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Bitcoin ETF Inflows Reaching Monthly High as Bitcoin Hovers Near $63K

The spot Bitcoin exchange-traded fund (ETF) market in the United States experienced a notable daily inflow of $129.45 million, marking the highest in a month and the fifth consecutive day of inflows. This influx comes as Bitcoin’s price holds near the $63,000 mark, struggling to break past the key resistance level of $62,000.

Approved by the Securities and Exchange Commission on January 10, spot Bitcoin ETFs started trading on January 11. Major ETF issuers initially saw substantial inflows and trading volume, with the exception of Grayscale’s GBTC, which has experienced zero flows or significant outflows from the start.

Data from the crypto research platform SoSo Value indicates that Fidelity’s ETF recorded the highest inflow on July 1, with 1,030 BTC worth $65 million, followed by the Bitwise ETF, with 650 BTC worth $41 million. ARK Invest saw inflows of 205 BTC worth $13 million. However, BlackRock’s IBIT and Grayscale’s GBTC, the two largest spot Bitcoin ETFs by net asset value, saw zero flows on the same day.

The recent inflow of $129.45 million on July 1 is the highest since June 7. This positive trend in BTC ETF inflows coincides with Bitcoin reclaiming the $63,000 level after struggling for nearly three weeks. 

“The July 1 inflows marked the fifth consecutive day of inflows for spot BTC ETFs after nearly seven days of outflows in the last week of June,” noted an analyst from SoSo Value.

June was a bearish month for Bitcoin ETFs and the BTC price, with ETFs recording nine days of outflows compared to ten days of inflows. The value of outflows significantly exceeded the value of inflows during this period.

The bullish trend for spot BTC ETFs coincided with a surge in BTC prices on Monday, reaching a new weekly high of $63,778. However, the price dipped below $63,000 earlier today and is currently trading at $62,558. Despite recovering from a weekly low below $60,000, BTC remains over 15% down from its all-time high of $73,750.

With July historically proving to be a bullish month for Bitcoin and the upcoming approval of spot Ether ETFs, the crypto market could witness another rally in the coming weeks, similar to the surge seen with the approval of spot BTC ETFs.

SOURCE: Bitcoin ETF inflows highest in a month as Bitcoin hovers near $63K

Curve Finance Adopting crvUSD for Fee Distribution

Curve Finance is shifting its fee distribution mechanism from the 3cr token to its native stablecoin, crvUSD, to enhance the stablecoin’s utility and better integrate it into the Curve Finance ecosystem.

Curve Finance has announced a major change in its fee distribution process. The decentralized finance (DeFi) platform will now use its native stablecoin, crvUSD, instead of the 3cr token for fee distribution. This transition aims to improve crvUSD’s utility and further integrate it within the Curve Finance ecosystem.

According to a press release shared with Cointelegraph, this switch will create an “additional supply sink for the stablecoin,” potentially increasing the total value locked (TVL) in the platform. Uncollected fees are a significant factor in this “supply sink,” the release noted.

Michael Egorov, the founder of Curve Finance, highlighted the benefits of this transition for users: “The transition to crvUSD means that users will now obtain fees in a dollar-denominated stablecoin. This shift simplifies the process significantly, as crvUSD doesn’t have to be converted to anything else to be utilized in Curve Finance products.”

The new fee distribution mechanism is also expected to incentivize users to engage more with the Curve Finance ecosystem. Egorov elaborated, “Curve users can deposit crvUSD into the ecosystem using fees earned.” He added that the value of 3crv, while generally increasing, has a variable conversion rate, necessitating additional steps for users to convert 3crv into a more stable or usable form of currency.

Despite the anticipated benefits, there are some risks associated with the transition. Egorov acknowledged that while the 3crv token has been operational for over four years without issues, crvUSD is relatively new, having been in use for just one year. It has undergone multiple audits and has been deemed fit for deployment but is inherently less time-tested compared to 3crv.

