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Bitcoin Runes Protocol Faces Challenges Amid Decreasing Traction

Bitcoin Runes Protocol, which garnered significant attention during its initial launch, is now encountering challenges as its traction appears to be waning. The protocol, which was once hyped for its innovative features, is now facing criticism and skepticism within the cryptocurrency community.

One of the main issues plaguing the Bitcoin Runes Protocol is its inability to sustain the momentum generated during its introduction. Despite the initial excitement surrounding the protocol’s unique approach, user adoption has failed to meet expectations, leading to concerns about its long-term viability.

Moreover, critics have pointed out various flaws and limitations in the protocol’s design, further dampening enthusiasm among potential users and investors. These criticisms range from technical issues to concerns about the protocol’s governance structure and decentralization.

Additionally, competition from other blockchain projects offering similar functionalities has intensified, putting further pressure on the Bitcoin Runes Protocol to differentiate itself and attract users. As a result, the protocol is struggling to maintain relevance in an increasingly crowded and competitive market.

Despite these challenges, proponents of the Bitcoin Runes Protocol remain optimistic about its potential to address key issues in the cryptocurrency space. They believe that with strategic adjustments and improvements, the protocol can regain momentum and establish itself as a leading player in the industry.

However, addressing the protocol’s shortcomings will require concerted efforts from its development team and community members. Transparency, accountability and a commitment to user feedback will be essential in rebuilding trust and confidence in the protocol’s capabilities.

In conclusion, the Bitcoin Runes Protocol’s journey reflects the highs and lows inherent in the cryptocurrency industry. While its initial hype generated excitement, the protocol is now grappling with the realities of user adoption and competition. Moving forward, the protocol must address its challenges head-on to regain traction and fulfill its potential as a transformative force in the blockchain space.

SOURCE: Bitcoin Runes Protocol Sees Traction Waning After Much-Hyped Introduction

Stolen Ether from Poloniex Exchange Remains Unrecovered

Over half of the $100 million worth of Ether (ETH) linked to the infamous Poloniex hack from November 2023 has been siphoned via the privacy protocol Tornado Cash, according to recent reports.

On November 10, 2023, crypto exchange Poloniex experienced massive unauthorized outflows from its wallets. Subsequent investigations confirmed the loss of over $100 million worth of ETH due to a hack. Despite Poloniex identifying the hacker weeks later and offering a $10 million bounty, the stolen funds were never recovered. Blockchain security firm CertiK attributed the incident to a “private key compromise.” In response, Poloniex temporarily disabled the compromised wallet.

Six months later, it became evident that the hacker had no intention of returning the stolen funds. Blockchain investigation firm PeckShield discovered that more than half of the stolen Ether was transferred through Tornado Cash, a protocol used to anonymize assets. The hacker moved over 17,800 ETH from six different wallets into a single Tornado Cash address. At the time of transfer, the tokens were worth approximately $53.3 million.

Despite the significant setback, Poloniex resumed operations shortly after the incident, allowing investors to deposit and withdraw crypto. The exchange also appointed a “top-tier security auditing firm” to enhance the security of funds on Poloniex and prevent future hacks. At the time, Poloniex stated, “Currently, they are in the final stages of the security audit and verification processes for Poloniex. Upon completion of the audit, we will promptly resume deposit and withdrawal services on our platform.”

Poloniex owner Justin Sun, who acquired the exchange in 2019, promised to fully reimburse users affected by the breach. Sun assured that Poloniex “maintains a healthy financial position” and is seeking collaborations with other exchanges to recover the lost funds.

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Metaplanet Boosts Bitcoin Amid Japan’s Mounting Debt Crisis

Metaplanet, a prominent financial institution, has taken a bold step by designating Bitcoin as a reserve asset amid Japan’s escalating debt crisis. This decision comes amidst growing concerns over Japan’s towering debt mountain, which has reached alarming levels in recent years.

Japan’s debt predicament stems from a combination of factors, including extensive government spending, economic stagnation, and an aging population. As the nation grapples with these challenges, there are fears that its debt burden could have far-reaching consequences for its economy and financial stability.

By embracing Bitcoin as a reserve asset, Metaplanet aims to diversify its holdings and hedge against the risks associated with traditional fiat currencies. Bitcoin, known for its decentralized nature and limited supply, offers a potential safeguard against inflation and currency devaluation, which are pressing concerns in the current economic climate.

Metaplanet’s decision to incorporate Bitcoin into its reserve holdings underscores the increasing recognition of cryptocurrencies as legitimate assets within the global financial landscape. As institutional adoption of Bitcoin continues to grow, its role as a store of value and hedge against economic uncertainty becomes more pronounced.

