Cointelegraph

Binance added another $300 million worth of Bitcoin to its emergency reserves on Monday, continuing its experiment with a Bitcoin-backed protection fund as markets remain under pressure.

Binance bought another 4,225 Bitcoin (BTC) worth $300 million for its Secure Asset Fund for Users (SAFU) wallet, which holds its emergency reserves, according to blockchain data platform Arkham.

The acquisition lifts the fund’s Bitcoin holdings to more than $720 million at current prices.

“We’re continuing to acquire #Bitcoin for the SAFU fund, aiming to complete conversion of the fund within 30 days of our original announcement,” wrote Binance in a Monday X post.

While the acquisition is a sign of confidence in Bitcoin by the world’s largest exchange, it also exposes Binance’s emergency fund to downside volatility of Bitcoin’s price swings, which could reduce the fund’s total value.

Binance SAFU Fund. Source: Arkham

Binance first announced shifting $1 billion of its user protection fund into Bitcoin on Jan. 30, framing it as an expression of its conviction in Bitcoin’s long-term prospects as the leading crypto asset.

Binance said it would rebalance the fund back up to $1 billon if the market volatility drove its value below $800 million.

Related: BitMine nears $7B in unrealized losses as Ether downturn pressures treasury firms

Fragile sentiment weighs on markets

Binance’s fund conversion occurs amid a wider crypto market correction, which saw Bitcoin’s price sink to $59,930 on Friday, a price level last seen in October 2024 before the re-election of US President Donald Trump, according to TradingView.

BTC/USD, 2-year chart, weekly timeframe. Source: Cointelegraph/TradingView

Meanwhile, Bitcoin investor sentiment remains “fragile,” threatening more downside in the absence of positive market catalysts, Hina Sattar Joshi, director for digital assets at liquidity and data solutions platform TP ICAP, told Cointelegraph.

“Sentiment is currently very fragile, with investors anchoring themselves to the traditional four-year Bitcoin cycle, in which Bitcoin’s price historically follows a recurring pattern of ‘boom and bust.’”

The industry’s best traders by returns, tracked as “smart money,” also continue betting on more crypto market downside.

Smart money trader positions through the Hyperliquid exchange, top tokens. Source: Nansen

Smart money traders added $7.38 million worth of leveraged short positions and were net short on Bitcoin for a cumulative $109 million, according to crypto intelligence platform Nansen.

Smart money traders were betting on the price decline of most of the leading cryptocurrencies, except Avalanche (AVAX), which had $7.38 million in cumulative long positions.

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Ethereum co-founder Vitalik Buterin drew a clear boundary around what he considers “real” decentralized finance (DeFi), pushing back against yield-driven stablecoin strategies that he says fail to meaningfully transform risk. 

In a discussion on X, Buterin said that DeFi derives its value from changing how risk is allocated and managed, not simply from generating yield on centralized assets. 

Buterin’s comments come amid renewed scrutiny over DeFi’s dominant use cases, particularly in lending markets built around fiat-backed stablecoins like USDC (USDC). 

While he did not name specific protocols, Buterin took aim at what he described as “USDC yield” products, saying they depend heavily on centralized issuers while offering little reduction in issuer or counterparty risk.

Source: Vitalik Buterin

Two stablecoin paths outlined

Buterin outlined two paths that he considers to be more aligned with DeFi’s original ethos: an Ether (ETH)-backed algorithmic stablecoin and a real-world asset (RWA) backed algorithmic stablecoin that is overcollateralized. 

In an ETH-backed algorithmic stablecoin, he said that even if most of a stablecoin’s liquidity comes from users who mint the token by borrowing against crypto collateral, the key innovation is that risk can be shifted to markets rather than a single issuer. 

“The fact that you have the ability to punt the counterparty risk on the dollars to a market maker is still a big feature,” he said.

Buterin said that stablecoins backed by RWAs could still improve risk outcomes if they are conservatively structured. 

He said that if such a stablecoin is sufficiently overcollateralized and diversified so that the failure of a single backing asset would not break the peg, the risk faced by holders would still be meaningfully reduced.