Operational risks were also a concern during the “preparation phase” for on-chain votes required for the change. However, Egorov assured that these risks have been mitigated since all relevant votes have passed.

This strategic move by Curve Finance underscores its commitment to enhancing the utility of crvUSD and fostering a more integrated and user-friendly ecosystem.

SOURCE: Curve Finance adopts crvUSD for fee distribution

Cardano Nodes Undergoing Upgrade to Boost Security After DDoS Attack

Following a Distributed Denial of Service (DDoS) attack, Cardano blockchain developers are implementing a node upgrade to bolster security against similar future threats. This move comes after the network withstood an attempt on June 25 to manipulate transaction fees and steal staked ADA tokens, which ultimately failed due to prompt action by the developer community.

The attack commenced at block 10,487,530. According to Raul Antonio, CTO of Fluid Tokens, the attackers aimed to exploit a vulnerability related to the transaction fee mechanism. “They attempted to use the size of reference scripts, which doesn’t currently affect transaction fees, to reduce costs for high-value transactions,” Antonio explained. Despite their efforts, the blockchain’s security measures held firm.

Philip Disarro, founder and CEO of Anastasia Labs, shared insights on the attackers’ failed strategy. “The size of reference scripts doesn’t impact the transaction fee, but it does increase the workload for validators. This was their angle,” said Disarro. He revealed that the community quickly recovered the stolen ADA, thwarting the attackers’ plans. Disarro quipped about the unsuccessful attempt, “Thanks for the free money, moron. It’s ironic that their effort to harm the ecosystem ended up benefiting our open-source development.”

Following the attack, Intersect, a member-based organization within the Cardano ecosystem, acknowledged the incident. They praised the developers’ swift action preventing any serious damage to the network. “Although the network remained secure and operational, the load increased significantly, affecting some stake pool operators,” a representative from Intersect stated. They confirmed that a thoroughly tested solution will soon be available for stake pool operators to enhance their systems.

The developer community remains vigilant, continuing to improve the blockchain’s defenses. Disarro emphasized the importance of careful deployment: “Rushing to implement changes without adequate testing and independent audits can expose you to risks, much like the attacker experienced.” As the Cardano network moves past this incident, the focus remains on fortifying its infrastructure against potential future attacks.

Bitcoin Layer 2: Alex Lab’s Alleged Exploitation by Lazarus Group

Recent reports have surfaced linking Bitcoin’s Layer 2 technology to potential exploitation by the Lazarus Group, a notorious hacking collective associated with North Korea. The Alex Lab, a prominent player in the cryptocurrency space, allegedly became a target of this sophisticated cyber-attack.

Bitcoin’s Layer 2 solutions are designed to improve scalability and transaction speeds by processing transactions off the main blockchain. This technology has gained traction for its ability to enhance Bitcoin’s functionality and address network congestion issues.

However, concerns have emerged regarding security vulnerabilities within Layer 2 protocols, which the Lazarus Group purportedly exploited. The group’s tactics reportedly include phishing schemes and malware deployment aimed at accessing digital assets stored on Layer 2 platforms.

The implications of such attacks are significant for the cryptocurrency community, highlighting the ongoing challenges of securing decentralized financial systems against sophisticated cyber threats. Users and stakeholders are urged to remain vigilant and implement robust security measures to safeguard their investments.

Alex Lab, a key player in advancing Bitcoin’s technological infrastructure, now faces scrutiny over its security protocols and response mechanisms to mitigate potential breaches. The incident underscores the need for continuous innovation in cybersecurity to protect against evolving threats in the digital asset ecosystem.

As investigations into the alleged exploitation unfold, regulatory bodies and industry experts are likely to assess the broader implications for cryptocurrency adoption and regulatory frameworks. The outcome could influence future developments in cybersecurity practices and regulatory oversight within the cryptocurrency sector.

In conclusion, the reported exploitation of Bitcoin Layer 2 technology by the Lazarus Group underscores the critical importance of cybersecurity in safeguarding digital assets and maintaining trust in decentralized financial systems.