Moreover, Japan’s debt crisis serves as a stark reminder of the need for innovative solutions to address structural economic challenges. The incorporation of Bitcoin into traditional financial institutions’ portfolios represents a paradigm shift in how assets are managed and allocated in response to evolving market dynamics.

While Bitcoin’s designation as a reserve asset by Metaplanet signals confidence in its long-term viability, it also raises questions about the future of traditional financial systems and the role of cryptocurrencies in reshaping them. As Japan grapples with its debt woes, Metaplanet’s move may serve as a catalyst for further adoption of digital assets by institutions seeking alternative stores of value.

Metaplanet’s decision to designate Bitcoin as a reserve asset amid Japan’s mounting debt crisis underscores the growing recognition of cryptocurrencies as viable financial instruments. As the world navigates through economic uncertainties, institutions are increasingly turning to Bitcoin and other digital assets as a means of diversification and risk mitigation.

SOURCE: Metaplanet Makes Bitcoin a Reserve Asset as Japan’s Debt Mountain Grows

Chinese Workers Increasingly Cashing Out Digital Yuan

Workers in China participating in the pilot program for the country’s Central Bank Digital Currency (CBDC) are choosing to immediately convert their digital yuan into physical cash. This trend highlights growing hesitations about the practicality and desirability of the state-backed digital currency.

A recent report from the South China Morning Post reveals that despite China’s transition towards becoming a “functionally cashless” society, the uptake of the digital yuan, or “e-CNY,” has faced significant resistance. Many state employees, who are among the early recipients of their salaries in e-CNY, are opting to cash out their digital earnings right away. Sammy Lin, an account manager at a state bank in Suzhou, explained, “I prefer not to keep the money in the e-CNY app because there’s no interest if I leave it there,” highlighting a lack of financial incentives to retain earnings in digital form. He added, “There are also not so many places, online or offline, where I can use the e-yuan.”

The sentiment is echoed by civil servant Andrew Wang, whose wife, also a recipient of her full salary in e-CNY, converts all her digital currency to cash due to its limited usability. “She can’t deposit the money or buy financial products with the e-CNY wallet,” Wang noted, emphasizing the restrictions that come with the digital currency.

Despite the challenges, more than $250 billion in transactions have been conducted with the digital yuan, as per a statement by Yi Gang, former governor of the People’s Bank of China. However, concerns about privacy and surveillance persist. Ye Dongyan from Beijing’s Cheung Kong Graduate School of Business stresses the need for a better balance between privacy and security to foster wider acceptance of the digital yuan.

These concerns are compounded by the digital yuan’s “controllable anonymity,” which ensures privacy for smaller transactions but not for larger ones, potentially contributing to the hesitation among users to fully embrace the digital currency.

SOURCE: Chinese workers paid in CBDC are cashing it out for real money: Report

FTX Creditors to Receive 118% of Funds Back in Cash, Estate Reveals

In a recent development, the estate handling the aftermath of the FTX collapse has announced a new plan that could see almost all creditors receiving 118% of their funds back in cash. This revelation comes as a significant relief to many affected by the collapse of the popular crypto exchange.

According to the estate, this new plan aims to provide swift and equitable restitution to creditors, ensuring that they are compensated for their losses as fairly as possible. The decision to offer creditors more than their initial investments reflects the estate’s commitment to prioritizing the interests of those affected by the collapse.

The announcement comes after months of uncertainty and speculation surrounding the fate of FTX creditors’ funds. The collapse of the exchange had left many investors worried about the prospect of losing their investments entirely. However, this new plan offers a glimmer of hope for those seeking to recover their losses.

Under the proposed plan, creditors will have the option to receive their funds in cash, allowing them to access their money quickly and easily. This is expected to provide much-needed relief to individuals and businesses who may have been struggling financially as a result of the collapse.

Additionally, the plan underscores the importance of transparency and accountability in the cryptocurrency industry. By providing regular updates and clear communication, the estate has been able to instill confidence in creditors and stakeholders, demonstrating its commitment to resolving the situation in a fair and timely manner.

Overall, the announcement of the new plan represents a positive step forward in the aftermath of the FTX collapse. While challenges may still lie ahead, creditors can take comfort in the fact that efforts are being made to address their concerns and ensure that they receive the restitution they deserve. As the process unfolds, stakeholders will continue to monitor developments closely, hopeful for a favorable outcome.

SOURCE: Nearly All FTX Creditors Will Get 118% of Their Funds Back in Cash, Estate Says in New Plan

Vitalik Buterin’s Proposal Aims to Enhance Ethereum’s Account Abstraction

Ethereum, the pioneering blockchain platform, might soon undergo a significant upgrade, thanks to a proposal put forward by Vitalik Buterin, one of its co-founders. Buterin’s proposal, known as EIP-7702, targets the refinement of “account abstraction” on Ethereum.

