CoinDesk Crypto

Before last week’s price crash really got underway, there was a brief crash in the price of ether on Tuesday, Feb. 22. The TradeBlock ETX, a spot reference rate for ETH, fell 15%, from about $1,765 to $1,534 in just over half an hour, before recovering almost as quickly. It was notable because it broke one of the most liquid markets in crypto. 

The Feb. 22 ETH sell-off came with larger than usual volume on all four of the exchanges that are components of the ETX. One of these exchanges, Kraken, experienced a “flash crash,” a rapid and anomalous drop in price. Flash crashes aren’t entirely uncommon in crypto – Binance experienced one on Friday when it was hit with a sudden influx of orders for Polkadot trading contracts – but Kraken’s was extremely notable since it saw ETH-U.S. dollar trades as low as $700, less than half the lowest price printed on any other ETX component exchange. 

An analysis of the Kraken ETH flash crash is inconclusive as to whether it was caused by a technical glitch. However, TradeBlock data shows that trading activity on Kraken wasn’t much different from what two comparable ETX component exchanges saw in the lead-up to the crash, which happened at 9:18 a.m. ET (2:18 p.m. UTC). [TradeBlock is a subsidiary of CoinDesk.] The analysis shines a light on the fragmented nature of crypto market structure, where market disruptions affect even the most liquid assets, even under normal market dynamics. CoinDesk reached out to Kraken for comment, but did not receive any statement in time for publication.

What happened, tick-by-tick

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The chart above tracks the ETX ether price, alongside trades printed on each of the four exchanges that make up the ETX. Right up to about 9:18 a.m. ET, all four exchanges and the ETX reference rate are moving in sync, in what looks like a fairly normal ether price dip. The increasing size of the bubbles represents larger and larger trades as traders react to the price action, one way or another. At 9:18 a.m., the Kraken market, represented in yellow, suddenly crashes severely. Its trades drop out of the ETX calculation as it continues for the next 15 minutes or so to print trades way out of line with the rest of the market.

These four exchanges represent the most liquid ETH-USD markets that are accessible to U.S. investors. Kraken’s CEO has said the Kraken ETH flash crash was not the result of a technical glitch. As the following three charts will show, however, two comparable ETX component exchanges handled comparable increases in volume just fine, including the usually lower-volume ETH-USD market on Bitstamp. The ETX incorporates only executed trades, not orders.

Kraken volumes were high, not highest

The yellow, green and blue lines in the chart above show minute-by-minute volume on Bitstamp, Coinbase and Kraken. LMAX, the fourth ETX component exchange, is excluded because it represents exclusively institutional volume. The others are a mix of institutional and retail activity. 

The surge in volume on Kraken that preceded its ETH flash crash was not the largest of the three exchanges, nor was it a greater outlier compared with normal ETH-USD activity on the exchange. 

Kraken printed the largest trade

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Kraken did, however, see the largest single ETH-USD transaction of the three, represented by a spike in the yellow line that’s well above other large trades that morning. It was a 481.4 ETH trade executed at 9:08 a.m. ET, just as the ETX reference rate had slid to a hair above $1,700, and about 10 minutes before Kraken prices dove so far below the average. That could have been the culprit that dried up the order book, but it’s not such an outlier that it looks conclusive. Coinbase’s largest trade, seen on the blue line at 9:11 a.m. ET, was 376.7 ETH. Bitstamp’s was 184.1 ETH, at 8:52 a.m. ET.

A surge in large trades

Were there other large trades? Yes. At 9:18 a.m. ET, as the Kraken ETH flash crash began, Kraken handled 13 trades in volume of 50 ETH or greater. That’s significantly more large ETH trades than any other market at that time. However, it wasn’t the highest count of large ETH trades on the morning of Feb. 22. At 8:52 a.m. ET, Bitstamp printed 14 transactions of 50 ETH or more. By 9:29 a.m. ET, Kraken would match that number, presumably as arbitrage traders took advantage of the still-wide spread between prices printed on Kraken and the rest of the market, as represented by the ETX. 