SOURCE: Alex Lab points to Lazarus Group after last month’s $4M exploit

Uphold Will Delist USDT and Five Stablecoins by July 1, Citing MiCA

Uphold, a leading cryptocurrency exchange, has announced it will cease support for six popular stablecoins by July 1 to comply with the European Union’s Markets in Crypto-Assets Regulation (MiCA). This move is part of a broader trend among major crypto exchanges to align their practices with new regulatory requirements.

The stablecoins affected by Uphold’s decision include Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD). Users holding these stablecoins must convert them to another cryptocurrency by June 28, after which the platform will automatically convert any remaining balances into USD Coin (USDC).

MiCA, which was passed into law in May 2023 and partially implemented in June 2023, imposes stricter regulatory requirements on fiat-backed stablecoins and e-money tokens. The regulations are set to come into full effect by the end of 2024, aiming to enhance consumer confidence in digital currencies.

“MiCA places additional and stricter regulatory requirements on fiat-backed stablecoins and e-money tokens that have crossed a predetermined adoption threshold,” Uphold explained in its notice to customers. These measures include a 1:1 reserve ratio for fiat-backed stablecoins and requirements for issuers to maintain asset reserves with a third party, separate from other assets.

From June 30, MiCA’s stablecoin regulations will be active in the European Economic Area. Crypto exchanges like Uphold, Binance, Kraken, and OKX have been updating their policies to comply. Binance, for instance, categorized its stablecoins into “regulated” and “unauthorized” groups, though it has yet to finalize which fall under each category. OKX delisted Tether in Europe earlier this year without citing MiCA, while Kraken is still reviewing its stance on USDT.

These changes come as the European Banking Authority takes charge of overseeing these tokens, shifting control from national authorities within the EU. This regulatory shift aims to ensure stablecoins are reliable for use as a store of value and for payments.

In summary, Uphold’s delisting of six stablecoins by July 1 marks a significant step in the ongoing adjustments within the crypto industry to meet the stringent MiCA regulations, ensuring stability and security in the digital currency market.

SOURCE: Uphold to delist USDT and 5 stablecoins by July 1, citing MiCA

Meme Sector Experiencing Sharp Sell-off as GameStop Losses Continue

Meme tokens are seeing a significant decline as GameStop’s losses extend to 60%. A Solana-based parody token dropped 25% in the last 24 hours, with other meme tokens following suit.

The controversial GameStop (GME) stock rally faced its second consecutive day of reversal on Monday, closing the U.S. trading session down 12% after a 40% drop on Friday. This downward trend has negatively impacted meme tokens that often mirror GameStop’s movements. GME ended Monday at $24.89, down 62% from a two-year high of $61 last Thursday.

Elsewhere, the Solana-based meme token GME, which parodies the company, slid 25%, reversing a more than 200% rally from the past week. Related tokens like Roaring Kitty (KITTY) and other cat-themed tokens, which previously moved alongside GME stock, lost an average of at least 10%, according to data tracked by CoinGecko.

Dog-themed tokens, including Dogecoin (DOGE), Shiba Inu (SHIB), and Floki (FLOKI), also experienced declines, with losses ranging from 4% to 10%. The stock had been volatile since late May, spurred by the return of retail trader and GME bull Keith Gill. Known by his aliases @TheRoaringKitty and “DeepF*ckingValue,” Gill was a pivotal figure in the stock’s short squeeze rally in 2021.

Last week, Gill showcased a $580 million position in GME equity and options holdings, boosting the stock’s prices and potentially setting him up for a billion-dollar exposure. However, gains were short-lived after GameStop announced plans to sell up to 75 million shares, just days after raising $933 million by selling 45 million shares. The company also reported a drop in quarterly sales, further dampening investor sentiment.

The impact on meme tokens was immediate and severe. “The drop in GME stock directly influences these meme tokens due to their correlation,” said a market analyst. “Investors should brace for more volatility as the situation unfolds.”

