Cointelegraph

Key takeaways:

The Bitcoin long-to-short indicator at Binance hit a 30-day low, signaling a sharp decline in bullish leverage demand.

US-listed Bitcoin exchange-traded funds reversed a negative trend with $516 million in net inflows following a period of heavy liquidations.

Bitcoin (BTC) has fluctuated within a tight 8% range over the last four days, consolidating near $69,000 after an abrupt slide to $60,130 on Friday. Traders are currently grappling with the primary catalysts for this correction, particularly as the S&P 500 holds near record highs and gold prices have climbed 20% over a two-month period.

The uncertainty following the 52% retreat from Bitcoin’s $126,220 all-time high in October 2025 has likely prompted an ultra-skeptical stance among top traders, stoking concerns of further price declines.

Bitcoin top traders' long-to-short positions at Binance and OKX. Source: Coinglass

Whales and market makers on Binance have steadily pared back bullish exposure since Wednesday. This shift is reflected in the long-to-short ratio, which dropped to 1.20 from 1.93. This reading represents a 30-day low for the exchange, suggesting that demand for leveraged long positions in margin and futures markets has cooled, even with BTC hitting 15-month lows.

Meanwhile, the long-to-short ratio for top traders at OKX hit 1.7 on Tuesday, a sharp reversal from its 4.3 peak on Thursday. This transition aligns with a $1 billion liquidation event in leveraged bullish BTC futures, where market participants were forced to close positions due to inadequate margin. Importantly, this specific data point reflects forced exits rather than a deliberate directional bet on further downside.

Strong ETF demand suggests Bitcoin whales are still bullish

Demand for spot Bitcoin exchange-traded funds (ETFs) serves as strong evidence that whales haven’t flipped bearish, despite recent price weakness.

Bitcoin spot exchange-traded funds daily net flows, USD. Source: CoinGlass

Since Friday, US-listed Bitcoin ETFs have attracted $516 million in net inflows, reversing a trend from the previous three trading days. Consequently, the conditions that triggered the $2.2 billion in net outflows between Jan. 27 and Feb. 5 appear to have faded. A leading theory for that pressure pointed to an Asian fund that collapsed after leveraging ETF options positions via cheap Japanese yen funding.

Franklin Bi, a general partner at Pantera Capital, argued that a non-crypto-native trading firm is the most likely culprit. He noted that a broader cross-asset margin unwind coincided with sharp corrections in metals. For instance, silver faced a staggering 45% decline in the seven days ending Feb. 5, erasing two months of gains. However, official data has yet to be released to validate this thesis.

The Bitcoin options market followed a similar trajectory, with a spike in neutral-to-bearish strategies on Thursday. Traders pivoted after Bitcoin’s price slipped below $72,000 rather than anticipating worsening conditions.

Related: Bitcoin sentiment hits record low as contrarian investors say $60K was BTC’s bottom

Bitcoin options premium volumes at Deribit, USD. Source: Laevitas.ch

The BTC options premium put-to-call ratio at Deribit surged to 3.1 on Thursday, heavily favoring put (sell) instruments, though the indicator has since retreated to 1.7. Overall, the past two weeks have been marked by low demand for bullish positioning through BTC derivatives. While sentiment has worsened, lower leverage provides a healthier setup for sustainable price gains once the tide turns.

It remains unclear what could shift investor perception back toward Bitcoin, as core values like censorship resistance and strict monetary policy stay unchanged. The weak demand for Bitcoin derivatives should not be interpreted as a lack of confidence. Instead, it represents a surge in uncertainty until it becomes clear that exchanges and market makers were unaffected by the price crash.

Former FTX chief CEO Sam Bankman-Fried has asked a federal court for a new trial on fraud charges, arguing that previously unavailable witness testimony could undermine the government’s case that led to his 25-year prison sentence.

In a motion filed Feb. 5 in Manhattan federal court, Bankman-Fried challenged his 2023 conviction, though the request is separate from his formal appeal, as Bloomberg reported. Motions for a new trial face a high legal bar and are rarely granted.

The filing was submitted to the court by Bankman-Fried’s mother, retired Stanford law professor Barbara Fried, and is now under review. Bloomberg described the effort as a long shot.

Still, the move keeps the case active and highlights Bankman-Fried’s strategy of contesting the verdict on multiple fronts, even after the fallout of FTX’s collapse reverberated across the crypto industry for years.

Bankman-Fried was convicted on seven criminal counts tied to the misuse of customer funds at FTX and its affiliated trading company, Alameda Research, in one of the most consequential fraud cases in crypto’s history. Despite the conviction, Bankman-Fried has maintained his innocence. 

Source: Cointelegraph

Related: Fenwick agrees to settle lawsuit alleging role in FTX collapse

What the filing argues, specifically 

In the motion, Bankman-Fried contends that testimony from former FTX executives Daniel Chapsky and Ryan Salame could challenge the prosecution’s narrative about the company’s financial condition before its collapse in November 2022.

Neither executive appeared at trial, though Salame pleaded guilty to campaign finance and fraud-related charges. He’s currently serving a seven-and-a-half-year prison sentence.

Bankman-Fried also asked that a different judge review the motion, arguing that trial judge Lewis Kaplan showed “manifest prejudice” during the proceedings.

Those claims echo previous arguments raised in Bankman-Fried’s appeal hearing, where his lawyer said Kaplan improperly barred the defense from telling jurors that sufficient funds were available to repay investors.

Meanwhile, the FTX bankruptcy estate, the pool of remaining assets overseen by court-appointed administrators, continues to make progress in returning funds to affected customers. The exchange is using a phased repayment process and distributed billions of dollars to creditors in 2025, with additional payouts expected as asset recoveries and claims reviews continue.

Strategists at State Street, one of the world’s largest asset managers, say the US dollar’s worst run in nearly a decade could deepen if the Federal Reserve eases policy more aggressively than markets expect, which is a distinct possibility following a possible leadership change at the central bank. 

Speaking at a conference in Miami, State Street strategist Lee Ferridge said the dollar could decline by as much as 10% this year if financial conditions loosen further. While he described two rate cuts as a “reasonable base case,” he warned that the risks are skewed toward more reductions. “Three is possible,” Ferridge said.

Source: Walter Bloomberg

Lower US interest rates tend to reduce the appeal of dollar-denominated assets, especially for foreign investors. As rate differentials narrow, overseas investors are more likely to increase currency hedging, which involves selling dollars to protect returns. That added hedging demand can amplify downward pressure on the currency.

Dollar weakness could also be tied to Kevin Warsh, US President Donald Trump’s pick to succeed Jerome Powell as Fed chair. If confirmed, Warsh is widely expected to favor a more aggressive pace of rate cuts.

With the central bank’s current target rate range of 3.50%-3.75%, markets are currently aligned with the more cautious scenario. According to CME Group’s FedWatch Tool, investors are pricing in two rate cuts this year, with the first likely coming in June. Two policy meetings are scheduled before then.

June’s FOMC meeting is likely to see the first of two rate cuts this year. Source: CME FedWatch

Weak dollar seen as catalyst for Bitcoin

A weaker US dollar has often coincided with stronger demand for risk assets, including Bitcoin (BTC) and other digital assets. Analysts frequently point to an inverse relationship between the US Dollar Index and Bitcoin, where periods of dollar softness tend to create a more favorable backdrop for crypto prices.

The US Dollar Index recently touched a four-year low. Source: Bloomberg

A falling dollar can ease financial conditions, boost global liquidity and push investors toward assets seen as alternatives to fiat currencies. That dynamic has helped support Bitcoin during several past dollar downturns.

Still, the relationship is far from automatic. Recent analysis suggests Bitcoin’s short-term performance has not consistently tracked dollar weakness, and in some periods, prices have even fallen alongside declines in the greenback.

Profit-taking, investor positioning, broader risk sentiment and uncertainty around monetary policy can all dampen the impact of currency moves.

Related: Crypto’s 2026 investment playbook: Bitcoin, stablecoin infrastructure, tokenized assets

Ledger, the French digital asset security company known for its hardware wallets, has integrated OKX DEX into its Wallet app, enabling users to execute multichain token swaps directly from a self-custodial environment.

According to the company, the integration provides access to OKX DEX’s liquidity aggregation from within the Ledger Wallet app, allowing users to swap tokens with the need to interact with external decentralized exchange interfaces.

Ledger said trades are routed using OKX DEX’s proprietary X-Routing technology, which aggregates liquidity across hundreds of decentralized exchanges to identify efficient execution paths. Transactions remain signed on the user’s Ledger device, with private keys never leaving the hardware wallet.

A spokesperson for Ledger told Cointelegraph that access to the OKX DEX integration is rolling out gradually, starting with availability for about 20% of Ledger Wallet users beginning today, with no device firmware or app update required.