USDC dominates DeFi lending

Buterin’s comments land as lending markets across Ethereum remain heavily centered on USDC.

On Aave’s main Ethereum deployment, more than $4.1 billion worth of USDC is currently supplied out of a total market size of about $36.4 billion, with roughly $2.77 billion borrowed, according to protocol dashboard data.

USDC reserve status and configuration. Source: Aave

A similar pattern appears on Morpho, which optimizes lending across Aave and Compound-based markets. 

On Morpho’s borrow markets, three of the five largest markets by size are denominated in USDC, typically backed by collateral like wrapped Bitcoin or Ether. The top borrowing market lends USDC and has a market size of $510 million.

On Compound, USDC remains one of the protocol’s most used assets, with about $382 million in assets earning yield and $281 million borrowed. This is supported by roughly $536 million in collateral. 

Related: CFTC expands payment stablecoin criteria to include national trust banks

Buterin’s call for decentralized stablecoins

Buterin’s critique does not reject stablecoins outright but questions whether today’s dominant lending models deliver the decentralization of risk that DeFi promises.

The comments also build on earlier critiques he made about the structure of today's stablecoin market. 

On Jan. 12, he argued that Ethereum needs more resilient decentralized stablecoins, warning against designs that rely too heavily on centralized issuers and a single fiat currency. 

At the time, he said stablecoins should be able to survive long-term macro risks, including currency instability and state-level failures, while remaining resistant to oracle manipulation and protocol errors. 

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Bitcoin (BTC) rebounded 17% to trade near $70,000 on Monday, from its 15-month low below $60,000, as whales took advantage of discounted prices to accumulate. 

Key takeaways:

Large investors have bought the dip to $60,000, adding at least 40,000 BTC.

Bitcoin’s downside risks remain as buyers fail to push the price above $72,000.

BTC/USD hourly chart. Source: Cointelegraph/TradingView

Bitcoin whales snap up 40,000 BTC on price dip

Market participants have observed deliberate posturing by whales, with analysis suggesting they played an important role in the latest BTC price recovery. 

Whales have been accumulating massive amounts of Bitcoin during the recent drop, accumulating about 40,000 BTC, according to Glassnode.

The chart below reveals that addresses holding 1,000-10,000 BTC have added 22,000 BTC since Friday, while those with 10,000-100,000 BTC acquired about 18,000 BTC over the same period.

Bitcoin: supply held in whale addresses. Source: Glassnode

The accumulation by whales was followed by Bitcoin’s 20% rebound to $72,000 from its 15-month low below $60,000 reached on Friday.

Bitcoin’s recovery was also fueled by buying from Binance’s Secure Asset Fund for Users (SAFU), which has added another 4,225 BTC worth $300 million.

The SAFU BTC address now holds 10,455 BTC worth $731 million, leaving about $239 million more to be converted.

Source: X/Binance

As Cointelegraph reported, US-based spot Bitcoin ETFs investors also bought the dip, with $331 million flowing into these investment products on Friday.

Whales fail to push BTC price above $72,000

In January, Cointelegraph reported similar activity when Bitcoin whales accumulated 56,000 BTC following a price dip to $84,000. This preceded a 16% rise in Bitcoin price to its year-to-date high at $96,000.

However, this was not enough to sustain the recovery as the BTC/USD pair crashed by over 38% to $60,000.

A similar scenario could be playing out in the short term after the price was rejected from the resistance line of an ascending triangle at $72,000.

The chart below shows that the price risks a breakdown below the triangle’s lower trendline, signaling a possible continuation of the downtrend.

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

The first area of interest is the $66,000-$68,000 support zone, where the 200-week EMA currently sits. 

But while some analysts believe that Bitcoin has not yet found a real bottom, TexasWest Capital founder Christopher Inks said that “the path of least resistance for Bitcoin at the moment is up or sideways, not new lows.”