SOURCE: Meme Sector Sees Sharp Sell-off as GameStop Losses Extend to 60%

Elliptic Report Highlights Emerging AI-Driven Crypto Crime

Elliptic’s 2024 report uncovers the increasing use of AI in sophisticated crypto crimes, highlighting a new era of cyber threats from deepfake scams to state-sponsored cyberattacks.

The report reveals how advanced technologies are being exploited for a range of illicit activities. One alarming finding is an advertisement for an “unethical” GPT on the dark web, claiming, “AI has two faces, just like humans.”

The report also highlights the advertisement for WormGPT, which states, “Embrace the dark symphony of code, where rules cease to exist, and the only limit is your imagination. Together, we navigate the shadows of cyberspace, ready to conquer new frontiers. What’s your next move?”

Deepfake videos are a significant concern, with Elliptic revealing that doctored videos of prominent individuals are being used to promote fraudulent investment schemes. The report states, “Doctored videos – or ‘deepfakes’ – of notable individuals promoting investment scams have targeted the likenesses of Elon Musk, former Singaporean Prime Minister Lee Hsien Loong, and both the 7th and 8th Presidents of Taiwan, Tsai Ing-wen and Lai Ching-te.”

These deepfake scams are becoming increasingly convincing, making it difficult for individuals to distinguish between genuine and fraudulent content. The use of AI in these scams demonstrates the growing sophistication of cybercriminals and the potential for significant financial losses.

Elliptic’s report serves as a warning to the crypto community about the emerging threats posed by AI-driven crimes. The rise of AI technologies has opened new avenues for cybercriminals, and the report suggests that these threats are just beginning. As AI continues to evolve, so too will the tactics used by those seeking to exploit its capabilities for illicit purposes.

The findings emphasize the need for increased vigilance and advanced security measures to combat the growing threat of AI-driven crypto crimes. The report underscores the importance of staying informed about the latest developments in cyber threats and the need for robust defenses to protect against these emerging risks.

SOURCE: AI-driven crypto crime is only just beginning — Elliptic report

Bitcoin Bets Surge to $37 Billion as ETF Inflows Reach Record High

Investors are doubling down on Bitcoin, with bets reaching a staggering $37 billion as inflows into exchange-traded funds (ETFs) hit a new record high. This significant uptick underscores the growing confidence in Bitcoin’s long-term potential and its role as a viable investment asset.

The surge in Bitcoin bets reflects a broader trend of increasing institutional and retail interest in the cryptocurrency market. As traditional financial institutions and investors embrace Bitcoin, its legitimacy as a store of value and hedge against inflation is gaining traction.

ETFs have emerged as a popular vehicle for gaining exposure to Bitcoin, offering investors a convenient and regulated way to invest in the digital asset. The record inflows into Bitcoin ETFs signal a growing acceptance of cryptocurrency within the mainstream financial industry.

One of the driving forces behind the surge in Bitcoin bets is the recent approval of Bitcoin futures ETFs in the United States. These ETFs allow investors to speculate on Bitcoin’s price movements without directly owning the underlying asset, providing a more accessible entry point for institutional investors.

Furthermore, the increasing adoption of Bitcoin by companies and institutions as a treasury reserve asset is bolstering confidence in its long-term value proposition. Companies like Tesla and Square have allocated significant portions of their balance sheets to Bitcoin, signaling their belief in its potential as a store of value.

The $37 billion in Bitcoin bets and record ETF inflows indicate a growing optimism among investors about the cryptocurrency market’s future. As Bitcoin continues to gain mainstream acceptance and adoption, its price is likely to see further appreciation in the coming months and years.

Overall, the surge in Bitcoin bets and ETF inflows reflects a maturing market and growing confidence in the long-term viability of cryptocurrency as an asset class. With institutional and retail investors alike betting big on Bitcoin, the stage is set for continued growth and development in the cryptocurrency space.

SOURCE: Bitcoin Bets Hit Peak of $37B as ETF Inflows Set New Record

Bitcoin Options Traders Anticipating Imminent Breakout Above $74K

Bitcoin options traders are positioning for the asset to hit new record prices this month, driven by strong bullish activity and significant call buying for June expiries.