At launch, swaps are supported on Ethereum (ETH), Arbitrum (ARB), Optimism (OP), Base (BASE), Polygon (POL) and BNB Chain (BNB), with no cross-chain or cross-seed swaps enabled.

OKX DEX is a decentralized exchange aggregator within the OKX ecosystem that routes trades across multiple onchain liquidity venues, separate from the company’s centralized exchange.

Related: Uniswap lands on OKX’s X Layer as exchange deepens DeFi strategy

Crypto IPOs expected in 2026

The integration follows reports in January that Ledger is exploring a US initial public offering that could value the company at more than $4 billion, with Goldman Sachs, Jefferies and Barclays involved in early discussions.

While Ledger would not confirm the reports, if true, it would join a growing list of crypto companies with their eyes set on public listings this year.

In January, tokenization platform Securitize advanced plans to go public through a merger with a Cantor Fitzgerald–backed blank-check company, disclosing in related filings that its revenue grew more than 840% through September 2025.

That same month, digital asset custodian Copper was reported to be exploring public listing options, though the company said it is not currently planning an IPO.

US-based crypto exchange Kraken is also expected to go public sometime in 2026. In November, Kraken said it had confidentially filed a draft registration statement with the US Securities and Exchange Commission, taking a formal step toward a potential initial public offering of its common stock.

However, on Tuesday, multiple media outlets reported that the company’s CFO, Stephanie Lemmerman, had been ousted. Her name does not appear on Kraken-parent Payward leadership page, which now lists Robert Moore, formerly VP of business expansion, as deputy CFO.

Inquiries on the change to Payward and Kraken by CoinTelegraph were not immediately replied.

Magazine: Big questions: Should you sell your Bitcoin for nickels for a 43% profit? 

Bitcoin (BTC) is trading below $69,000 on Tuesday, confirming the view that price consolidation is the most likely course over the short term. The sell-off to $60,000 and the subsequent recovery to $72,000 resulted in many BTC price indicators falling into what analysts believe to be a deep value zone, but will buyers reach the same conclusion?

Key takeaways:

Bitcoin’s realized price bands have aligned with a long-term accumulation zone that preceded new BTC highs. 

Power Law quantile models place BTC near the lower 15% of its long-term log-log price corridor, a zone that has consistently appeared after prior cycle peaks.

Valuation and momentum metrics are clustering around the $40,000–$55,000 region, marking a statistically significant structural support area.

BTC realized price bands outline long-term DCA zones

Bitcoin’s realized price and shifted realized price have successfully identified long-term accumulation zones since 2015.

Realized price reflects the average cost basis of all BTC last moved onchain whereas the shifted realized price smoothens this metric forward in time, capturing deeper-value zones during stronger drawdowns.

Currently, Bitcoin’s realized price sits near $55,000, while the shifted realized price is around $42,000.

BTC monthly price zones based on realized price bands. Source: Cointelegraph/TradingView

Multiple years of historical data show that rallies following the re-test of these zones delivered big gains, as shown in the chart above. While returns have diminished over time, the structure still implies upside potential of 170% to 220%, aligning with targets above $150,000 in the next bullish period.

Bitcoin has typically consolidated for six to eight months after testing the realized price bands before resuming an upward trend and hitting new highs.

Power law model signals relative undervaluation for BTC

Popularized by BTC researcher Giovanni Santostasi, the updated power law quantile model places BTC near the 14th percentile of its long-term log-log price corridor, suggesting temporary undervaluation following a cycle peak that fell short of the model’s projected $210,000 high in 2025.

Bitcoin projections based on the power law quantile model. Source: X

Confluence between price trading near realized price bands and lower power law percentiles has preceded major recoveries.

The model’s fifth (0.05) percentile previously marked long-term cycle floors and now sits between $50,000 and $62,000, overlapping with the accumulation range defined by the realized price bands.

Related: Bitcoin holders sell 245K BTC in tight macro conditions: Did the market bottom?

Analysts say Bitcoin may sell off before the next big rally occurs

Bitcoin investor Jelle noted that BTC price is currently down roughly 31% from its first weekly RSI 37 break, a level that has preceded cycle bottoms since 2014.

The drawdowns ranged between 17% and 55%, with the recent cycles bottoming closer to 40–43%, implying potential downside toward $52,000 before a durable low forms.

Crypto analyst Sherlock highlighted a breakdown in the BTC/Gold (XAU) ratio below the 15–16 level, a signal that previously marked transitions into a bearish period.

BTC/Gold ratio analysis by Sherlock. Source: X

Based on this framework, Sherlock warns BTC may still see a deeper retracement toward the $38,000 to $40,000 region if history repeats.

Related: Bitcoin price punishes traders as 24-hour crypto liquidations pass $250M

The Bank of England has launched a new industry experimentation initiative to explore how tokenized assets could be settled using synchronized, atomic settlement in British pounds sterling as part of efforts to modernize the UK’s real-time gross settlement (RTGS) infrastructure.

The Synchronisation Lab initiative will allow 18 selected companies to test delivery-versus-payment and payment-versus-payment settlement between the BoE’s next-generation RTGS core ledger, known as RT2, and external distributed-ledger platforms, in a non-live environment without using real money, according to a bank statement.

The six-month pilot, scheduled to start in spring 2026, is intended to validate the central bank’s design choices for synchronized settlement, assess interoperability between central bank money and tokenized assets, and inform the development of a potential future live RTGS synchronization capability.

Originally announced in October, the initiative brings together 18 participants, including market infrastructure providers, banks, fintechs and decentralized-technology companies to test use cases spanning tokenized securities settlement, collateral optimisation, foreign exchange and digital-money issuance.

Source: Chainlink

Among the Web3 participants, Chainlink and UAC Labs will test decentralized approaches to coordinating synchronized settlement between central bank money and assets issued on distributed-ledger platforms. Companies such as Ctrl Alt and Monee will focus on delivery-versus-payment settlement for tokenized gilts and other securities.

Other participants, including Tokenovate and Atumly, will test conditional margin payment workflows and digital-money issuance and redemption flows designed to coordinate with RTGS settlement. The roster also includes Swift and LSEG.

The bank said the work of the lab initiative will be used to refine the design of its RTGS synchronization capability and support further development work, with participants expected to present their use cases and findings following the conclusion of the program.

Global central banks expand pilots

The Bank of England is just one of a roster of central banks exploring how tokenization, programmable settlement and digital currencies could reshape their core monetary and payment systems.

In May, the Federal Reserve Bank of New York and the Bank for International Settlements published research from Project Pine examining how smart contracts could support monetary policy in tokenized financial systems, including a prototype toolkit for faster and more flexible central bank actions on programmable ledgers.

In October, the Monetary Authority of Singapore announced BLOOM, an initiative aimed at expanding settlement infrastructure to support transactions in tokenized bank liabilities and regulated stablecoins.

Beyond tokenization pilots focused on settlement and market infrastructure, central banks have also been running experiments with central bank digital currencies (CBDCs).

In Australia, the central bank launched a wholesale digital currency trial in July using stablecoins, tokenized bank deposits and a pilot CBDC. 

This was followed by the United Arab Emirates completing its first government payment with a digital dirham in November, and China-led mBridge reporting in January that it had processed $55 billion in cross-border CBDC transactions across multiple jurisdictions.

Magazine: Bitcoin’s ‘biggest bull catalyst’ would be Saylor’s liquidation: Santiment founder

Bitcoin’s long-standing narrative as “digital gold” is being put to the test as its recent price action increasingly resembles that of a high-risk growth asset rather than a traditional safe haven, according to new research from Grayscale.

Report author Zach Pandl said on Tuesday that while Grayscale still views Bitcoin (BTC) as a long-term store of value due to its fixed supply and independence from central banking authorities, recent market behavior suggests otherwise.

“Bitcoin’s short-term price movements have not been tightly correlated with gold or other precious metals,” Pandl wrote, pointing to record rallies in bullion and silver prices.

Instead, the analysis found that Bitcoin has developed a strong correlation with software stocks, particularly since early 2024. That sector has recently come under intense selling pressure amid concerns that artificial intelligence could disrupt or render many software services obsolete.

Bitcoin’s latest plunge mirrors the collapse in software stocks since the start of 2026. Source: Grayscale

The report suggests Bitcoin’s growing sensitivity to equities and growth assets reflects its deeper integration into traditional financial markets, driven in part by institutional participation, exchange-traded fund activity and shifting macroeconomic risk sentiment.

The shift comes as Bitcoin has experienced about a 50% drawdown from its October peak above $126,000. The decline unfolded in several waves, beginning with a historic October 2025 liquidation event, followed by renewed selling in late November and again in late January 2026. Grayscale also pointed to “motivated US sellers” in recent weeks, citing persistent price discounts on Coinbase.