“We didn’t get the Bitcoin weekly close back in the range at $75K or higher,” Inks said in a Monday post on X, adding:

“We want to see the low holding for the next 2-3 weeks with declining volumes on the pullbacks.”

BTC/USD weekly chart. Source: X/Christopher Inks

The analyst was referring to the weekly support at $66,000, which AlphaBTC says the price will likely retest before it can go higher.

Source: X/AlphaBTC

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

The official plugin marketplace for open-source artificial intelligence agent project OpenClaw has become a target for supply chain poisoning attacks, according to a new report from cybersecurity firm SlowMist.

In a report released Monday, SlowMist said attackers have been uploading malicious “skills” to OpenClaw’s plugin hub, known as ClawHub, exploiting what it described as weak or nonexistent review mechanisms. The activity allows harmful code to spread to users who install the plugins, potentially without realizing the risk.

SlowMist said its Web3-focused threat intelligence solution, MistEye, issued high-severity alerts related to 472 malicious skills on the platform.

Supply chain poisoning is a cyberattack where hackers infiltrate a software supplier or component to inject malicious code before it reaches the end user.

Security report on 472 AI skills on OpenClaw. Source: SlowMist

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Malicious skills hide backdoors

According to SlowMist, the infected skills masquerade as dependency installation packages, which hide malicious commands that trigger backdoor functions after being downloaded and executed, a tactic the company compared to a Trojan horse.

Once installed, the malicious actors typically resort to “extortion following data theft,” according to SlowMist, as the “Base64” backdoor can collect passwords and personal files from infected devices.

Most of the attacks stem from the same malicious domain address (socifiapp[.]com), registered in July 2025, and the same IP address associated with Poseidon infrastructure exploits. 

Malicious domain linked to supply poisoning attacks. Source: SlowMist

Related: Whale's $9B Bitcoin sale was not due to quantum concerns: Galaxy Digital

The malicious skills were frequently named using terms associated with crypto assets, financial data and automation tools. These are categories that SlowMist said are more likely to lower users’ vigilance and encourage quick installation.

SlowMist’s findings point to a greater coordinated effort by an organized group, as multiple infected skills point to the same domains and IP.

“This strongly suggests a group-based, large-scale attack operation, in which a large number of malicious skills share the same set of domains/IPs and employ largely identical attack techniques.”

Cointelegraph has contacted SlowMist for additional details on which crypto-related AI skills were most heavily targeted.

In a Feb. 1 report, cybersecurity firm Koi Security also flagged that 341 out of the 2,857 analyzed AI skills contained malicious code, reflecting a typical pattern of supply chain poisoning attacks through plugins and extensions.

To avoid falling victim to this threat, SlowMist recommends that users first audit any SKILL.md sources that require installation or copy and paste execution. Users should also be suspicious of prompts that require system passwords, accessibility permissions or ask to execute system configuration changes.

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French police have reportedly arrested six people, including a minor, over the kidnapping of a 35‑year‑old magistrate and her 67‑year‑old mother in a cryptocurrency‑linked ransom plot targeting the magistrate’s partner, a crypto entrepreneur. 

According to a France 24 report, citing the AFP, the magistrate’s partner received a photo of her and a threat to mutilate the hostages if a cryptocurrency payment was not made.

The two women were held for around 30 hours in a garage in the Drôme region before managing to raise the alarm and escape without any ransom being paid.

The case comes amid a broader surge in crypto‑related kidnappings in France. In 2025, French authorities charged 25 suspects, including several minors, over a series of kidnappings and attempted kidnappings of crypto investors and executives, with ransoms allegedly demanded in digital assets. 

In that same year, the attempted abduction of the daughter and grandson of Pierre Noizat, co‑founder and CEO of French crypto exchange Paymium, was thwarted after the victim fought back and escaped from her attackers. 

Earlier French cases include an assault on a Ledger wallet user near Paris, in which attackers tried to force the victim to transfer crypto, and the kidnapping of Ledger co‑founder David Balland and his partner, during which Balland had part of his finger cut off before being freed.