As noted above, the ETX counts only executed trades. This is to prevent manipulation of the reference rate through order-book activities like “spoofing,” a kind of manipulative activity in which traders place disingenuous orders, to simulate demand. If it’s order-book analysis you’re looking for, Kaiko has a good breakdown of the Kraken ETH flash crash, along those lines. 

Kaiko didn’t find any conclusive evidence as to what caused the crash, either. Whether it was a technical glitch or a sudden run on the order book probably doesn’t matter. With price discovery taking place on multiple venues, technology risk is multiplied and liquidity is divided. Until capital is able to flow more freely into these fragmented markets, investors should expect more flash-crash events. 

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Tech entrepreneur John McAfee has been indicted by the U.S. Department of Justice on fraud and money laundering charges tied to McAfee’s touting of various cryptocurrency projects without disclosing he was paid to do so.

McAfee, who is currently detained in Spain on a separate tax charge by the DOJ, was indicted alongside Jimmy Watson Jr., an executive adviser to McAfee, according to a press release Friday. They allegedly made more than $13 million from investors. An attached complaint said McAfee is being charged with several counts of wire fraud, securities fraud and money laundering.

According to court documents, the Commodity Futures Trading Commission (CFTC) is bringing separate charges and filing for injunctive relief and civil penalties.

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“The defendants allegedly used McAfee’s Twitter account to publish messages to hundreds of thousands of his Twitter followers touting various cryptocurrencies through false and misleading statements to conceal their true, self-interested motives,” said U.S. Attorney Audrey Strauss in a statement.

Assistant FBI Director William Sweeney said a pump-and-dump scheme earned the two $2 million. They also promoted different initial coin offerings (ICOs) on social media without disclosing their compensation.

The defendants allegedly tried to hide the proceeds from the ICO touting schemes by having the wife of a co-conspirator open an account at a crypto exchange to liquidate the proceeds from the ICOs they promoted, and transfer the U.S. dollars to another bank, a sealed indictment published Friday read.

“McAfee and other McAfee Team members, including Watson, collectively earned more than $11 million in undisclosed compensation that they took steps to affirmatively hide from ICO investors,” the document said.

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The indictment stems from an investigation that began in 2018, according to the filing, though the conduct under investigation allegedly began as far back as December 2017.

UPDATE (March 5, 2021, 17:30 UTC): Updated with additional context from court filings.

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Stani Kulechov, founder of decentralized finance (DeFi) money market Aave, is joining Variant Fund, a cryptocurrency investing firm betting on the concept of the ownership economy.

“At Variant, we pride ourselves on helping founders build community for their community-owned networks, and there are very few people in the world that have more expertise in this dimension than Stani,” Variant’s Spencer Noon told CoinDesk via email.

Kulechov has been one of the most active seed investors in the DeFi space. working to foster composability across DeFi projects – in other words, enabling developers to plug into other applications permissionlessly.

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He will join Variant as a venture partner but will remain in his role with Aave.

“Stani will be working with us on a part-time basis to help source new investment opportunities and collaborate closely with Variant’s existing portfolio founders,” Noon wrote, adding that the team anticipates he will tend to invest alongside Variant as an angel.

DeFi’s growth

All told, nearly $40 billion in digital assets are locked up in various DeFi protocols, off slightly from the peak in February, according to data provider DeFi Pulse. While that’s roughly equivalent to a midsize bank in the U.S., the figure has swelled 40x from a year ago as users were lured in by a boom driven by projects giving away free “governance tokens” to all users, which proved to have surprisingly high values. 

Built on the Ethereum blockchain, Aave serves as a key anchor in the sector. It currently holds about $4.75 billion of crypto collateral, the third most value locked of any DeFi protocol, according to DeFi Pulse. 

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Also joining Variant Fund as an adviser is Cooper Turley. Turley is well known as a content creator throughout crypto, including writing for The Defiant. He’s currently a part of the Audius Project and an active participant in several other DeFi communities. 

“Crypto is now part of the creator toolkit and The Ownership Economy is quickly becoming an important wedge in consumer products,” Variant founder Jesse Walden wrote in a statement. 