Related: Crypto’s 2026 investment playbook: Bitcoin, stablecoin infrastructure, tokenized assets

Part of Bitcoin’s ongoing evolution

Bitcoin’s recent failure to live up to its safe-haven narrative should not be viewed as a setback but rather as part of the asset’s ongoing evolution, according to Grayscale.

Pandl said it would have been unrealistic to expect Bitcoin to displace gold as a monetary asset in such a short period.

“Gold has been used as money for thousands of years and served as the backbone of the international monetary system until the early 1970s,” Pandl wrote.

While Bitcoin’s failure to reach similar monetary status is “central to the investment thesis,” he said, it could evolve in that direction over time as the global economy becomes increasingly digitized through artificial intelligence, autonomous agents and tokenized financial markets.

Despite its recent underperformance, Bitcoin’s annualized returns have significantly outpaced gold over the past decade. Source: Grayscale

In the near term, Bitcoin’s recovery may depend on fresh capital entering the market, either through renewed ETF inflows or a return of retail investors. Market maker Wintermute said retail participation has recently been concentrated in AI-related stocks and growth narratives, limiting near-term demand for crypto assets.

Verifying Satoshi Nakamoto: A matter of math, not media

From time to time, individuals claim to be Satoshi Nakamoto, Bitcoin’s pseudonymous creator. Such announcements generate headlines, spark heated debates and trigger instant skepticism. Yet after years of assertions, lawsuits, leaked files and media interviews, no claim has been backed by definitive proof.

The reason is simple. Proving someone is Satoshi is not a matter of storytelling, credentials or courtroom victories. It is a cryptographic problem governed by unforgiving rules.

Nakamoto built Bitcoin (BTC) to function as a peer-to-peer (P2P) cryptocurrency without requiring trust in people. It is widely assumed that Satoshi Nakamoto is an adopted name rather than a real one. As a result, anyone who claims to be Satoshi, or is presented as such, must prove that identity. That proof would likely involve identity documents, historical communication records and, most critically, control of a private key associated with one of Bitcoin’s earliest addresses.

Over the years, several individuals have been speculated to be Satoshi Nakamoto, but only a few have publicly claimed to be the creator of Bitcoin.

The most prominent claimant is Craig Steven Wright, who repeatedly asserted that he was Satoshi. That claim collapsed after a UK High Court ruling explicitly determined he was not Satoshi Nakamoto and sharply criticized the credibility of his evidence.

Dorian S. Nakamoto was identified by Newsweek in 2014 as Satoshi Nakamoto, but he immediately denied any connection to Bitcoin’s creator. Early Bitcoin pioneer Hal Finney also rejected speculation that he was Satoshi Nakamoto before his passing. Nick Szabo has likewise been speculated to be Satoshi over the years and has consistently denied the claim.

What constitutes genuine proof of ownership in Bitcoin

In cryptographic systems like Bitcoin, identity is bound to private key ownership. Demonstrating control requires signing a message with that key, a process that anyone can verify publicly.

This distinction is clear:

Evidence can be debated, interpreted or challenged.

Cryptographic verification is binary; it either checks out or it does not.

Bitcoin’s verification model does not rely on authority, credentials or expert consensus. It depends on mathematics, not people, institutions or opinion.

Did you know? Early Bitcoin forum posts and the white paper used British spellings like “colour” and “favour.” This sparked theories about Satoshi’s geographic background, though linguists caution that spelling alone can be easily imitated or deliberately altered.

The gold standard: Signing with early keys

The most conclusive proof of being Satoshi would be a public message signed using a private key from one of Bitcoin’s earliest blocks, particularly those associated with Satoshi’s known mining activity in 2009.

Such a signature would be:

Verifiable by anyone using standard tools

Impossible to forge without the actual private key

Free from dependence on courts, media or trusted third parties.

The tools required for such proof are simple, accessible and decisive, yet no one has ever provided it.

Did you know? Satoshi gradually stepped away from public communication in 2010, just as Bitcoin started attracting developers and media attention. Their final known message suggested they had “moved on to other things,” fueling speculation about motive and timing.

Moving early coins: Even more powerful, but improbable

An even stronger demonstration would be transferring Bitcoin from an untouched Satoshi-era wallet. That single onchain action would dispel nearly all doubt.

Yet it carries massive downsides:

Instant worldwide scrutiny

Severe personal security threats

Potential tax, legal and regulatory fallout

Market disruption from anticipated dumps.

The most ironclad proof is also the most disruptive. It makes inaction a rational choice, even for the true creator.

Did you know? Blockchain researchers estimate that early mining patterns linked to Satoshi may represent roughly 1 million BTC, making those dormant wallets some of the most closely watched in crypto history.

Why documents, emails and code don’t settle the ownership

While emails, draft papers, forum posts and code contributions can support a claim, they do not constitute definitive evidence. Such materials can be forged, edited, selectively leaked or misinterpreted.

Code authorship does not prove key control. In Bitcoin, keys define identity, and everything else is secondary. Analysis of emails, draft papers and forum posts may offer intriguing correlations between an individual and Bitcoin, but it lacks certainty. The samples are limited, and styles can overlap or be mimicked.

In social settings or conventional legal disputes, identity can be supported by personal testimony or documentation. However, such evidence is irrelevant within Bitcoin’s decentralized model.

Human memory is fallible, and incentives can be misaligned. Bitcoin was designed specifically to avoid reliance on such factors. Cryptographic proof removes any human role from the verification process.

Why partial proof is not proof

Some claimants offer evidence behind closed doors. However, material shown only to select individuals, or signatures produced using later Bitcoin keys, does not meet the required standard.

To convince the world, proof must be:

Public: Visible to anyone

Reproducible: Independently verifiable

Direct: Tied to Satoshi-era keys.

Anything less leaves room for doubt, which is unacceptable to the Bitcoin community.

For Bitcoin to function, its creator does not need to be known or visible. On the contrary, its decentralization narrative is strengthened by the creator’s absence. There is no founder to defer to, no authority to appeal to and no identity to attack or defend.

While most organizations or projects rely on founders or management teams, Bitcoin functions precisely because identity is irrelevant.

Advertisements for the Super Bowl — the championship game of American football — are some of the most watched and most expensive.

The game on Sunday boasted some 127 million viewers, making it the most-viewed sporting match of the year in the US, as well as the most-watched Super Bowl of all time.

Advertisers pay a premium for the limited number of commercial spots. Some companies shelled out as much as $4 million for a 30-second slot. The high sticker price, as well as the massive audience, drives companies to make their advertisements unique.

But tech industry observers have noted one particular trend in Super Bowl ads: If there’s novel tech all over the ad space, a bubble will soon pop.

Super Bowl ads and bubbles, from dot-coms to crypto

In January 2000, the dot-com boom was in full swing due to the widespread adoption of the internet. At the Super Bowl that year, which became dubbed “the dot-com bowl,” 17 different ads were about the world wide web.

One from trading platform e-Trade featured a 20-second clip of a dancing chimpanzee, followed by a screen that read, “Well, we just wasted 2 million dollars. What are you doing with your money?”

Two months later, the dot-com bubble began a steep decline that lasted until October 2002.

The same happened with the “crypto bowl” in 2022. At Super Bowl LVI, four different crypto companies aired ads: Coinbase, Crypto.com, eToro and FTX.

The now-defunct FTX aired an ad with “Seinfeld” showrunner Larry David, encouraging investors not to “miss out” on crypto. Crypto companies spent an estimated $6.5 million each per 30-second slot that year.

Just months later, the crypto market unraveled. Terra’s stablecoin ecosystem imploded in May. FTX, Celsius, Voyager Digital and BlockFi were insolvent by the year’s end. Genesis followed in January 2023.

The following Super Bowl, only one crypto-related ad appeared: a non-fungible token promotion related to the video game Limit Break. There were none in 2024 and 2025.

Coinbase’s sole crypto ad at Super Bowl LX missed the mark

After a two-year hiatus, one major crypto company has returned to the Super Bowl. Coinbase ran an ad in the form of a karaoke sing-along to the Backstreet Boys, which was also screened on the Sphere in Las Vegas.

Not everyone was thrilled. For many, crypto’s image has not improved since the FTX days. Political streamer Jordan Uhl posted, “From crypto to AI to Trump accounts, every Super Bowl has its own scam ad theme.”

Northwestern University’s Kellogg School of Management publishes formal ratings of Super Bowl ads and puts them in two categories: touchdowns (successful/good advertisements) or fumbles (ineffective/poor advertisements).

The Kellogg survey found that Coinbase’s 2026 ad “failed to establish a clear connection to the brand or its value proposition.” It received an “F.”

