- The Saxon State Criminal Police Office (LKA) is gradually disposing of these holdings, with a significant proportion being sold over the counter (OTC).
- The upcoming repayments from Mt. Gox will bring a large amount of Bitcoin and Bitcoin Cash onto the market.
- Former US President Donald Trump will speak at the world’s largest Bitcoin conference on July 27.
Bitcoin Holdings of the LKA Saxony
The State Criminal Police Office (LKA) of Saxony currently holds around one billion US dollars worth of Bitcoin. These considerable holdings originate from confiscated assets and comprise around 15,552 Bitcoin. The authority is currently in the process of gradually selling these holdings.
In the last 24 hours, around 8,400 Bitcoin have been sold. A significant proportion of these sales are over-the-counter (OTC), which means that the transactions are carried out directly between buyer and seller and not via public exchanges. An example of this is the transaction of 3,250 Bitcoin to the B2C2 Group, a well-known liquidity provider in the crypto market.
The advantage of OTC selling is that it causes less market volatility than selling via public exchanges. This is particularly important in order not to influence the price of the cryptocurrency too much. Nevertheless, the ongoing sale of Bitcoin by LKA Saxony is a significant development that could have a lasting impact on the market.
https://platform.twitter.com/embed/Tweet.html?creatorScreenName=https%3A%2F%2Ftwitter.com%2F_Ed_Prinz&dnt=true&embedId=twitter-widget-0&features=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%3D%3D&frame=false&hideCard=false&hideThread=false&id=1811686401907290332&lang=en&origin=https%3A%2F%2Fblockzeit.com%2Fweek-in-review-current-developments-in-the-crypto-market%2F&sessionId=070fef0e43f5faa2dbe8e56a38eb98f3c6f9a8ba&siteScreenName=BlockzeitE&theme=light&widgetsVersion=2615f7e52b7e0%3A1702314776716&width=500px
It is expected that the selling process will continue for some time until all holdings are fully liquidated. The continuous sale in such large quantities could temporarily put pressure on the Bitcoin price. However, the exact impact on the market will depend on various factors, including general market demand and the reaction of other major players in the crypto market.
LKA Saxony’s decision to sell its Bitcoin holdings is part of a larger strategy to manage and liquidate seized assets. This practice allows the authority to convert the seized funds into liquid assets that can then be used for various government purposes. However, it is also a challenge to sell these large amounts of Bitcoin in a way that causes as little disruption to the market as possible.
Overall, the case of the LKA Saxony shows how government agencies deal with cryptocurrencies and the impact such sales can have on the crypto market. It remains to be seen how the market will develop in the coming weeks and whether other state actors will take similar measures.
Relevant article: Bitcoin should be a strategic reserve says German MP
Security Incident at Compound Finance
Compound Finance, a leading platform in the field of decentralized finance (DeFi), recently fell victim to a suspected hacker attack. The platform’s website was redirected to a phishing site, posing a significant security risk to users.
Phishing attacks are a common method of stealing sensitive information from users. In this case, the official Compound Finance website was manipulated to redirect visitors to a newly registered phishing page. This page is designed to mimic the real website in order to trick users into entering their personal credentials. Once the users reveal their information, the attackers can use this data to gain access to the victims’ crypto wallets and other sensitive information.
The immediate response to this attack was to warn users not to visit the Compound Finance website for the time being. This precautionary measure is intended to prevent further users from accessing the phishing site and having their data compromised.
The incident was reported by a well-known crypto-investigator who specializes in such security issues. This report is a wake-up call for the entire DeFi community to constantly monitor and improve the security of their platforms. Attacks of this nature can not only cause financial losses for users, but also undermine trust in DeFi platforms as a whole.
https://platform.twitter.com/embed/Tweet.html?creatorScreenName=https%3A%2F%2Ftwitter.com%2F_Ed_Prinz&dnt=true&embedId=twitter-widget-1&features=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%3D%3D&frame=false&hideCard=false&hideThread=false&id=1811354394098581583&lang=en&origin=https%3A%2F%2Fblockzeit.com%2Fweek-in-review-current-developments-in-the-crypto-market%2F&sessionId=070fef0e43f5faa2dbe8e56a38eb98f3c6f9a8ba&siteScreenName=BlockzeitE&theme=light&widgetsVersion=2615f7e52b7e0%3A1702314776716&width=500px
The exact number of users affected and the financial damage caused by the attack is not yet known. However, it is believed that such attacks can potentially affect thousands of users, especially if the phishing site remains online for an extended period of time.
Compound Finance is not the first and probably not the last DeFi platform to fall victim to such an attack. In recent years, similar security incidents have repeatedly shown that the DeFi industry, despite its innovative approaches, is still exposed to significant risks. It is therefore of the utmost importance that both platform operators and users themselves remain vigilant and take appropriate security measures.