Account abstraction is a critical aspect of Ethereum’s architecture, defining how user accounts interact with the blockchain. Buterin’s proposal seeks to improve this interaction by making it more flexible and efficient. With EIP-7702, users could execute transactions and interact with smart contracts using a broader range of cryptographic keys, enhancing security and usability.

The proposed changes could pave the way for more diverse and advanced applications to be built on Ethereum. By enabling greater flexibility in account management, developers could create innovative decentralized finance (DeFi) protocols, non-fungible token (NFT) marketplaces, and other decentralized applications (dApps) with enhanced functionality and security.

Buterin’s proposal has garnered attention and sparked discussions within the Ethereum community. Developers, researchers, and enthusiasts are evaluating the potential implications of EIP-7702 and providing feedback to refine the proposal further.

If adopted, EIP-7702 could usher in a new era of innovation and growth for Ethereum. By enhancing account abstraction, Ethereum would become more adaptable to the evolving needs of its users and developers, positioning itself as a leading platform for decentralized applications.

Overall, Buterin’s proposal reflects Ethereum’s commitment to continuous improvement and innovation. As the blockchain ecosystem evolves, initiatives like EIP-7702 play a vital role in ensuring Ethereum remains at the forefront of blockchain technology, driving progress and empowering users worldwide.

SOURCE: Vitalik Buterin proposes EIP-7702 aiming to refine account abstraction on Ethereum

Grayscale Bitcoin Trust Sees Inflow Again After Months of Outflows

Grayscale’s Bitcoin Trust (GBTC) has seen an influx of capital for two consecutive days, marking an end to the prolonged four-month period of significant outflows. Prior to this reversal, the crypto asset manager experienced daily withdrawals averaging $218 million over a 78-day streak starting from January 11, cumulatively amounting to over $17.5 billion in outflows from its spot Bitcoin exchange-traded fund (ETF).

This negative trend halted on May 3, with a notable inflow of $63 million into GBTC. This contributed to a net positive inflow of $378.3 million for the overall spot BTC ETF market, following a week of losses. GBTC continued this positive momentum into the following week, adding a further $3.9 million on May 6, totaling $66.9 million in recent inflows.

Despite these inflows, GBTC’s net outflow for the year still stands at a substantial $17.4 billion. However, the broader spot Bitcoin ETF sector in the United States shows a robust balance sheet. Leading the investment influx is BlackRock’s iShares Bitcoin Trust (IBIT) with net inflows reaching $15.5 billion. Other significant contributions have come from Fidelity Investments’ Fidelity Wise Origin Bitcoin Fund (FBTC) at $8.1 billion, Cathie Wood’s ARK 21Shares Bitcoin ETF at $2.1 billion, and the Bitwise Bitcoin ETF Trust (BITB) at $1.7 billion, bringing the total market inflow to nearly $11.8 billion to date.

In related developments, the U.S. Securities and Exchange Commission (SEC) has postponed its decision on approving or rejecting several pending applications for spot Ether ETFs from firms including BlackRock, Grayscale, and Invesco Galaxy until July. The SEC stated, “The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.” This delay also affects other applicants like Fidelity, Franklin Templeton, Hashdex, and Ark 21Shares, aligning with analyst predictions on the matter.

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Bitcoin Traders Target $100k as Price Rebounds

Bitcoin’s recent price surge, driven by a favorable economic climate, has reignited speculation among options traders about the possibility of the cryptocurrency reaching $100,000 this year. Since Federal Reserve Chairman Jerome Powell’s recent announcement dismissing further rate hikes, Bitcoin has climbed over 12% to $63,470, as per CoinDesk. The weak U.S. nonfarm payrolls data further bolstered this upward trajectory, validating Powell’s approach and fueling recovery in the cryptocurrency’s value.

Amidst this renewed optimism, there has been a spike in the demand for Bitcoin call options, with traders on Deribit and over-the-counter networks setting their sights on targets above $75,000 and potentially hitting $100,000. “BTC risk reversals have gone positive, and [there has been a] renewed demand for BTC Sep expiry $75,000 and $100,000 calls,” noted QCP Capital. Options trading is reflecting bullish sentiments, with call options—bets on rising prices—outweighing puts.

Further highlighting this trend, Paradigm, an OTC institutional cryptocurrency trading network, reported a noticeable increase in demand for out-of-the-money calls, suggesting anticipation of further price increases. “We noticed the previous March 25 [expiry] $200,000 call buyer closing his position to buy the July 2024 [expiry] $85,000 strike,” Paradigm shared in a statement.