But the crypto industry now has some serious legislative victories under its belt. Coinbase’s ad may be a signal that the industry will keep promoting its brands on the largest single night for advertising in the US.

Do Super Bowl ads signal an end to the AI bubble?

While Crypto.com didn’t make any crypto-related advertisements, it did announce its new AI platform, imaginatively named AI.com.

A total of 10 ads at this year’s Super Bowl were about AI. Anthropic boasted its ad-free AI model, Claude. Meta showed off its AI-enabled Oakley smart glasses, and Google’s commercial featured a mother and son furnishing their home with Nano Banana Pro, the company’s AI-enabled image generator.

Amazon debuted its new Alexa+ in an ad with actor Chris Hemsworth, in which he imagines that AI is out to get him, either by closing the garage door on his head or attempting to drown him in the pool.

Svedka Vodka’s 2026 ad revived its “fembot” character that was made primarily with AI. Source: YouTube

The rapid proliferation of AI tech has coincided with eye-watering company valuations and doubt about whether firms like OpenAI will turn a profit. Now, some observers are wondering if the “AI bowl” was a harbinger of an impending bubble burst.

Gary Smith, an economics professor at Pomona College, and Jeffrey Funk, an independent consultant with Carnegie Mellon, wrote on Sunday:

“In this AI bubble, the prices of AI-dependent stocks have become untethered from realistic projections of future profits. LLM-dependent companies such as OpenAI and Anthropic are losing enormous amounts of money yet are given valuations in the hundreds of billions of dollars as if they were real companies making real profits.”

Ads focus on onboarding new users to the technology. Smith and Funk said, “In the absence of profits, the tech bros increasingly emphasize an old metric that was popular during the dot-com bubble: the number of users, with a new flavor.”

Ahead of the Super Bowl, software developer and researcher Carl Brown said, “I don’t know exactly how many AI commercials are going to be in the game this weekend. I already know there will be a lot more than it seems like there ought to be.”

E-Trade may have “wasted” $2 million in 2000, but it was still around to gloat about surviving the dot-com bust the next year. FTX and other smaller crypto platforms went under in 2022, but Coinbase and the Backstreet Boys were playing on the Vegas Sphere this time around.

The AI bubble could burst, but if past patterns point to anything, a few companies will survive — and maybe make a commercial about it.

Magazine: Bitcoin’s ‘biggest bull catalyst’ would be Saylor’s liquidation: Santiment founder

Malicious MEV attacks pose a significant threat to traders on Ethereum. Our latest research shows that almost 2,000 sandwich attacks happen daily and more than $2 million is extracted from the network each month. Even traders who execute large WETH, WBTC or stable swaps remain at risk and can lose a substantial portion of their trades. 

MEV thrives because of the transparent nature of blockchains, where transaction data is visible before transactions are executed and finalized. One path toward mitigating MEV is mempool encryption, particularly through the use of threshold encryption. In our earlier articles, we examined two different models for threshold-encrypted mempools. Shutter, one of the first projects to apply threshold encryption to protect the mempool, introduced a per-epoch setup. Batched threshold encryption (BTE), a newer model, decrypts multiple transactions with a single key to reduce communication costs and raise throughput.

In this piece, we analyze Flash Freezing Flash Boys (F3B) by H. Zhang et al. (2022), a newly proposed threshold encryption design that applies encryption on a per-transaction basis. We explore its mechanics, explain its scaling properties as concerns latency and memory, and discuss the reasons it has not yet been deployed in practice.

How Flash Freezing Flash Boys implements per-transaction encryption

Flash Freezing Flash Boys addresses limitations in early threshold encryption systems that relied on per-epoch setups. Projects such as FairBlock and the early versions of Shutter used a single key to encrypt every transaction within a selected epoch. An epoch is a fixed number of blocks, e.g., 32 blocks on Ethereum. This created a vulnerability where some transactions that fail to be included in the specified block ends would still be decrypted with the rest of the batch. This would expose sensitive data and open up MEV opportunities to validators, thus making them vulnerable to front-running.

F3B applies threshold encryption on a per-transaction basis, which ensures that each transaction remains confidential until it reaches finality. The general flow of the F3B protocol is shown in the figure below. The user encrypts the transaction with a key that only the designated threshold committee, known as the Secret Management Committee (SMC), can access. The transaction ciphertext and the encrypted key are sent to the consensus group as a pair (Step 1). Thus, nodes can store and order transactions while retaining all required decryption metadata for prompt post-finality reconstruction and execution. Meanwhile, the SMC prepares its decryption shares but withholds them until the consensus commits the transaction (Step 2). Once a transaction is finalized and the SMC releases enough valid shares (Step 3), the consensus group decrypts the transaction and executes it (Step 4).

Per-transaction encryption had long remained impractical due to its heavy computational load for encryption and decryption as well as the storage requirement from large encrypted payloads. F3B addresses this by threshold-encrypting only a lightweight symmetric key instead of the full transaction. The transaction itself is encrypted with this symmetric key. This approach can reduce the amount of data that needs to be asymmetrically encrypted by up to ~10 times for a simple swap transaction. 

Comparison of different cryptographic implementations of F3B and their latency overhead

Flash Freezing Flash Boys can be implemented with one of two cryptographic protocols, either TDH2 or PVSS. The difference lies in who bears the setup burden and how often the committee structure is fixed, with corresponding advantages and disadvantages in flexibility, latency and storage overhead.

TDH2 (Threshold Diffie-Hellman 2) relies on a committee that runs a distributed key generation (DKG) process to produce individual key shares along with a collective public key. Then, a user creates a fresh symmetric key, encrypts their transaction with it, and encrypts that symmetric key to the committee’s public key. The consensus group writes this encrypted pair onto the chain. After the chain reaches the required number of confirmations, committee members publish partial decryptions of the encrypted symmetric key together with NIZK (Non-Interactive Zero-Knowledge) proofs, which are required to prevent chosen-ciphertext attacks, where attackers submit malformed ciphertexts to try to trick trustees into leaking information during decryption. NIZKs guarantee the user’s ciphertext is well-formed and decryptable, and also that trustees submitted correct decryption shares.  Consensus verifies the proofs and, once a threshold of valid shares is available, reconstructs and decrypts the symmetric key, decrypts the transaction, and then executes it.

The second scheme, PVSS (Publicly Verifiable Secret Sharing), follows a different path. Instead of the committee running a DKG in every epoch, committee members each have a long-term private key and a corresponding public key, which is stored on the blockchain and accessible to any user. For each transaction, users pick a random polynomial and use Shamir’s secret sharing to generate secret shares, which are then encrypted for each chosen trustee using the respective public key. The symmetric key is obtained by hashing the reconstructed secret. The encrypted shares are each accompanied by an NIZK proof, which allows anyone to verify that all shares were derived from the same secret, along with a public polynomial commitment, a record that binds the share-secret relationship. The subsequent steps of transaction inclusion, post-finality share release, key reconstruction, decryption and execution are similar to those in the TDH2 scheme. 

The TDH2 protocol is more efficient due to a fixed committee and constant-size threshold-encryption data. PVSS, by contrast, gives users more flexibility, since they can select the committee members responsible for their transaction. However, this comes at the cost of larger public-key ciphertexts and higher computational overhead due to per-trustee encryption. In the greater scheme of things, the prototype implementation of the F3B protocol on simulated proof-of-stake Ethereum showed that it has minimal performance overhead. With a committee of 128 trustees, the delay incurred after finality is only 197 ms for TDH2 and 205 ms for PVSS, which is equivalent to 0.026% and 0.027% of Ethereum’s 768-second finality time. Storage overhead is just 80 bytes per transaction for TDH2, while PVSS’s overhead grows linearly with the number of trustees due to per-member shares, proofs and commitments. These results confirm that F3B could deliver its privacy guarantees with negligible impact on Ethereum’s performance and capacity.

Incentives and punishments in the Flash Freezing Flash Boys protocol

F3B incentivizes honest behavior among Secret Management Committee trustees through a staking mechanism with locked collateral. Fees motivate trustees to stay online and maintain the level of performance the protocol requires. A slashing smart contract ensures that if anyone submits proof of a violation, which demonstrates that decryption was performed prematurely, the offending trustee’s stake is forfeited. In TDH2, such proof consists of a trustee’s decryption share that can be publicly verified against the transaction ciphertext. Meanwhile, in PVSS, the proofs consist of a decrypted share together with a trustee-specific NIZK proof that authenticates it. This mechanism penalizes provable premature disclosure of decryption shares, increasing the cost of detectable misbehavior. However, it does not prevent trustees from colluding privately off-chain to reconstruct and decrypt transaction data without publishing any shares. As a result, the protocol still relies on the assumption that majority of committee members behave honestly. 

