to how the DXY shed light on investor sentiment over the health of the economy.

"Over the past week, yields are falling but the dollar keeps rising. This dynamic proves that investors are rushing to safety, with heightened fears of recession," part of a tweet read.

The U.S. dollar index (DXY) 1-month candle chart. Source: TradingView

Crypto Fear & Greed Index hits 2-month high

While volatility edged back into crypto markets, sentiment was yet to reflect the impact of a rampant dollar.

Related: ‘Wild ride’ lower for BTC? 5 things to know in Bitcoin this week

The Crypto Fear & Greed Index stood at 19/100 on the day, still indicative of "extreme fear" but nonetheless its highest reading since before the Terra LUNA debacle in May.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

As Cointelegraph additionally reported, investment manager ARK Invest revealed that it was still "neutral to positive" on BTC under current circumstances.

Analyzing Bitcoin futures market sentiment, meanwhile, Edris, a contributor to on-chain analytics platform CryptoQuant, voiced caution about making conclusions over any form of recovery.

The taker buy/ sell ratio, which indicates whether buyers or sellers are in control, saw some relief on the day, Edris showed, but the move should be taken with a pinch of salt.

"However, note that it could just be a consolidation or a bullish pullback before another continuation lower," a blog post read.

"So, many other factors should be considered closely in the coming weeks in order to determine if a bullish reversal or another bull trap could be expected."
Bitcoin taker buy/ sell ratio annotated chart. Source: Edris/ Twitter

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.