Analysts who see a bullish path ahead also echo support for Bitcoin’s potential rise. “Bitcoin continues to be supported by the U.S. election cycle and ongoing deficit spending,” said 10X Research, suggesting a tactical bullish stance if Bitcoin remains above $62,000. Meanwhile, Swissblock Insights indicated that a weaker dollar, unless countered by the Fed, could further benefit Bitcoin and other cryptocurrencies.

In technical analysis, John Glover of Ledn provided an Elliot wave forecast that sees Bitcoin potentially reaching $92,000. “Although the dip to $56.5k may have completed the correction, I still expect to see a price of $52-55k before Wave 4 completes, then a push to approximately $92k,” Glover predicted.

As the market continues to react to economic indicators and Federal Reserve policies, Bitcoin remains a focal point for traders leveraging options to capitalize on its volatility and potential upside.

SOURCE: Bitcoin Rebound Has Crypto Options Traders Anticipating $100K

South Korea Excludes Digital Currencies from Donation Legislation

South Korea has recently updated its donation legislation, excluding digital currencies, potentially impacting the nation’s charities and fundraising initiatives. According to a report by Kyunghyang Shinmun on May 5, the Ministry of Public Administration revealed that the amended “Donations Act” will continue to prohibit the use of cryptocurrencies like Bitcoin for donations, even as new permissible donation methods such as department store gift vouchers, stocks, and loyalty points from Korean internet giant Naver are introduced starting in July.

Initially established in 2006, the Donations Act was created when fewer payment options existed, and smartphones were not yet commonplace. The legislation has evolved to include various modern donation methods beyond traditional bank transfers, incorporating automated response systems, postal, and logistics services.

Despite the increasing popularity of digital assets in South Korea, the Ministry has not provided an explanation for their exclusion from donation methods. However, the revised legislation will allow donations in locally issued, KRW-pegged stablecoins and blockchain-issued gift vouchers.

This regulatory decision arrives amidst the growing global adoption of cryptocurrencies for charitable contributions. TheGivingBlock notes that over $2 billion has been donated in cryptocurrency worldwide as of January 2024, a market now inaccessible to South Korean charities.

Additionally, more than half of American charities have begun accepting digital asset donations, showcasing a stark contrast in regulatory approaches across different regions.

This update is part of broader regulatory efforts in South Korea, which include plans to transform its temporary crypto crime investigative unit into a permanent department to address the rising issues of crypto-related crimes and financial fraud.

Simultaneously, Crypto.com, a Singapore-based cryptocurrency exchange, faces challenges entering the South Korean market due to regulatory barriers, further highlighted by recent Anti-Money Laundering (AML) concerns and emergency inspections by South Korean authorities.

SOURCE: South Korea stops short of allowing crypto in updated donation laws

Less Than 10% of Stablecoin Transactions from Real Users

A recent report has shed light on the surprising fact that less than 10% of the transaction volume of stablecoins, a type of cryptocurrency pegged to a stable asset like the US dollar, comes from real users engaging in everyday transactions. The findings raise questions about the true nature of stablecoin usage and its implications for the cryptocurrency market.

Stablecoins have gained popularity in recent years due to their perceived stability compared to other cryptocurrencies like Bitcoin and Ethereum. They are often used as a means of transferring value quickly and efficiently, as well as for trading and investment purposes.

However, the report suggests that the majority of stablecoin transactions are not driven by genuine economic activity but rather by trading and speculation within the cryptocurrency ecosystem. This revelation challenges the narrative that stablecoins are primarily used for everyday transactions and highlights the speculative nature of the cryptocurrency market.

The implications of this revelation are significant. If stablecoins are predominantly used for speculative trading rather than real-world transactions, it could raise concerns about the stability and sustainability of the cryptocurrency market. Moreover, it could affect the perception of stablecoins as a reliable medium of exchange and store of value.

Additionally, the report raises questions about the transparency and regulation of stablecoin issuers. With a large portion of stablecoin transactions driven by trading activity, there may be risks associated with market manipulation and lack of oversight, potentially exposing users to financial harm.

In response to the findings, industry stakeholders may need to reevaluate their approach to stablecoin usage and regulation. Regulators may consider implementing stricter oversight measures to ensure the integrity and stability of the stablecoin market, while users may need to exercise caution when engaging in transactions involving stablecoins.

Overall, the report highlights the need for greater transparency and scrutiny in the stablecoin market to address concerns about its true nature and impact on the broader cryptocurrency ecosystem. As the cryptocurrency market continues to evolve, understanding the dynamics of stablecoin usage will be crucial for shaping its future direction.

SOURCE: Less Than 10% of Stablecoin Transaction Volume Coming from Real Users