Because encrypted transactions cannot be executed immediately, another attack vector is for a malicious user to flood the blockchain with non-executable transactions to slow down confirmation times. This is a potential attack surface common to all encrypted mempool schemes. F3B requires that users make a storage deposit for every encrypted transaction, which makes spamming costly. The system deducts the deposit upfront and refunds only part of it when the transaction executes successfully.

Challenges to deploying F3B on Ethereum

Flash Freezing Flash Boys offers a comprehensive cryptographic approach to mitigating MEV, but it is unlikely to see real-world deployment on Ethereum due to the complexity of integration. Although F3B leaves the consensus mechanism untouched and preserves full compatibility with existing smart contracts, it requires modifications to the execution layer to support encrypted transactions and delayed execution. This would require a far broader hard fork than any other update introduced since The Merge.

Nevertheless, F3B represents a valuable research milestone that extends beyond Ethereum. Its trust-minimized mechanism for sharing private transaction data can be applied to both emerging blockchain networks and decentralized applications that require delayed execution. F3B-style protocols can be useful even on sub-second blockchains where lower block times already significantly reduce MEV, to fully eliminate mempool-based front-running. As an example application, F3B could also be used in a sealed-bid auction smart contract, where bidders submit encrypted bids that remain hidden until the bidding phase ends. Thus, bids can be revealed and executed only after the auction deadline, which prevents bid manipulation, front-running or early information leakage. 

Bitcoin’s sharp correction at the start of the month may represent a critical “halfway point” in the current bear market, according to new research from Kaiko Research.

Bitcoin (BTC) fell to $59,930 on Friday, marking its lowest level since October 2024 and before the re-election of US President Donald Trump, according to TradingView data. 

The decline suggests the market has moved out of the euphoric post-halving phase and into what Kaiko described as a historically typical bear market period that lasts roughly 12 months before a new accumulation phase begins.

In a research note shared with Cointelegraph on Monday, Kaiko said Bitcoin’s 32% crash was the most significant correction since the 2024 Bitcoin halving and may mark the “halfway point” of the current bear market.

“Analysis of on-chain metrics and comparative performance across tokens reveals a market approaching critical technical support levels that will determine whether the four-year cycle framework remains intact,” Kaiko said.

Bitcoin halving cycles, all-time chart. Source: Kaiko Research

Related: Trend Research cuts ETH exposure by over 400K as liquidation risk rises

Kaiko’s report highlighted several emerging onchain bear market signals, including a 30% drop in aggregate spot crypto trading volume across the 10 leading centralized exchanges, from around $1 trillion in October 2025 down to $700 billion in November.

At the same time, combined Bitcoin and Ether (ETH) futures open interest declined from $29 billion to $25 billion over the past week, a 14% reduction that Kaiko said reflects ongoing deleveraging.

Open interest for BTC and ETH futures, top 10 exchanges. Source: Kaiko Research

While Bitcoin has realigned with the historical four-year halving cycle since the beginning of the year, determining the depth of the current bear market is complex, as “many catalysts that fueled BTC’s rally to $126,000 are still in effect,” said Shawn Young, chief analyst, MEXC Research.

“With oversold indicators emerging on multiple timeframes, the rebound conversation around BTC is more a question of when, not if,” Young said, adding that Bitcoin may be entering a new cycle that will only become clear over the next year.

Related: Binance adds $300M in Bitcoin to SAFU reserve during market dip

Is $60,000 the bear market bottom?

The key question for investors is whether the dip to $60,000 represents the low of the current bear market. The level roughly aligns with Bitcoin’s 200-week moving average, which has historically acted as long-term support.

However, more market volatility is expected in the absence of crypto-specific market catalysts, Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen, told Cointelegraph, adding:

“With that said, it is still very hard to say if it means we are going back to the conventional 4-year cycle. I have seen many prominent figures in the space air the idea, but equally many who do not think so.”

However, Kaiko pointed to a 52% retracement from Bitcoin’s previous all-time high being “unusually shallow” compared to previous bear market cycles.

A 60% to 68% retracement would “align more closely” with historical drawdowns, which implies a Bitcoin cycle bottom around $40,000 to $50,000, Kaiko said.

Source: Michaël van de Poppe

Still, some market participants argue that $60,000 already marked a local bottom. Analyst and MN Capital founder Michaël van de Poppe called the crash to $60,000 the local market bottom for Bitcoin’s price, citing a record low in investor sentiment and a critical low in the Relative Strength Index, which sank to values last seen in 2018 and 2020.

Magazine: Would Bitcoin survive a 10-year power outage?

Bitcoin (BTC) eyed multiday lows into Tuesday’s Wall Street open as analysis warned that bears were trying to “regain control.”

Key points:

Bitcoin is setting up a support retest at the bottom of its local range, says analysis.

Bears want “control” again, with liquidations impacting both long and short traders.

An ongoing lack of demand is adding to Bitcoin bulls’ problems.

Bears battle for local BTC price trend

Data from TradingView recorded 2.3% daily BTC price losses, with $68,500 now a focus.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

Part of a narrow local trading range, the level still held significance for market participants eyeing liquidations on exchanges.

These remained high despite relatively calm price behavior, with the 24 hours to the time of writing seeing over $250 million across crypto, per data from CoinGlass.

Crypto liquidations (screenshot). Source: CoinGlass

“$BTC pumped to $71,000 yesterday liquidating $130M shorts. Then, $BTC dumps straight back to $68,000 liquidating another $150M longs,” CryptoReviewing, the pseudonymous cofounder of trading community Wealth Capital, wrote in a post on X. 

“Now, above at $72,000 - $74,000 we still have large liquidity waiting to be taken. However, at $66,000 - $68,000 we have even larger leveraged liquidity building up making this the higher-probability zone for a sweep next.”

BTC liquidation heatmap. Source: CryptoReviewing/X

An accompanying chart captured the high-stakes liquidation potential both above and below spot price.

“Bears are attempting to regain control,” CryptoReviewing added.

Earlier, trading resource Material Indicators warned that Bitcoin was due a low-time frame support retest.

“FireCharts binned CVD shows purple whales continued selling over the last 24 hours,” it told X followers, referencing one of its proprietary trading tools. 

“Things are setting up for $BTC to grind its way into a retest of local support.”

BTC/USDT order-book data with whale activity. Source: Material Indicators/X

Bitcoin faces “weakening” seller absorption

Continuing on the return of sellers, onchain analytics platform CryptoQuant warned of a lack of fresh investor capital to balance exchange inflows.

Bitcoin appeared caught in a downward spiral thanks to a lack of “apparent demand growth.”

“Despite the increase in coins being spent, fresh capital inflows are not expanding at the same pace,” contributor CryptoZeno wrote in a “Quicktake” blog post Tuesday.

“Demand has slipped into negative territory, signaling that the market’s ability to absorb distributed supply is weakening. Similar divergences in prior cycles often marked transition phases where bullish momentum slowed before either consolidation or correction unfolded.”

Bitcoin demand momentum (screenshot). Source: CryptoQuant

Earlier, Cointelegraph reported on upheaval among Bitcoin miners as they upped inflows to exchanges in order to cover expenses.

Expectations of a lengthy Bitcoin bear market, meanwhile, continue to gain popularity.

Bitcoin (BTC) has entered the “darkest days” of its bear market correction, based on a classic BTC price indicator hitting near four-year lows.

Key takeaways:

Bitcoin Mayer Multiple fell to 0.65, matching deep bear market lows in May 2022.

A repeat of 2022 would see BTC drop further to as low as $40,000. 

Mayer Multiple returns to May 2022 levels

Bitcoin’s 45% crash from its $126,000 peak has placed onchain indicators in focus as market participants search for where BTC price is likely to bottom. 

The Mayer Multiple is among the indicators suggesting that a bottom could be reached soon.

In a post on X on Tuesday, analyst On-Chain College said that the Bitcoin Mayer Multiple score had dropped to levels “usually reserved for deep bear market corrections.”

Related: BTC traders wait for $50K bottom: Five things to know in Bitcoin this week

The indicator measures Bitcoin’s current price against its 200-day moving average, and the resulting ratio is used as a buy or sell signal. Its creator, Trace Mayer, originally gave a reading of below 2.4 as “buy” territory, the red line in the chart below.

Data from on-chain analytics firm Glassnode shows that as of Feb. 9, the Mayer Multiple measured 0.65, below its “oversold” 0.8 level (green band), a reading last seen in May 2022.

Bitcoin Mayer Multiple. Source: Glassnode

“Bitcoin is now officially under the green band of the Mayer Multiple Z-Score, which is usually reserved for deep bear market corrections,” On-Chain College wrote, adding:

“It can still take months before finding a bottom, but BTC is in a period in history typically reserved for the darkest days of bear markets.”