Kidnappings “happening every 2 days”

France has attracted attention from crypto security researchers tracking so‑called “wrench attacks,” physical assaults, home invasions and kidnappings aimed at extracting private keys.

Bitcoin (BTC) security advocate Jameson Lopp said Friday that “8 of the 10 wrench attacks so far this year have been in France.”

French Bitcoin developer and founder Kevin Loaec also raised the alarm on X, writing that “France is really fu**ed up.” He said that he had to explain to relatives living there that “at this stage, they will get kidnapped someday. And there is nothing I can do about it.”

Kidnappings “happening every 2 days.” Source: Kevin Loaec

In the same thread, he claimed that “kidnappings [are] happening every 2 days in France now” and warned that it no longer mattered whether you are a known figure or not. 

“It just seem[s] to randomly happen to anyone who somehow used bitcoin, went to meetups, paid taxes on it,” he said, framing the problem as one of weak deterrence rather than technology. “Kidnappers basically don't get punished,” he added.

Video journalist and influencer Joe Nakamoto issued a stark warning of his own: “If you are a doxxed bitcoiner or crypto person in France. LEAVE. GET OUT. Wrench attacks everyday.”

Global problem, not just France

Security experts advise that the use of technical tools like time‑locked vaults, decoy wallets and withdrawal delays are only part of the answer, agreeing that adopting low-profile behavior is critical wherever self‑custodied crypto is held.

Despite France grabbing the headlines for physical attacks on crypto holders, the United States remains the country with the highest cumulative number of recorded wrench attacks over a longer period, with multiple other regions seeing documented cases of violent crypto‑related coercion, indicating that the trend is global rather than uniquely French.

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A wallet linked to the $50 million Infini exploit has become active again nearly a year after the breach, snapping up Ether during last week’s market downturn before routing the funds through a crypto mixing service.

The Infini exploiter-labelled wallet address bought $13.3 million worth of Ether (ETH) as the price dropped to $2,109 before sending the funds to crypto mixing protocol Tornado Cash, according to blockchain data platform Arkham.

“He seems very good at buying low and selling high,” blockchain tracking service Lookonchain said in a Monday X post. 

The activity marked the wallet’s first known transactions since August 2025, when the same address sold about $7.4 million worth of Ether near $4,202, close to the asset’s yearly high at the time.

Infini exploiter buys ETH dip after massive liquidations

The renewed activity comes against the backdrop of a sharp market selloff. Crypto markets logged their 10th-largest liquidation event on record last week, with roughly $2.56 billion in leveraged positions wiped out, according to data from Coinglass.

Related: Wallet linked to alleged US seizure theft launches memecoin, crashes 97%

Ether’s price briefly sank to $1,811 on Thursday, marking a nine-month low last seen at the beginning of May 2025, TradingView data shows.

Infini exploiter-labelled wallet address, transfers, balance history. Source: Arkham

The acquisition comes a year after stablecoin payment company Infini lost $50 million in an exploit suspected to have been conducted by a rogue developer who retained administrative privileges after project delivery, Cointelegraph reported in February 2025.

The stolen USDC (USDC) was immediately swapped for Dai (DAI) stablecoins that have no freeze function. The latest transactions show that the attacker is still at large with the $50 million, using it to chase more profits through cryptocurrency trading.

The ETH purchase suggests the exploiter is still actively trading the proceeds of the attack, rather than exiting entirely into stablecoins.

Top 10 liquidations in crypto history. Source: Coinglass

Related: Bitcoin dips to $60K, TRM Labs becomes crypto unicorn: Finance Redefined

Infini launches Hong Kong lawsuit against developer

A month after the exploit, Inifini filed a Hong Kong lawsuit against a developer and several unidentified individuals suspected of involvement in the $50 million breach.

In a March 24 onchain message to the attacker, Infini named developer Chen Shanxuan and three unidentified persons with access to wallets involved in the exploit as defendants in the lawsuit. 

The Hong Kong court also sent an injunction order via an onchain message to the attacker’s wallet, including a writ of summons for the defendants.