“Our desk saw strong bullish follow-through with significant call buying for June expiries, indicating positioning in the options market for a decisive break of 74,000 all-time-highs this month,” digital asset hedge fund QCP said in a Wednesday market update. 

Options are derivative contracts that grant buyers the right to buy or sell an asset at a specific price before or at a predetermined date. If the underlying asset doesn’t reach the strike price, the option expires worthless. Buying calls suggests a bullish outlook, while put option buyers are bearish.

“Options flow was clearly bullish today with big sizes on long BTC out-of-money call spreads at the end of June and, to a lower extent, at the end of July,” said institutional crypto derivatives trading network Paradigm in a Telegram broadcast.

Joshua Lim, co-founder of crypto derivatives principal trading firm Arbelos Markets, noted “very concentrated call buying” on Tuesday with about 1,100 contracts purchased of June 28 expiration call spreads in $74,000-$80,000 strikes, representing around $80 million notional demand. 

A call spread involves buying call options at a lower strike price while selling the same amount of calls at a higher strike price with the same expiry, aiming to profit from a limited price increase.

Bitcoin has been consolidating for nearly three months since reaching an all-time high just below $74,000 in mid-March. After briefly dropping below $57,000 in early May, it has steadily recovered, currently trading around $71,000, only a few percentage points from new record prices.

Crypto investment services firm Matrixport stated in a Wednesday post that Bitcoin “appears to be ready to squeeze higher,” supported by heavy inflows to U.S. spot Bitcoin exchange-traded funds and rising open interest in the futures market. 

Matrixport highlighted that a surge above the $72,000 level could trigger a short squeeze. There is approximately $1.5 billion worth of leveraged futures contracts betting on lower prices around this range that could be liquidated, intensifying the move higher.

SOURCE: Bitcoin Options Traders Anticipate Imminent Breakout Above $74K to New Record Prices

Regulator Drops Penalty in Crypto Yield Case Against Block Earner

Australia’s federal court has spared fintech firm Block Earner from paying a fine, even though it found the company offered a crypto yield-bearing product without a financial services license.

Justice Ian Jackman ruled on June 4 that Block Earner “acted honestly.” At the time its yield-bearing “Earner” product launched, Block Earner did consider getting licensed but concluded, based on research and legal advice, that it didn’t need one.

Block Earner founder and CEO Charlie Karaboga told Cointelegraph that obtaining a legal opinion before launching the product “showed that we acted honestly and did everything that we could do as a startup.”

The court acknowledged that Block Earner tried to obtain legal advice. Justice Jackman rejected the Australian Securities and Investments Commission’s (ASIC) request for a $234,000 (350,000 Australian dollars) fine. Block Earner had proposed a $40,000 (60,000 Australian dollars) penalty, which is three times the amount earned from the product in question.

Karaboga refrained from calling it a “fair ruling,” explaining that the only “silver lining” was avoiding a penalty. He noted that the firm still suffered “reputational damage” and has “lost a lot of money” on legal fees over the past two years.

ASIC stated in a June 4 press release that it is reviewing the decision.

In February, Justice Jackman ruled that Block Earner’s “Earner” products offered in 2022, which provided yield on loans in USD Coin (USDC), Bitcoin (BTC), Ether (ETH), and PAX Gold (PAXG), required an Australian Financial Services License (AFSL).

The company’s “DeFi Access” product, which facilitates the use of the lending protocol Aave, escaped punishment. The court found it didn’t operate under a managed investment scheme, so no AFSL was needed.

ASIC sued Block Earner in November 2022, alleging both the Earner and DeFi Access products needed a license as they were managed investment schemes—when a fund pools investor money and uses it to buy assets.

The Earner product operated from March 17, 2022, to November 16, 2022, ending before court proceedings began.

SOURCE: Block Earner spared penalty in regulator’s crypto yield suit