Bitcoin Mayer Multiple. Source: On-Chain College

Levels like this have historically marked some of Bitcoin’s best long-term buying opportunities.

The Mayer Multiple at 0.6 means that Bitcoin is trading 40% below its 200-day MA, analyst CryptosRus said in a Sunday X post, adding:

“This doesn’t happen during normal pullbacks. It only shows up during full-blown capitulation.”

“Historically, being below this level is exactly where I want to be stacking,” said analyst On-Chain Mind, while Capriole Investments founder Charles Edwards said: 

“This is historically one of the best buy signals in Bitcoin history.”

Source: Charles Edrwads

Extreme lows in the Mayer Multiple do not always correspond to BTC price floors. In mid-2022, the indicator bottomed at around 0.47. But the BTC/USD pair dropped another 58% over the following four months before reaching the bottom at $15,500.

Where is Bitcoin’s real bottom?

As Cointelegraph continues to report, the question of whether Bitcoin price has already hit its bottom below $60,000 remains a topic of debate as several metrics still suggest that BTC’s downside may not be over. 

The 200-week MA, currently at $58,000, is often considered the ultimate support level for Bitcoin in bear markets. This level is approximately 15% below the current price.

Historically, BTC/USD has dropped to this level in extreme bearish conditions, but has rarely dropped below it except in 2020 and 2022, with losses averaging 30%.

Bitcoin technical pricing models. Source: Glassnode

Therefore, Bitcoin could drop lower to retest the 200-day MA at $58,000, but in extreme cases, it could fall another 30% toward the $40,000 zone.

This target is reasonable based on the relative strength index (RSI), which can still drop another 55% from its 37 mark, bringing Bitcoin to the lower $40,000 region, said Jelle in a recent analysis on X. 

Historically, the lows have been less deep, making 55% an “extreme” dip, the analyst said, adding that 40% below the RSI’s 37 level would be in line with the last two bottoms, which would be around $52,000 before summer.

“There's decent confluence around that area for me to at least pay close attention to the low $50Ks.”

BTC/USD weekly chart. Source: Jelle

As Cointelegraph reported, Bitcoin could find a “real bottom” around $50,000 in a repeat of the 2022 bear market.

Opinion by: Emir J. Phillips, associate professor of finance, economics and business law at Lincoln University of Missouri

A stablecoin’s “peg” is no longer a branding contest about being “fully backed.” It is becoming a quasi-constitutional question: In a panic, who has the enforceable right — and practical ability — to redeem at par, on demand, with reserves that stay reachable when trust collapses?

The next stablecoin crisis will not be decided by reserve existence; it will be decided by reserve access and legal priority.

The market already watched this movie during the Silicon Valley Bank weekend in March 2023, when USDC (USDC) traded off-par after Circle disclosed that part of its reserves were temporarily stuck at SVB. The Federal Reserve later treated that episode as a concrete case where secondary-market pricing reflected friction in redemption rails, not an abstract debate over whether collateral existed.

That experience is now being written into law. The United States and the European Union are hard-coding what a “$1” claim means and what it must do in stress. In the US, the GENIUS Act sets a perimeter for “payment stablecoins,” tightens reserve expectations and bans yield-for-holding. In Europe, the Markets in Crypto-Assets (MiCA) regulation classifies “stablecoins” into legal species and hard-wires redemption duties while imposing explicit brakes once a token starts functioning like a mass payments rail.

A two-tier market

Here is the contentious claim: These regimes are not only “stabilizing” stablecoins; they are engineering a two-tier market. The strictest designs will look like cash because convertibility is protected by statute, supervision and reserve discipline. Everything else will still trade at $1 in calm markets, but it will reprice like credit in a panic.

The GENIUS Act reflects an American instinct: Draw a bright line between money and investment, and then police that boundary. The non-negotiable element is the “no interest” clause: No issuer is supposed to turn a payment stablecoin into an internet-scale shadow deposit by paying yield simply for holding. That ban is not moralizing; it is run prevention. If digital cash pays yield, it stops behaving like cash and starts behaving like a bank deposit without insurance. The policy fight is already shifting to the edges: rewards programs, wrappers and indirect “benefits” that can mimic interest.

MiCA reflects a European instinct: Define the instrument, and then constitutionalize the redemption right. For e-money tokens, the at-par promise is written as a holder’s claim enforceable at any time. MiCA also signals a fear regulators rarely say out loud: Scale changes the physics. Once a stablecoin becomes a ubiquitous medium of exchange, Europe reserves the right to slow it down, treating excessive transaction volume as a financial stability event, not an adoption milestone. Cointelegraph’s reporting on MiCA’s stablecoin limits captures the tensions this creates for listings and payments use.

Clarity is needed around stablecoins

The most explosive, still-unsettled question is cross-border “multi-issuance”: one stablecoin brand marketed as interchangeable but issued by multiple legal entities across jurisdictions.

In a global run, the strongest legal perimeter becomes a magnet, as everyone tries to redeem where rights are best. That can overwhelm the reserves and operational capacity behind the “best” jurisdiction — even if the brand looks global and unified on the surface. The Bank of Italy urged clarity on multi-issuance standards, while EU institutions debated whether interchangeability could embed financial-stability risks. Multi-issuance can also become a run risk in disguise.

The two-tier future of stablecoins

Put together, 2026 will likely sort stablecoins into tiers.

Tier-1 tokens will be constitutional cash: clear redemption rights, high-quality liquid reserves, frequent disclosure/examination and tight rules against yield-for-holding.

Tier 2 will be synthetic cash: wrappers, reward programs and perimeter arbitrage that behave like money during calm conditions and behave like risk assets when redemption becomes crowded.

The practical move is to rate stablecoins the way credit markets rate claims: by legal priority and liquidity under stress. Ask whether redemption is a right for all holders, at par, at any time; whether reserves are engineered for fire-sale liquidity and, just as important, whether they can be accessed when banks fail or wires freeze; whether “yield” is prohibited in substance or merely repackaged through rewards and wrappers; and whether cross-border structure creates a run magnet where one jurisdiction is asked to backstop a global brand.

Stablecoins are becoming institutions. Crypto spent a decade asking whether code could become law. Stablecoins are proving the inverse: Law is becoming the code that determines whether a peg survives. The GENIUS Act and MiCA are competing constitutions for internet settlement — different instincts about yield, scale and cross-border spillovers. The next stress event will not reward the loudest narrative; it will reward the issuer whose convertibility survives the night nobody sleeps.

Opinion by: Emir J. Phillips, associate professor of finance, economics and business law at Lincoln University of Missouri.

Bitcoin ETF blowup shortlists a handful of Hong Kong funds

A popular theory explaining Bitcoins recent selloff points to an Asian fund whose leveraged spot Bitcoin exchange-traded fund (ETF) options trade blew up.

Parker White, chief of operations and investments at DeFi Development Corp, said in a viral tweet that a Hong Kong-based company is believed to have used cheap Japanese yen funding before being forced into liquidation across multiple markets.

BlackRocks Bitcoin ETF (IBIT) posted a record $10 billion trading volume on Thursday, when Bitcoin slid to its lowest level of the week near $60,000. Liquidations on centralized cryptocurrency exchanges remained relatively muted despite the sell-off, which White said suggested stress from large IBIT holders.

Franklin Bi, general partner at Pantera Capital, shared a similar theory explaining why it has largely flown under the crypto radar. (Franklin Bi)

White found that some Hong Kong funds hold the bulk of their assets in IBIT. Funds typically diversify holdings, while single-asset structures are often used to isolate margin risk so losses dont contaminate other investments.

Based on that context, the theory holds that a fund borrowed cheap yen to buy IBIT options and bet on Bitcoins rebound. As losses mounted and funding conditions tightened, the position may have been forced to unwind.

The IBIT blowup hypothesis links the activity to a broader cross-asset margin unwind tied to yen-funded leverage, with silver which also plunged on Thursday cited as one example.

We know that Asian traders, particularly in China, have been deeply involved in the Silver and Gold trade, White said. We also know that the JPY carry trade has been unwinding at an increasingly rapid pace.

Whites theory has been cited by media outlets and widely shared across Crypto Twitter, but it remains unproven. The industry will likely have to wait until May, when Form 13F filings for the first quarter are released, to determine whether any funds disclose significant changes in IBIT holdings.

Bithumbs fat thumb sent more Bitcoin than it had

South Korean crypto exchange Bithumb is facing questions over so-called phantom Bitcoins after an administrative error distributed far more rewards to users than intended.

A Bithumb promotional campaign mistakenly sent more than 2,000 Bitcoin to each winner. In total, it mistakenly distributed roughly 620,000 Bitcoin, an amount worth nearly $42.5 billion at current prices.