Infini previously offered 20% of the bounty to the hackers responsible for the attack, upon return of the stolen funds. The protocol claimed it had gathered IP and device information about the exploiters.

Cointelegraph reached out to Infini for comment on progress related to the legal dispute and the recovery of the stolen funds, but had not received a response by publication.

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A Chinese-language crypto guarantee marketplace known as Xinbi processed nearly $18 billion in onchain transaction volume despite platform bans and United States enforcement actions aimed at dismantling similar services, according to a new report from TRM Labs.

The report said recent crackdowns — reshaped but failed to dismantle — a key layer in crypto-enabled laundering infrastructure. TRM’s analysis showed that Xinbi sustained on-chain activity after Telegram banned clusters of Chinese-language guarantee services in 2025. 

The report attributes Xinbi’s resilience to rapid migration to alternative messaging services and the launch of an affiliated wallet, XinbiPay. Onchain data showed wallet activity rebounded in January 2026 as users transitioned to the new setup.

The analytics firm said Xinbi has played a central role in laundering proceeds for scam operations and cybercrime syndicates, including pig-butchering fraud schemes.

Newly established XinbiPay Wallet service’s hot wallet inflow and outflow since Dec. 24, 2025. Source: TRM Labs

The $17.9 billion figure reflects gross onchain transaction volume processed by wallets attributed to Xinbi by TRM. This includes inflows, outflows and internal transfers within the platform’s escrow and wallet system. 

TRM said the figure does not represent the net proceeds or confirmed illicit gains, and may include internal recycling of funds, which is common to guarantee services. 

Illicit guarantee service Xinbi adapts to enforcement

In a statement sent to Cointelegraph, Ari Redbord, global head of policy at TRM Labs, said services like Xinbi are adapting.

“Guarantee services like Xinbi are learning to survive enforcement by fragmenting across platforms and building their own infrastructure,” Redbord said. 

“These services sit at the center of the scam economy,” he said, adding that taking them out of the laundering chain exposes entire networks that depend on them. 

TRM said Xinbi started promoting alternative channels for coordination as early as mid-2025, laying the groundwork for migration as enforcement pressure intensified. 

The analytics firm said the transition accelerated in January, coinciding with additional actions against peer services and arrests tied to laundering networks.

Quarterly incoming crypto volumes for major Chinese-language guarantee services. Source: TRM Labs

Related: Crypto thieves, scammers plunder $370M in January: CertiK

Xinbi previously flagged over $8 billion in stablecoin flows

Xinbi has been under scrutiny since 2025. In May, blockchain analytics firm Elliptic reported that wallets linked to Xinbi Guarantee had received at least $8.4 billion in stablecoins, tied to money laundering and scam-related activity in Southeast Asia. 

The earlier report linked Xinbi to a Chinese-language, Telegram-based marketplace selling money laundering services, stolen data, scam-enabling tools and other illicit offers. 

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The Open Network Foundation has launched TON Pay, a new payments software development kit (SDK) designed to make cryptocurrencies usable for everyday consumer transactions within the Telegram ecosystem. 

In a Monday release shared with Cointelegraph, the product is positioned as a simple, wallet-agnostic payment layer that allows merchants and Mini App developers to accept crypto directly through Telegram, aiming to turn the app into a hub for seamless blockchain-based commerce.

According to the TON Foundation, TON Pay provides developers with a single software kit that integrates with Telegram Mini Apps, removing much of the friction associated with managing wallet infrastructure, settlement, and checkout flows. 

TON Foundation’s vice president of payments, Nikola Plecas, said the tool allows merchants to “accept payments seamlessly and natively on TON through a simple SDK integration,” adding that it works across various wallets and tokens, including Toncoin (TON) and Tether’s USDt (USDT).

The system was designed for scale, he said, with targeted sub-second transaction times and average fees below one cent. According to Plecas, the ultimate goal is to “power transactions for Telegram’s global audience of over 1.1 billion monthly active users.” 