For compound finance operators, this incident means that they need to review their security protocols and possibly implement additional measures to prevent future attacks. These could include increased monitoring mechanisms, regular security checks and training users to deal with phishing attacks.
In summary, the Compound Finance security incident clearly shows the importance of taking the security aspects of the DeFi world seriously. Only through continuous vigilance and improvements can such attacks be minimized and user confidence in DeFi platforms be strengthened.
Jack Dorsey’s Block and the Sale of Mining Equipment
Jack Dorsey’s company Block, a multi-faceted financial services company, has made a name for itself in the world of cryptocurrencies and Bitcoin mining in particular. Block, formerly known as Square, offers a wide range of financial applications and services, including the popular Cash app and Square, a retail credit card payment solution. However, Block’s involvement in the Bitcoin sector is particularly notable.
Block recently took a significant step in the Bitcoin mining space by developing a new 3-nanometer ASIC (Application Specific Integrated Circuit). ASICs are specialized hardware components that are specifically optimized for mining cryptocurrencies such as Bitcoin. Compared to conventional processors (CPUs) and graphics processing units (GPUs), ASICs offer far greater efficiency and computing power, making them the preferred choice for professional Bitcoin miners.
Jack Dorsey Tweet (Bild: Twitter)
Block’s new 3-nanometer ASIC represents a significant technological advancement. Smaller nanometer counts in chip manufacturing typically mean higher efficiency and performance with lower power consumption. This is particularly important in Bitcoin mining, where hardware efficiency directly affects profitability.
Block has begun selling these new ASICs to Core Scientific, a leader in Bitcoin mining. Core Scientific is known for its extensive mining capacity and use of advanced technology to maximize the Bitcoin hashrate. The hashrate indicates the total computing power in the Bitcoin network and is an indicator of how secure the network is against attacks.
The sale of this new mining equipment to Core Scientific will increase Core Scientific’s hashrate by 15 exahashes per second (EH/s). For comparison, Core Scientific’s current hash rate is 24.6 EH/s. This means that Block’s new ASICs will increase Core Scientific’s computing capacity by approximately one-third, providing a significant competitive advantage.
This development demonstrates how strategic investment and technological innovation can strengthen companies’ position in the highly competitive Bitcoin mining market. Block has established a leading position through its continuous research and development in the field of Bitcoin mining. This reflects not only the company’s commitment to the cryptocurrency industry, but also Jack Dorsey’s vision to support and promote Bitcoin and other cryptocurrencies.
The sale of the new ASICs is also a sign that Block plans to play a significant role in the global Bitcoin mining industry. Most of the chip manufacturers for ASICs are located in Asia, which means that Block will now have to compete with some of the largest and most experienced companies in the world. This competition could drive the industry forward and lead to further technological advancements.
In summary, Jack Dorsey’s Block has strengthened its position in the Bitcoin mining sector by selling advanced mining hardware to Core Scientific. This development underlines the importance of innovation and technological advancement in the cryptocurrency industry and shows how companies can improve their market position through strategic investments and partnerships.
Donald Trump at the Bitcoin Trade Fair
Former US President Donald Trump, currently the Republican presidential candidate, has announced that he will be speaking at the world’s largest Bitcoin trade fair. This event will take place on July 27 in Nashville, Tennessee, and is a major event in the cryptocurrency industry.
Trump’s speech is scheduled for 2pm local time and is expected to last around 30 minutes. This is a notable move as Trump was known more as a critic of Bitcoin and other cryptocurrencies during his time in office from 2017 to 2021. However, his recent statements and actions indicate that he has recognized the crypto community as an important voter base and is actively courting their support.
A central point of his current campaign is the acceptance of donations in cryptocurrencies. This shows his willingness to embrace modern financial technologies while also signaling some support for the cryptocurrency industry. This decision could help him attract young and tech-savvy voters, who make up a significant part of the crypto community.
In addition, Trump has spoken out in favor of better regulatory frameworks for the cryptocurrency industry. He has criticized the Federal Reserve (Fed) and its plans for a central bank digital currency (CBDC). Trump’s stance against the Fed and his rejection of the CBDC plans show that he favors a decentralized and less regulated financial landscape, which resonates well with many crypto enthusiasts.
Trump’s participation in the Bitcoin Fair and his planned speech are also a sign that cryptocurrencies are increasingly entering the political discourse. During his speech, he is expected to speak positively about Bitcoin and possibly outline his plans for supporting the cryptocurrency industry should he win the presidency again. However, it remains to be seen whether his actions, if he is re-elected to office, will reflect his current statements.