Variant Fund formed in July, at the height of 2020’s “DeFi summer,” animated by the thesis that people who make platforms and products stronger can and should share in their growth. The firm’s portfolio includes risk management platform Cozy and the crypto-native unit-of-account project Reflexer Labs.

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Sohrab Sharma, aka “Sam Sharma,” a co-founder of the cryptocurrency firm Centra Tech, has been sentenced to eight years in jail for conducting an illegal initial coin offering (ICO) that fleeced investors of $25 million.

• The Miami-based company had purported to offer crypto-based financial products such as a debit card, according to a news release from the U.S. Attorney for the Southern District of New York on Thursday.
• Sharma was also sentenced to three years of supervised release and ordered to pay a fine of $20,000 and ordered to forfeit $36,088,960.
• In July 2017, Sohrab Sharma and partners Robert Farkas, Raymond Trapani held an initia coin offering, raising the $25 million from investors who had believed Centra Tech’s claims.
• Sharma previously pled guilty to conspiring to commit securities fraud, wire fraud and mail fraud in connection with his co-conspirators’ use of material misrepresentations and omissions to solicit investors to purchase securities, in the form of digital tokens issued by Centra Tech, through fraudulent fundraising efforts that included an ICO, said the news release.
• In December, Farkas was sentenced to one year and one day in prison for his part in the scam.
• Farkas will also face three years of supervised release and must forfeit $347,062 and a Rolex watch purchased with the proceeds of the scam.
• The U.S Marshals Service sold ether cryptocurrency seized from Centra Tech for about $33.4 million.

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Financial data firm Bloomberg announced Friday it is now providing information for six more cryptocurrencies.

• The Bloomberg terminal now provides price data for orchid (OXT), omg network (OMG), eos, chainlink (LINK), tezos (XTZ) and stellar lumens (XLM).
• The data comes from CF Benchmarks, a Financial Conduct Authority–regulated indices provider and Kraken subsidiary.
• Not only does this show institutional interest is beginning to move beyond bitcoin but it also highlights “how the asset class is being viewed alongside the traditional asset classes.” said Sui Chung, CEO of CF Benchmarks.

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One of the most significant and contentious alterations to the Ethereum blockchain in recent memory is now scheduled for inclusion into its codebase.

Ethereum Improvement Proposal (EIP) 1559 will be packaged with the London hard fork this coming July regardless of the mining industry’s discontent with the proposal, according to the All Core Developers call Friday. At least five other EIPs are likely to join EIP 1559 in London.

EIP 1559 flips a typical blockchain transaction on its head in order to fix numerous issues with Ethereum’s user experience. Traditionally, a user sends a gas fee to a miner for a transaction to be included in a block. That gas fee will now be sent to the network itself as a sort of “burn” called basefee with only an optional tip paid to miners. The burnt fee is algorithmically set as well, ostensibly making it easier for users to pay a fair fee.

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The proposal has garnered some of the largest support to date from Ethereum application creators and users alike, given the current difficulty of selecting a correct transaction fee. Miners and mining pools, on the other hand, have been gathering in opposition against the proposal as it progressed toward mainnet.

Mining gold rush

Indeed, Ethereum mining has been a particularly lucrative business of late. Total mining revenue surpassed a record $1.3 billion in February, with some 50% coming from fees alone, according to Coin Metrics. An increase in both the price of ether and transaction fees has introduced a wave of new hash power to the network, which is more than double that of a year ago.

Minority mining pool Flexpool launched a marketing campaign against the EIP. Several minority pools joined, followed by majority pools Ethermine and SparkPool. Over 60% of the Ethereum network’s hash power is now against the proposal. F2Pool is the largest pool in favor of the EIP, with some 10% hash power.

On the call, Ethereum developers decided to pair EIP 1559 with a delay to the difficulty bomb. Also called the “Ice Age,” the bomb incrementally increases the difficulty of mining on the Ethereum network. Geth team lead Péter Szilágyi said that pairing EIP 1559 with the delay helped ensure no one would fork Ethereum at that time without having to undergo some technical hurdles.