Bithumb said it recovered 99.7% of those assets. However, some users managed to flip 1,788 Bitcoin before the exchange clawed them back.

A more troubling issue has emerged beyond the scale of the error. In a mid-year filing submitted in August to the Financial Supervisory Service (FSS), Bithumb reported holding approximately 42,031 Bitcoin. That figure is about 15 times less than the amount distributed during the incident.

Bithumb had way less Bitcoin than it recently distributed in its mid-year report. (FSS)

If the exchange did not accumulate 577,969 BTC after the filing, then Bithumb distributed more cryptocurrency to user accounts on its platform than it actually holds. Because some users were able to immediately sell the supposedly non-existent assets, the local industry has dubbed the incident Bithumbs phantom Bitcoin case.

Under South Koreas crypto user protection law, exchanges are required to hold the assets deposited by customers. FSS governor Lee Chan-jin said regulatory action may be possible under existing rules. The regulator has since launched on-site inspections following the incident.

Read also

Features Thailands Crypto Utopia 90% of a cult, without all the weird stuff

Features GENIUS Act reopens the door for a Meta stablecoin, but will it work?

The rise and fall of Ethereum whale Trend Research

Ethereum whale Trend Research has sold off all of its Ether, leaving just $10,000 in USDC across wallets tracked by Arkham.

As of last weeks Asia Express, Trend Research had already reduced its Ether exposure by 73,000 ETH, largely held as Aave wrapped Ether. Despite those sales, the firm still held 578,000 ETH as of last Monday. Over the week, Trend Research continued selling Ether to unwind leveraged positions. By Sunday, its Ether balance fell to zero.

Trend Research has been linked to Yi Lihua, also known as Jack Yi, the founder of Hong Kong-based crypto venture firm Liquid Capital. The firm first drew the attention of blockchain analysts in November after aggressively accumulating Ether. By the end of January, it held roughly 651,000 AWETH.

One of the most aggressive Ether buyers became the most aggressive seller when prices dropped. (Arkham)

Yi built the position through leverage. He purchased Ether on centralized exchanges, deposited it into Aave as collateral and borrowed stablecoins, which were then used to buy additional ETH. When Ether prices declined alongside Bitcoin and the broader crypto market, Trend Research was forced to unwind its position to repay its loans.

While the firm no longer holds ETH or AWETH, a machine-translated post from Yi claimed that he believes cryptos broader consensus remains intact.

On the flip side, when crypto enters a bear market, it is often the best time to build positions, just as we benefited in the previous cycle by accumulating during the bear market, Yi wrote.

Pessimists are often right, but optimists win in the end, he added.

Read also

Features Why Virtual Reality Needs Blockchain: Economics, Permanence and Scarcity

Features Capitalisms Perestroika Moment: Bitcoin Rises as Economic Centralization Falls

Japans snap election landslide keeps crypto on track

Japans Lower House snap election on Sunday handed a two-thirds super-majority to the Liberal Democratic Party under Prime Minister Sanae Takaichi, reducing uncertainty around ongoing crypto policy discussions.

Those discussions include proposals to revise crypto tax treatment and to review whether digital assets should remain regulated under the Payment Services Act or transition to the Financial Instruments and Exchange Act.

The tax debate centers on how crypto gains are classified under the income tax system. Currently, most individual crypto gains are treated as miscellaneous income and taxed up to 55%. Lawmakers have been discussing whether crypto gains should instead be taxed under a separate flat-rate framework similar to securities, which are taxed at around 20%.

The Japanese yen has been free-falling but bounced up on Takaichis landslide victory. (TradingView)

Japans tax discussions are tied to broader questions about how crypto should be legally categorized.

Moving crypto to the Financial Instruments and Exchange Act would place digital assets within the same legal framework that governs ETFs and other investment products, making crypto ETFs legally possible in Japan.

Japans government has also signaled interest in developing market infrastructure that could support such products if permitted. Finance Minister Satsuki Katayama said in her New Year speech that Japan should pursue blockchain-based fintech initiatives, like ETFs.

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A built-in messaging feature in the Phantom crypto wallet is drawing scrutiny from security researchers after an investor lost about $264,000 worth of Wrapped Bitcoin in what investigators described as a phishing attack enabled by address poisoning.

Blockchain investigator ZachXBT shared blockchain data pointing to a victim losing 3.5 Wrapped Bitcoin (wBTC) in a suspected phishing attack tied to Phantom Chat.

The data shows a transaction where 3.5 WBTC was transferred from address “0x85c” to address “0x4b7” on Wednesday, flagged as a “high balance” address on blockchain intelligence platform Nansen. The transaction pattern is consistent with address poisoning, a phishing technique that exploits users’ transaction histories rather than compromising private keys.

Scammers trick victims into sending crypto to illicit wallets by first sending them small transactions and hoping unsuspecting users copy and paste the attacker’s address from their history.

ZachXBT urged Phantom to upgrade its user interface, calling the messenger feature a “new method for people to get drained,“ and warning that the app’s user interface did not filter out spam transactions to avoid users falling victim to address poisoning scams.

Wallet “0x85c,” transactions. Source: Nansen

X user Kill4h also reported falling victim to two address poisoning attacks through the messenger feature, sharing a screenshot of two blockchain transactions woorth $136 and $101 in USDC (USDC), respectively.

Related: Fake MetaMask 2FA security checks lure users into sharing recovery phrases

The unfortunate incident is the latest reminder of the importance of crypto wallet user experience for the safety of investors.

Leading crypto industry figures, including Binance co-founder Changpeng Zhao, have previously called for better wallet security measures to avoid phishing scams, after an investor lost $50 million in an address poisoning scam in December 2025.

“All wallets should simply check if a receiving address is a ‘poison address,’ and block the user. This is a blockchain query,“ wrote Zhao in a blog post in December, adding:

“Lastly, wallets should not even display these spam transactions anywhere. If the value of the tx is small, just filter it out.“

To avoid common crypto scams, Phantom recommends that users assume any unsolicited tokens or NFTs sent to their wallet are part of a scam and urges users never to click on links in paid Google search results or social media platforms promising free airdrops.

Cointelegraph has reached out to Phantom for comment on the incident and details on future user interface upgrades.

Scammers are sending copycat tokens to unsuspecting investors. Source: Phantom

Phantom announced the launch of its live chat feature across tokens, perpetual futures and predictions pages on Dec. 23.

Related: TRM Labs completes $70M investment round at $1B, becomes crypto unicorn

Crypto investors need better onchain security practices: cybersecurity experts

While spam filtering from crypto applications can reduce the risk of address poisoning attacks, users need to stop copying wallet addresses from their transaction history, urged security firm Hacken’s Extractor team.

“Web3 users have to maintain a single source of truth for recipient addresses (Address Book / List).“

Hacken also pointed to a 12.3 million Ether (ETH) address poisoning attack suffered by a wallet linked to Galaxy Digital on Jan. 30, serving as a reminder that even institutional participants can fall victim to these scams.

While improved transaction practices can help avoid these scams, the crypto industry needs pre-emptive security alerts to eradicate poisoning attacks, Deddy Lavid, the CEO of blockchain cybersecurity company Cyvers, told Cointelegraph:

“Real protection requires pre-transaction risk checks, address similarity detection, and clear warnings before users sign.“

Users may also opt for wallets that provide real-time “firewall-style security simulation“ that shows how a transaction would occur before executed, explained the CEO.

Wallets that offer preemptive tools to filter for malicious transactions ahead of approval include the Rabby Wallet, Zengo Wallet and Phantom Wallet.

Magazine: Meet the onchain crypto detectives fighting crime better than the cops

The United Kingdom’s financial watchdog has launched court action against cryptocurrency exchange HTX, alleging it illegally promoted crypto asset services to British consumers in breach of financial advertising rules.

The UK Financial Conduct Authority (FCA) said it began proceedings against HTX and several related persons in the Chancery Division of the High Court in October 2025.

In an update published Tuesday, the regulator said it received permission on Feb. 4 to serve the case outside the UK and by alternative means, noting that HTX (formerly known as Huobi Global) is incorporated in Panama.

The legal action comes under the FCA’s Financial Promotions (FinProm) Regime, which it adopted in October 2023, which tightened requirements on how crypto firms can market their services to UK consumers.

FCA previously warned about HTX’s illegal promotions

“Firms providing crypto products to UK consumers need to comply with rules which protect consumers from unfair and misleading marketing,” the regulator said. It added that advertising crypto assets on social media or websites without complying with these rules is a criminal offense.

The FCA had previously warned about HTX’s illegal promotion of crypto services to UK consumers, the statement added.