In the past, Trump has often been critical of cryptocurrencies and even referred to them as a threat to the US dollar. His recent about-turn could indicate that he has recognized the potential of cryptocurrencies for economic innovation and growth. Should Trump return to office and actually implement pro-Bitcoin measures, this could have a significant impact on the cryptocurrency industry and its regulation in the US.
The Bitcoin Trade Show in Nashville will be attended by thousands of participants, including investors, developers, entrepreneurs and enthusiasts from around the world. Trump’s speech will undoubtedly be one of the highlights of the event and could help influence public perception and the political discussion on cryptocurrencies.
In summary, Trump’s involvement at the Bitcoin Fair shows that cryptocurrencies are playing an increasingly important role in political and economic discourse. His support could further drive the acceptance and integration of cryptocurrencies and intensify the discussion about their regulatory treatment. It will be interesting to see how Trump’s stance on Bitcoin and other cryptocurrencies will develop in the future and what impact this could have on the industry.
Trading Strategies for the Mount Gox Redemptions
The upcoming redemptions related to the collapse of crypto exchange Mt. Gox represent a significant moment for the crypto market. Mt. Gox, once the largest Bitcoin exchange in the world, filed for bankruptcy in 2014 after around 850,000 Bitcoin were stolen. Now, almost a decade later, the remaining assets are being repaid to creditors, which could have a significant impact on the market.
The repayments include not only Bitcoin, but also Bitcoin Cash. These repayments provide an opportunity for specialized trading strategies to profit from the expected market movements. One prominent strategy suggested by Singapore-based trading firm Presto Labs is to take advantage of market neutrality by taking short positions on Bitcoin Cash and long positions on Bitcoin.
Selling pressure on Bitcoin Cash
Presto Labs argues that the selling pressure on Bitcoin Cash will be significantly higher than on Bitcoin. They estimate that the selling pressure on Bitcoin Cash could be about four times stronger than on Bitcoin. This estimate is based on the assumption that Mt. Gox creditors who receive their Bitcoin and Bitcoin Cash back will be more inclined to sell their Bitcoin Cash. This assumption is based on the observation that Bitcoin Cash is less popular and less widely used compared to Bitcoin.
Market neutral strategies
Presto Labs’ proposed strategy is to short Bitcoin Cash and buy (go long) Bitcoin at the same time. This so-called market neutral strategy aims to profit from the price movements of both assets, regardless of the general market trend. Should the selling pressure on Bitcoin Cash actually be higher, the price of Bitcoin Cash would fall more, making the short position profitable. At the same time, lower selling pressure on Bitcoin could keep the price stable or even increase it, strengthening the long position.
Diamond hands and holding behavior
Another factor to consider is the holding behavior of so-called “diamond hands” – investors who do not sell their Bitcoin even in turbulent times. Many of the creditors of Mt. Gox who are now getting their Bitcoin back could belong to this group. These investors may be less inclined to sell their Bitcoin, reducing the selling pressure on Bitcoin and thus keeping the price stable or even increasing it.
Volatility and risks
It is important to note that these events can be associated with high volatility. The redemptions from Mt. Gox mean that a large amount of Bitcoin and Bitcoin Cash enters the market, which can lead to significant price fluctuations. Traders pursuing this strategy should be aware of the risks and take appropriate risk management measures.
Impact on the market
If Presto Labs’ strategy is correct, it could lead to a significant drop in the price of Bitcoin Cash while the price of Bitcoin remains relatively stable or even increases. This could change the market landscape and create new opportunities for investors and traders. Market reactions to such major events often present opportunities, but also challenges that need to be carefully analyzed and managed.
Conclusion
The crypto market continues to be dynamic and characterized by diverse developments. From the sale of large Bitcoin holdings by the LKA Saxony to security incidents at DeFi platforms, new innovations in the mining sector and political influences: Each of these factors has the potential to have a significant impact on the market. Investors should therefore always act in an informed and cautious manner in order to benefit from opportunities and minimize risks.
The redemptions related to Mt. Gox are a significant event for the crypto market. Presto Labs’ proposed trading strategies offer an interesting opportunity to profit from the expected market movements. However, investors should consider the risks and potential volatility. Thorough analysis and a cautious approach are essential to succeed in this dynamic environment.
Author
Ed Prinz serves as Chairman of https://dltaustria.com, the most renowned non-profit organization in Austria specializing in blockchain technology. DLT Austria is actively involved in the education and promotion of the added value and application possibilities of distributed ledger technology. This is done through educational events, meetups, workshops and open discussions, all in voluntary collaboration with leading industry players.
Disclaimer
This is my personal opinion and not financial advice. For this reason, I cannot guarantee the accuracy of the information in this article. If you are unsure, you should consult a qualified advisor you trust. No guarantees or promises regarding profits are made in this article. All statements in this and other articles are my personal opinion.