MEV to the rescue

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Mining pools have only a few options to stop EIP 1559 now that it’s included, and most of these would be considered actively hostile against the network. The largest danger would be a 51% attack against Ethereum, which would censor transactions using the EIPs framework. It remains unlikely, however, given various financial incentives not to attack the network.

For example, successfully using a 51% attack against Ethereum would likely decrease the value of ether in the short term. (Or maybe not, as three 51% attacks on Ethereum Classic have shown).

Moreover, a new revenue replacement is quickly becoming available for mining networks. Called miner extracted value (MEV), miners can take advantage of their place as arbiters in how blocks are packaged to “front-run” profitable trades. MEV is currently popular among decentralized finance (DeFi) traders who bid up gas prices to secure their place in the block. Many Ethereum mining pools are currently implementing MEV software to gather this untapped source of revenue.

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A dogecoin-inspired non-fungible token (NFT) has sold for 45 ETH, roughly $69,000 at purchase, on the cryptocurrency art platform Foundation.

NFTs are a type of digital asset causing quite a stir these days. They provide proof of an artwork’s scarcity via unique digital identifiers built on top of Ethereum and other blockchains.

The Nyan Dogecoin NFT, by Chris Torres, the same artist who created the Nyan Cat NFT, began its auction journey after first being minted in late February. Nyan Cat sold for an eye-popping 300 ETH (roughly $600,000 at purchase) on Feb. 19. (That same 300 ETH is now worth $451,000.)

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Torres told CoinDesk via email his inspiration behind the Dogecoin NFT was based on the theme of “Luck.”

“I wanted a bright and shiny coin for the piece, then decided to incorporate my style into the work,” Torres said. “I also chose a drop date with as many lucky numbers as possible, even timed down to the drop (3:33pm).”

The Dogecoin NFT ultimately found a home with buyer Mondo, whose bio on Foundation states, “I’ve received 5000 ETH as a gift from my father back in early 2016 and then it all started…”

“Memes have always held great power,” Torres said. “Some specific memes have been shared around the world millions of times and have become a part of our culture.”

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Torres sees NFTs as a way for memelords to monetize their creations more fairly.

The Nyan Dogecoin sale joins a growing trend of NFT artwork being sold on a variety of marketplaces with some pieces fetching millions.

“Anything is worth what someone is willing to pay,” meme artist Ryder Ripps told CoinDesk. Ripps is the self-declared creator of the popular 2010 meme graphic “deal with it.”

According to Foundation data, Ripps’ rights for the “deal with it” artwork sold for 15 ETH (roughly $22,500) on Thursday. The artist, however, compared NFTs to barcodes, such as those on soda bottles used to identify the item at checkout.

“I don’t think you should buy something just because it has a barcode,” said Ripps before conceding that Torres’ Nyan Cat was worth a lot.

“These things are very culturally relevant,” Ripps added.

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Decentralized finance (DeFi) portal Yearn Finance announced via Twitter that it is ending its previously announced merger with DeFi market coverage provider Cover Protocol.

• Yearn tweeted Friday that it has decided to end its merger process with Cover Protocol, a peer-to-peer, decentralized insurance marketplace and that both protocols will continue to operate independently. No reason was given for the breakup.
• Andre Cronje of Yearn subsequently expressed his disappointment in a now-deleted tweet, saying: “I personally find it sad. I had very high regard, trust, and faith in the Cover team. Lesson learned. Won’t trust them again.”
• Yearn added that yVault depositors who have purchased Cover protection will be unaffected.
• Plans for the merger were announced in November, with the aim of Cover becoming Yearn’s backstop coverage provider for its vaults and offering users a reduced risk product.
• Yearn suffered an exploit in one of its DAI lending pools on Feb. 5, draining $11 million.
• Cover also suffered an exploit in December, when a “white hat” hacker tricked the protocol into minting 40 quintillion of its native tokens, which the hacker cashed out before subsequently returning them.

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With crypto prices surging to all-time highs and mainstream corporations adding crypto to their balance sheets, cryptocurrencies are celebrated as the biggest innovation in decades

Binance, one of the world’s biggest cryptocurrency exchanges, said it would consider new marketplace controls after a single large order apparently triggered a flash crash early Friday in polkadot (DOT) trading contracts.