“However, it has continued to publish financial promotions in breach of these rules on its website and on social media platforms, including TikTok, X, Facebook, Instagram and YouTube,” the authority said.

FCA’s announcement on taking action against HTX (formerly known as Huobi Global). Source: FCA

‘“Our rules are designed to support a sustainable and competitive crypto market in the UK, ensuring that consumers have what they need to make informed decisions,” said Steve Smart, joint executive director of enforcement and market oversight at the FCA.

“HTX’s conduct stands in stark contrast to the majority of firms working to comply with the FCA’s regime. This is the first time we’ve taken enforcement action against a crypto firm illegally marketing their products to UK consumers,” he added.

We’ll continue to act against firms who ignore our rules.”

The FCA also requested that social media companies block HTX’s social media accounts to UK-based consumers and requested the removal of HTX applications from Google Play and Apple Stores in the UK.

The regulator has also put the company on its Warning List, warning consumers that they are not protected by the UK government if they have a complaint against HTX.

Cointelegraph reached out to HTX for comment on the FCA’s action, but had not received a response by publication.

Magazine: Bitcoin difficulty plunges, Buterin sells off Ethereum: Hodler’s Digest, Feb. 1 – 7

Publicly listed companies that hold Solana as a treasury asset are sitting on more than $1.5 billion in unrealized losses, based on disclosed acquisition costs and current market prices tracked by CoinGecko.

The losses are concentrated among a small group of United States-listed companies that collectively control over 12 million Solana (SOL) tokens, about 2% of the total supply. While losses remain unrealized, equity markets have already repriced the firms, with most trading well below the market value of their tokens. 

CoinGecko data shows that Forward Industries, Sharps Technology, DeFi Development Corp and Upexi account for over $1.4 billion in disclosed unrealized losses. The total is likely understated, as Solana Company has not fully disclosed its acquisition costs.

The figures highlight a growing gap between paper losses and liquidity pressure. While none of the companies have been forced to sell their SOL, compressed net asset value (mNAV) multiples and falling share prices have constrained their ability to raise fresh capital.

Top five Solana treasury companies by holdings. Source: CoinGecko

Accumulation stalls across Solana treasuries

Transaction data compiled by CoinGecko shows that the bulk of SOL accumulation occurred between July and October 2025, when several companies made large, concentrated purchases. 

Since then, none of the top five Solana treasury companies have disclosed meaningful new buys, and no onchain sales have been recorded. 

Forward Industries, the largest holder, accumulated over 6.9 million SOL at an average cost of roughly $230. With SOL trading around $84, Forward has unrealized losses of over $1 billion. 

Sharps Technology made a single $389 million purchase near the market peak. The company’s SOL is now worth about $169 million, down over 56% from its acquisition cost. 

DeFi Development Corp followed a more gradual accumulation strategy and reports smaller losses, but its shares still trade below the value of its SOL holdings.

Solana Company, which built a 2.3 million SOL position over several tranches of purchases, has also paused accumulation since October, according to CoinGecko’s transaction history.

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Equity markets signal a treasury winter

Equity price data from Google Finance shows that the top five Solana treasury companies have suffered sharp drawdowns in the last six months, significantly underperforming SOL itself. 

Forward Industries, DeFi Development Corp, Sharps Technology and Solana Company stock prices are down between 59% and 73% in the six-month charts. 

Six-month price chart of Forward Industries. Source: Google Finance

CoinGecko data shows that Upexi has $130 million in unrealized losses on its SOL holdings. However, its shares have fallen more sharply than its peers. 

Upexi shares are down more than 80% over the past six months, according to Google Finance. Like other Solana treasury firms, Upexi has paused new accumulation since September.

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South Korea’s financial watchdog has opened an investigation into Bithumb after the exchange mistakenly credited hundreds of thousands of Bitcoin to user accounts that it did not actually hold.

The Financial Supervisory Service (FSS) has launched a probe into Bithumb for alleged platform violations around the erroneous crediting of billions of dollars in non-existent Bitcoin (BTC) to user accounts, Yonhap News reported Tuesday.

Bithumb acknowledged the incident on Saturday, saying the platform “incorrectly paid” 620,000 BTC ($42.8 billion) to users during a promotional event.

While the exchange recovered most of the miscredited BTC, around 125 BTC ($8.6 million) remains unsettled, raising questions about operational risks at centralized exchanges (CEXs) and fueling community concerns over “paper Bitcoin.”

Authorities point to multiple alleged violations by Bithumb

Although Bithumb said the incident did not result in any loss or damage to customer assets, South Korea’s financial authorities have flagged its potential implications for the broader market.

“We are taking this case very seriously,” an FSS official reportedly said, adding: “The FSS will take stern legal actions against acts that harm the market order.”

Bithumb confirmed “incorrect payment” of 620,000 BTC on Saturday. Source: Bithumb

The regulator highlighted Bithumb’s alleged violations, including mismatches between crypto held in its wallets and amounts credited to user accounts.

The FSS also cited deficiencies in Bithumb’s internal controls, noting that the error stemmed from a single point of failure — one staff member was reportedly responsible for the incorrect BTC crediting.

“Paper Bitcoin” concerns intensify

“The 620,000 BTC were not ‘real’ Bitcoin,” CryptoQuant analyst Maartunn told Cointelegraph, adding that the credited BTC existed purely in a virtual form and were visible only within Bithumb’s internal systems.

The exchange’s promotional event, which was intended to reward users with 2,000 South Korean won ($1.4), resulted in 2,000 BTC per user due to an employee mistakenly entering “BTC” as the currency unit instead of “won,” he said.

“To put in into perspective, Bithumb currently holds around 41,798 BTC in reserves, far less than the virtual 620,000 BTC that shortly existed on its books,” Maartunn said, adding that some users did benefit from the incident:

“Around that time, 3,875 BTC, or around $268 million, were withdrawn from the exchange. This may partly reflect users who managed to withdraw the mistakenly credited BTC, but it could also indicate a broader loss of confidence among other users.”

The figures reported by Bithumb are therefore lower than what the on-chain data suggests, Maartunn said.

Cointelegraph approached the FSS and Bithumb for comment regarding the reported investigation, but had not received a response by publication.

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Bithumb’s news adds to growing community concerns over “paper Bitcoin,” or Bitcoin that does not exist on the blockchain but is traded on CEXs or stock exchanges in the form of products like derivatives and exchange-traded funds.

Some even suggested that paper Bitcoin trading has contributed to the ongoing market turmoil, with Bitcoin losing around 43% of its value since October 2025.

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A dual national of China and St. Kitts and Nevis has been sentenced to 20 years in US federal prison for orchestrating a global cryptocurrency scam that stole more than $73 million from victims, many of them American investors.

Forty-two-year-old Daren Li received the statutory maximum sentence in the Central District of California, along with three years of supervised release, according to a statement issued Tuesday by the US Department of Justice (DOJ).

Prosecutors said Li and at least eight co-conspirators established spoofed domains and websites resembling legitimate trading platforms to promote fraudulent crypto investments after gaining victims’ trust, a scheme known as pig butchering or phishing scams.

Court filings show the conspirators often initiated contact through social media platforms and dating apps, cultivating professional or romantic relationships before persuading victims to transfer funds into accounts controlled by the group.

“The Court’s sentence reflects the gravity of Li’s conduct, which caused devastating losses to victims throughout our country,” said Assistant Attorney General A. Tysen Duva, adding that authorities would “work with our law enforcement partners around the world to ensure that Li is returned to the United States to serve his full sentence.”

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Li is the first defendant to be sentenced. Eight other co-conspirators have pleaded guilty and await sentencing.

Li admitted that he and his co-conspirators tricked victims into transferring at least $73.6 million in funds to bank accounts associated with the defendants, including $59.8 million from US shell companies that laundered victim funds.

The sentencing comes more than a year after Li pleaded guilty to conspiring with others to launder funds obtained from victims through crypto scams and fraud, Cointelegraph reported in November 2024.

Daren Li admitted he helped associates launder millions in funds stolen through various crypto scams. Source: CourtListener 

The investigation remains ongoing and is being led by the US Secret Service Global Investigative Operations Center, with assistance from Homeland Security Investigations’ El Camino Real Financial Crimes Task Force and the US Marshals Service, among other agencies.

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Crypto scams see resurgence at the start of 2026

Crypto scams and phishing incidents saw an uptick in January, when scammers stole $370 million, the highest monthly figure in 11 months, according to crypto security company CertiK.

Notably, $311 million of the total figure was attributed to phishing scams, after a victim lost around $284 million due to a particularly damaging social engineering scam.

Source: CertiK

The $370 million marked the largest monthly loss since February 2025, when attackers netted around $1.5 billion in total value stolen, with the majority due to the $1.4 billion Bybit exchange hack.

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