A Week In Crypto (29 October 2023)

Biden’s Pending Executive Order Could Pit AI Against Crypto

Source: Forbes

In the realm of digital assets, notably Bitcoin, and major cryptocurrencies like Ethereum and XRP, this year has been marred by concerns regarding impending regulations. With these imminent regulatory changes looming large, Wall Street giants are preparing with an immense investment arsenal totaling $48.3 trillion. The recent upsurge in Bitcoin's value, driven by heightened anticipation surrounding BlackRock, the world's largest asset management company, and their closely-watched application for a Bitcoin spot exchange-traded fund (ETF), has sent ripples through the cryptocurrency market, elevating the prices of Ethereum, XRP, and other digital currencies. While Wall Street readies itself for a potential cryptocurrency bull run, the entire industry is closely monitoring an impending announcement from U.S. President Joe Biden.

President Biden is reportedly on the verge of unveiling a long-anticipated and all-encompassing executive order focused on artificial intelligence. This executive order is designed to foster "safe, secure, and trustworthy" AI and is anticipated to mandate comprehensive evaluations of AI models before they can be employed by federal agencies. However, initial reports about this executive order have stirred concerns within the crypto sector. There are apprehensions that it might classify computing power as a "national resource," compelling cloud computing providers like Microsoft, Google, and Amazon to divulge instances where customers exceed specific computing resource thresholds. These apprehensions have drawn parallels to "Operation Choke Point" but in the context of computing power, with potential repercussions for activities like Bitcoin mining and the broader cryptocurrency industry.

Alexander Grieve, who serves as the head of government affairs at Paradigm, an investment firm specializing in Bitcoin and cryptocurrencies, has suggested that such an executive order might view Bitcoin mining as an act of "depriving households of power" and potentially divert valuable development talent away from other critical applications. As the cryptocurrency industry grapples with these unfolding events, it is undoubtedly a crucial juncture for digital assets, especially as the United States has emerged as a prominent hub for Bitcoin mining following China's ban on such activities in 2021.

Bitcoin Doubles in Price during 2023 in Anticipation of Higher Price Action

Source: AP News

Bitcoin has once again taken the center stage, surging to nearly $35,000 this week, marking its highest point in almost 18 months, more than doubling its value at the beginning of 2023. This impressive rally follows Bitcoin's tumultuous journey, soaring from just over $5,000 each at the onset of the pandemic to nearly $68,000 in November 2021, amid significant growth in the tech industry. However, Bitcoin's value suffered due to aggressive rate hikes by the Federal Reserve to combat inflation, coupled with the collapse of a major player in the crypto space, FTX.

Starting 2023, the cryptocurrency traded for less than $17,000, losing more than 75% of its value. Yet, investors began returning in large numbers this year as inflation started to subside. The collapse of prominent tech-focused banks led more investors to explore cryptocurrencies as they moved away from Silicon Valley startups and other riskier investments. Now, Bitcoin is getting another boost, driven by the potential of opening up a much larger pool of investors. There is growing optimism about the prospect of Bitcoin exchange-traded funds (ETFs) – investment securities that can be bought and sold like stocks. While federal regulators have not given the green light yet, recent developments have improved the odds of approval, possibly in the coming months.

For instance, the District of Columbia Court of Appeals ordered the Securities and Exchange Commission to reconsider the ETF for Grayscale's Bitcoin fund, following the company's lawsuit against the regulator over concerns about investor protections and other issues. The SEC did not appeal this decision. Additionally, the listing of BlackRock's iShares Bitcoin Trust by the Depository Trust and Clearing Corporation gained attention online, potentially contributing to the recent Bitcoin surge.

Despite the enthusiasm surrounding Bitcoin's recent performance, it's essential to remember that the crypto market remains highly volatile. Experts caution that it is "the most volatile asset class," with unpredictable value fluctuations, meaning investors can gain or lose money rapidly. The collapse of the crypto exchange giant FTX had a significant impact on public confidence in the industry, particularly retail investors, while institutional investors, such as hedge funds, now dominate crypto investing. The future of cryptocurrency remains uncertain, and while regulatory approval of spot ETFs is a positive development, it does not guarantee sustained gains. As the crypto market continues to evolve, experts are keenly watching how future regulations will unfold to assess the long-term prospects for Bitcoin and the broader industry.

Alameda and FTX Wallets Transfer $80M in Crypto This Week

Source: NEWSBTC

Recent data from blockchain analytics has shown significant activity involving crypto assets being transferred from wallet addresses associated with the defunct FTX exchange and Alameda Research over the past week. This substantial movement of funds, initially reported by the reputable analytics firm Nansen, amounted to over $60 million.

A closer examination of on-chain data has revealed that in the previous week, approximately $80 million was shifted from addresses connected to FTX and Alameda. Nansen first brought this development to light through a series of posts on the X platform (formerly Twitter) on October 27th. Their reports indicated that FTX had been orchestrating significant transfers of digital assets, including prominent cryptocurrencies like Chainlink (LINK), Solana (SOL), Ethereum (ETH), Polygon (MATIC), and others, to various exchange addresses. Notably, it was disclosed that FTX directed around $8.6 million to a Binance address.

Based on Nansen's most recent data, FTX subsequently moved $24.3 million worth of various tokens to different addresses on Coinbase and Binance. Additionally, the now-defunct exchange conducted a substantial transfer of 943,000 SOL (equivalent to approximately $32 million) from its cold storage wallet on the same day. As of October 27th, Nansen's data indicated that the total amount transferred from FTX and Alameda wallets exceeded $60 million.

On Saturday, October 28th, another blockchain data tracker, Lookonchain, provided further insights into recent transfer activities related to FTX and Alameda-associated addresses. In a post on the X platform, Lookonchain reported that FTX and Alameda moved an additional $20 million in crypto assets on that Saturday. According to Lookonchain's data, FTX addresses transferred 309,185 SOL (valued at around $10 million), 2 million Band Protocol tokens (equivalent to $3.15 million), 3.82 Perpetual Protocol tokens (valued at about $2.3 million), among other crypto assets. Using Lookonchain's data, the total value of FTX's transfers for the week reached $78.7 million.

The specific motives behind these transfers remain undisclosed, and it remains uncertain whether they are linked to the exchange's bankruptcy proceedings. Notably, these transfers follow the FTX estate's recent staking of Solana tokens worth $122 million. The FTX exchange has been actively working to bring its ongoing Chapter 11 court case to a conclusion, with a recent proposal aimed at offering customers over 90% of their missing assets by the end of Q2 2024. Meanwhile, the former CEO, Sam Bankman-Fried, is currently undergoing a trial involving seven counts of fraud-related charges."

Crypto Fear and Greed Index

Crypto Fear and Greed Index Source: alternative.me 

Weekly Token Watch: Top movers within the top 100

Pepe (PEPE), Coin #80, 52.2%, $0.00000117

Toncoin (TON), Coin #12, -6.9%, $2.06

Crypto Meme Corner

Source: Google Images

Thanks for tuning in this week! We remain focused on keeping you informed about the latest developments in the crypto space. Enjoy your week, and if you have any feedback for us, please reach out! Stay informed. Stay ahead.

-The Token Mindset Team

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