• Prices for the quarterly perpetual-futures contracts on polkadot were trading around $33.25 right around 1:45 coordinated universal time (8:45 p.m. EST), when suddenly they tumbled 99.2%.
• The contracts fell as low as $0.25 in less than a minute, before quickly bouncing back to around $33.
• In just that single minute, some $18 million of the contracts changed hands on the exchange.
• “A user, who held a large position, put a single stop market order in the market, which triggered this needle,” a Binance representative told CoinDesk in an email. “It didn’t affect any other users’ positions as we are using mark price for liquidations.”
• “We will add more controls of stop market order size limits to prevent a similar recurrence,” the representative added.
• While the futures market flash crashed, the cryptocurrency held steady near 33 USDT in the spot market, Binance’s data shows.
• These “coin-margined” perpetual futures are products margined and priced using a cryptocurrency, such as bitcoin, instead of the dollar (fiat).
• A stop market order is an order to buy or sell a stock at the market price once the user-decided stop price is hit.
• In this case, the user was holding a large position that exceeded the total available bids in the market, according to the Binance representative.
• Polkadot is a blockchain network that supports various interconnected sub-blockchains called parachains, designed to provide a higher transaction throughput than the leading Ethereum network.
• The Polkadot network’s DOT token is one of this year’s hottest cryptocurrencies, quadrupling in price already in 2021, for a market value of more than $30 billion. The Wall Street firms Goldman Sachs, JPMorgan and UBS are even reportedly trading exchange-traded products linked to DOT on a Swiss exchange.

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Jobs in the U.S. rose by 379,000 in February, far above the general consensus of 185,000 to 200,000 jobs, coming in much better than the January or December report. 

The U.S. added 49,000 out of 105,000 expected jobs in January and lost 227,000 jobs in December. In February the unemployment rate fell from 6.3% to 6.2%. 

The good report could create more volatility in the U.S. Treasurys market, David Beckworth, a former international economist at the U.S. Department of the Treasury, told CoinDesk.

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On Thursday, bond yields rose to 1.5% after U.S. Fed Chair Jerome Powell said the economy would see temporary inflation upon reopening. The rate climbed further to 1.61% after Friday’s jobs report came out.

Because of the market’s sensitivity to interest rates outlooks, it’s possible there will be a sell-off of high-risk assets (like bitcoin) with the jobs report overshooting estimates, said Steven Kelly, a research associate at the Yale Program on Financial Stability.

It’s unlikely the Fed will pull back on quantitative easing or raise rates in response to volatility in Treasury yields, Kelly added, but it could consider yield curve control or Operation Twist. 

This is a developing story and will be updated.

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Business intelligence firm MicroStrategy, which has essentially linked its fate to the performance of bitcoin, announced it has bought another $10 million of the largest cryptocurrency.

The company’s shares closed at $645.66 Thursday and are down 0.88% in Friday pre-market trading.

• MicroStrategy said it bought about 205 BTC for $10 million in cash, at an average price of about $48,888.
• The company said that as of Friday it now holds about 91,064 BTC that were bought at a combined purchase price of $2.196 billion for an average per coin price of $24,119.
• While MicroStrategy’s crypto investment is still about twice what it paid for it, BTC is more than $10,000 off its all-time high set last month. The company’s shares have lost roughly half their value in that same time frame.

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Singapore-based cryptocurrency exchange Bybit announced Friday it will cease providing its services to customers from the U.K. following a regulatory ban.

In a blog post, Bybit said it will no longer be providing its services following the Financial Conduct Authority’s (FCA) ban on crypto derivatives.

“If you are either a U.K. resident or citizen, please close all your positions and withdraw all account balances by 8 a.m. UTC [3 a.m. ET], March 31, 2021. Thereafter, customers located in or are residents of the U.K. will be restricted from accessing or performing any trading activities on Bybit.”

Bybit Blog

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The move comes after the FCA ban on the sale of derivatives and exchange-traded notes came into effect on Jan. 6, after the financial regulator said it considers the products to be too high risk for retail consumers.

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Cipher Mining Technologies, a newly formed U.S.-based bitcoin mining operation formed from bitcoin mining hardware giant Bitfury Top HoldCo, and Good Works Acquisition (Nasdaq: GWAC) a special purpose acquisition company, said they’ve agreed to merge.

• The combined company has an enterprise value of $2.0 billion, according to the release.
• The combined company is expected to receive $595 million in gross cash proceeds from a combination of cash from a $425 million fully committed stock PIPE, including a $50 million investment in-kind from Bitfury, and $170 million in cash held in Good Works’ trust account from its initial public offering in October 2020.
• ,The fully committed PIPE investment is secured with anchor investors, including Fidelity Management & Research Company and Counterpoint Global (Morgan Stanley).
• The combined company has planned mining capacity of 745MW by the end of 2025 and industry leading cost of energy of approximately 2.7c/kWh, the companies said.

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XRP market participants, including crypto trading platforms, discussed the cryptocurrency’s regulatory status with the U.S. Securities and Exchange Commission (SEC) prior to listing the asset, Ripple said in a new filing Thursday night.

The payments and remittances startup closely associated with the XRP cryptocurrency filed its response to an amended SEC complaint alleging it violated federal securities laws on Thursday night, continuing to deny each of the regulatory agency’s claims in a paragraph-by-paragraph rebuttal reminiscent of the tactic messaging platform Kik used when it faced the SEC two years ago. 

Much of the response resembled Ripple’s first answer, filed at the end of January, to the SEC’s original complaint, which the regulator brought at the end of 2020. The SEC filed an amended complaint in mid-February, 

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As it had in January, Ripple said it reserved the right to file a motion to dismiss the complaint at a future point. 

In its new response, the San Francisco-based startup continued arguing that XRP is not a security and that it had not violated federal law in selling XRP over the past eight years. Many of the new additions to the response addressed statements the SEC added about documents the regulator believes support its case that Ripple should have known its sales may have been securities transactions.

The new response also leaned more heavily on claims that crypto trading platforms discussed whether to list XRP with the SEC in previous years. One unnamed company, referred to as “Platform A,” reportedly “evaluated XRP’s regulatory status in light of prior SEC guidance and actions.”

“Platform A met with SEC staff in the Division of Corporation Finance and Division of Trading and Markets, including at least one senior SEC staff member who previously met with Ripple on multiple occasions during investigation-related meetings in 2018, about the legal status of XRP and sought guidance on whether the SEC staff considered XRP a security,” the response said. 

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While Ripple did not name the platform, Coinbase is perhaps the most prominent U.S.-based crypto exchange that listed XRP in early 2019.

Ripple said the unnamed platform was not told the SEC considered XRP to be a security, and listed the asset after that conversation. 

Coinbase has since suspended trading due to the ongoing SEC suit, alongside numerous other exchanges operating in the U.S. Ripple claimed this cost XRP holders roughly $15 billion over the past few months.

The price of XRP plunged dramatically after the suit was first announced by Ripple, dropping from near 60 cents to around 27 cents. It has since breached the 60 cent level again, and was trading closer to 45 cents as of press time.

Ripple CEO Brad Garlinghouse and Board Chairman Chris Larsen are both named as defendants, and both told District Judge Analisa Torres of the Southern District of New York that they may file to dismiss the charges against them as individuals in a pair of letters dated March 3.

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Embattled cryptocurrency exchange BitMEX’s new CEO said the firm is planning to add spot trading, brokerage, and custody services to its offerings.

• Alexander Hoptner, who joined the exchange in December, said Thursday he is planning on transforming the exchange and expanding business operations by adding three news services, according to a Bloomberg report. 
• Prior to joining the firm, Hoptner worked for the German exchange Börse Stuttgart. In his new role, he plans to transform the crypto firm by amending relationships with regulators and expanding business operations from spot trading to brokerage and custody services.
• “I was coming from the regulated and classical world. I have a lot of touchpoints with the regulators already…Now I’m working on the crypto side and bringing the crypto side to the regulated world,” said Hoptner. 
• BitMEX announced Thursday the appointment of auditing veteran Stephan Lutz as its new chief financial officer who will take charge of financial growth, business expansion, and profitability.
• In October 2020, the U.S. Commodity Futures Trading Commission and federal prosecutors charged BitMEX with facilitating unregistered trading and other violations.
• As reported by CoinDesk Wednesday, BitMEX founder and former CEO Arthur Hayes, who is currently in Singapore, could surrender to U.S. authorities next month.
• Hoptner declined to comment on the criminal charges against the BitMEX co-founders, said the publication.

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While bitcoin can suffer deeper drawdowns due to traditional market instability, its broader bullish trend would remain valid as long as historically strong chart support is held intact.

“The 21-week SMA (Simple Moving Average) is the level to defend for the bulls,” trader and technical analyst Michaël van de Poppe told CoinDesk. “The bias remains bullish as long as the SMA support is intact.”

An SMA is an arithmetic moving average calculated by adding recent prices and dividing the tally by the number of periods. SMAs are trend-following, lagging indicators and often act as support and resistance levels.

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The 21-week SMA acted as a price floor during the previous bull market, as seen below.

The cryptocurrency repeatedly found dip demand (marked by arrows) around the 21-week SMA throughout the rally from $300 to $19,783 seen in the October 2015-December 2017 period.

If history is a guide, deeper pullbacks, if any, could run out of steam around the 21-week SMA this year. The technical line is currently located at $32,240, while bitcoin is changing hands near $46,500.

A continued rise in the U.S. Treasury yields could push the dollar higher, sending bitcoin toward the SMA support.

Related: How Bitcoin Could Be Affected by February’s Positive Jobs Report

One cannot rule out that possibility as Federal Reserve’s President Jerome Powell defied expectations on Thursday by expressing little concern regarding the recent spike in yields. That has left the doors open for a further rally in yields and an extension of last week’s risk aversion.

The dollar strengthened, while bitcoin and stocks fell in the seven days to Feb. 28, as the U.S. 10-year yield surged to a 12-month high of 1.6% and investors priced in higher odds of an early unwinding of the Federal Reserve stimulus.

The yield remains elevated near 1.6% at press time, and the dollar index is hovering at a three-month high of 92.00. Also, European stocks and the U.S. stock futures are flashing red.

Both bitcoin and stocks may find some relief later today if the U.S. nonfarm payrolls data due at 13:30 UTC paints a gloomy picture of the labor market, sending yields lower.

Also read: Market Wrap: Bitcoin Falls to $48K as Fed’s Powell Makes No New Promises; Ether Drops

Related Stories

• All About Bitcoin – Mar 8, 2021
• The Hash – Mar 8, 2021

Investment bank Goldman Sachs has conducted a client survey on digital assets and findings show positive sentiment toward the future of cryptocurrency investing.

• The survey results showed that out of 280 respondents, 40% have exposure to cryptocurrencies and 54% predict the price of bitcoin will between $40,000 to $100,000. News of the survey was first reported by The Block.
• Other key takeaways include 61% of respondents expect their digital assets to increase in the next 12-24 months and 32% were most interested in prime brokerage for physical or spot to gain exposure to cryptocurrencies.
• Looking ahead, 22% of respondents predict the price of bitcoin will be over $100,000 in 12 months while 34% believe regulation and mandate permissions are the greatest hurdles to start allocating for the digital assets sector.
• On March 1, reports emerged that Goldman Sachs is relaunching its cryptocurrency trading desk after a three-year hiatus and plans to once again support bitcoin futures trading, a source familiar with the matter confirmed to CoinDesk.

Read more: Gold and Bitcoin Won’t ‘Cannibalize’ Each Other: Goldman Sachs Analysts

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• Binance Pledges New Controls After 99% ‘Flash Crash’ in Polkadot Futures
• How Bitcoin Could Be Affected by February’s Positive Jobs Report
• All About Bitcoin – Mar 8, 2021
• The Hash – Mar 8, 2021

A Swedish man has pled guilty to charges of securities fraud, wire fraud and money laundering that defrauded upwards of 3,500 victims of more than $16 million in crypto.

• Roger Nils-Jones Karlsson, 45, communicated with his victims encouraging their investment in various fictitious schemes, according to an announcement by the Department of Justice Thursday.
• Karlsson directed his victims to make their investments using cryptocurrencies such as bitcoin and has admitted to defrauding no fewer than 3,575 victims of more than $16 million between November 2012 and June 2019.
• Operating under several aliases, Karlsson used the website of his company Eastern Metal Securities to advertise investment in a “Pre Funded Reversed Pension Plan” at $98 per share where investors would receive payout of 1.15 kg of gold per share.
• Karlsson’s arrest in Thailand in June 2019 was followed by his extradition to the United States and his indictment the following month.
• The charges of fraud and money laundering each carry a maximum penalty of 20 years imprisonment and fines of up to $250,000 and $500,000 respectively.

See also: Crypto Crime Siphoned Off Nearly $10.5B in 2020: Research

Related Stories

• Kaiko Research: Monthly Market Report February 2021
• CoinDesk Report: The Investment Case for Crypto
• Powell Remarks Suggest Inflation Is Ahead; Here’s What That Means for Crypto Markets
• Market Wrap: Bitcoin Falls to $48K as Fed’s Powell Makes No New Promises; Ether Drops

THE TAKEAWAY:

• Bitcoin (BTC) trading around $48,204 as of 21:15 UTC (4:15 p.m. ET). Declining 4.5% over the previous 24 hours.
• Bitcoin’s 24-hour range: $47,578-$51,781 (CoinDesk 20)

Bitcoin’s price fell by the most in a week after U.S. Federal Reserve Chair Jerome Powell acknowledged he “would be concerned” by tightening financial conditions because rising U.S. government-bond yields put upward pressure on borrowing costs.

The comments might signal more hesitation in providing fresh monetary stimulus. Bitcoin prices quadrupled last year and have rallied 66% this year on speculation the cryptocurrency could serve as an inflation hedge in the face of trillions of dollars of money printing by central banks around the world.

Related: Kaiko Research: Monthly Market Report February 2021

As of press time, bitcoin was changing hands around $48,204, down about 4.5% over the past 24 hours.

Powell said in a question-and-answer session with the Wall Street Journal he doesn’t expect higher inflation to persist and that the central bank is still “a long way from our goals” of an economic recovery and lower unemployment.

The yield on the 10-year U.S. Treasury note climbed on Thursday above 1.5% as disappointment spread among some traders in traditional markets who had bet the Fed might provide specifics on how to tamp down long-term interest rates, according to Bloomberg News.

For bitcoin traders who have been betting the cryptocurrency’s price is a good hedge against potential currency debasement, Powell’s comments offered few signs the Fed plans new dovish actions. Such moves might include expanding the U.S. central bank’s $120 billion-a-month bond-purchasing program.

Related: CoinDesk Report: The Investment Case for Crypto

“Powell did not deliver,” the cryptocurrency trader Alex Kruger tweeted. “Basically repeated his usual dovish lines.”

Stocks were lower on Thursday, also potentially reflecting dimmed expectations of more stimulus that might boost the equities market.

Ether falls with bitcoin

Ether (ETH), the second-largest cryptocurrency by market value, fell by 2.5% to $1,528.

For the past week, prices have remained in a narrow range between roughly $1,420 and $1,570.

The cryptocurrency is still well off its all-time-high price around $2,036.

Other markets

Digital assets on the CoinDesk 20 are mostly green Tuesday. Notable winners as of 21:15 UTC (4:15 p.m. ET):

• XRP (XRP) + 4.8%
• kyber network (KNC) + 4.0%

Notable losers:

• cosmos (ATOM) + 9.9%
• cardano (ADA) + 9.7%

Equities:

• S&P 500 -1.3%
• FTSE 100 -0.4%
• Nikkei 225 -2.1%

Bonds:

• U.S. Treasury 10-year yield +0.054 percentage point to 1.55%

Related Stories

• Powell Remarks Suggest Inflation Is Ahead; Here’s What That Means for Crypto Markets
• Crypto Fraudster Who Robbed 3,500 Victims of Over $16M Pleads Guilty