By embedding payments directly into Telegram, TON Pay seeks to reduce common barriers to crypto adoption, such as multi-step checkouts, pre-paying gas fees, and the lack of straightforward merchant tools.

TON Pay targets everyday payments inside Telegram

Initially, TON Pay will operate within Telegram Mini Apps, with plans to expand to web environments and other platforms over time. 

Telegram Mini Apps. Source: Telegram

Plecas said the Foundation was focused on refining the in-app experience first, noting that “onchain Telegram-based commerce is an enormous opportunity.” 

Future updates, he said, will add support for subscriptions, gasless transactions, and region-specific off-ramps.

The team also plans to partner with local third-party providers for custody, compliance, and fiat conversion services, an approach meant to balance decentralization with regulatory demands. 

Optional merchant tools, including analytics and multiparty-computation wallets, are also in development.

TON Pay enters crowded ‘everything app’ race

TON Pay’s rollout comes as other major platforms move into integrated payments. Elon Musk’s X has announced plans for X Money as part of a broader push into financial services, and a shift toward building so-called “everything apps” that can handle messaging, commerce, and payments in one interface.

Coinbase is pursuing a similar strategy, rebranding Coinbase Wallet as the Base app, a crypto everything app that combines a wallet with social features, payments, trading, and support for onchain mini apps running on its Base layer-2 network.

TON faces longstanding skepticism tied to its deep integration with Telegram, which has previously been criticized for its lack of decentralization, unclear governance, and scams tied to unofficial projects. 

The TON Foundation maintains that TON remains an open, permissionless network where developers can build freely. 

Merchants using TON Pay, Plecas said, must comply with “platform-specific terms and policies” set by Telegram, with additional requirements applying as the SDK expands beyond the app.

“We are designing a system that addresses key challenges in crypto payments,” Plecas said, such as friction, gas fees, and onboarding, while staying competitive with fiat systems.

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Crypto investment products logged a third straight week of outflows, though the pace of selling eased markedly as digital asset prices steadied after a sharp downturn.

Crypto exchange-traded products (ETPs) recorded $187 million in outflows during the week, a sharp drop from the $3.43 billion seen over the previous two weeks, CoinShares reported on Monday.

The slowdown came as Bitcoin (BTC) fell to its lowest level since November 2024, with the price touching $60,000 on Coinbase last Thursday.

“While flows typically move in line with crypto prices, changes in the pace of outflows have historically been more informative, often signaling inflection points in investor sentiment,” said James Butterfill, CoinShares’ head of research.

Bitcoin ETPs only to post major losses, while XRP leads inflows

Bitcoin investment products were the only ETP group to suffer significant losses last week, with outflows totaling $264.4 million.

XRP (XRP) funds led inflows, attracting $63 million, while other altcoin ETPs, such as those tracking Ether (ETH) and Solana (SOL), posted modest gains of $5.3 million and $8.2 million, respectively.

Weekly crypto ETP flows by asset as of Friday (in millions of US dollars). Source: CoinShares

Spot Bitcoin exchange-traded funds (ETFs) accounted for a large portion of Bitcoin ETP outflows last week, amounting to $318 million, according to SoSoValue data.

ETP volumes hit record $63 billion in weekly trading

Addressing last week’s slowdown in outflows, Butterfill suggested that a “potential market nadir may have been reached,” implying that a possible bottom could have formed for ETPs.

Despite the easing of outflows, last week marked a milestone in trading activity. According to Butterfill, ETP volumes reached a record $63.1 billion, surpassing the previous high of $56.4 billion set in October last year.

Assets under management (AUM) in Bitcoin ETPs stood at $102.7 billion by the end of the week, while ETF AUM fell below $90 billion.

Weekly Bitcoin ETF flows year-to-date. Source: SoSoValue

Meanwhile, global crypto ETP AUM declined to $129 billion, the lowest level since March 2025, Butterfill noted.

Following three consecutive weeks of outflows, crypto ETPs have lost a total of $1.2 billion year-to-date, compared with $1.9 billion of outflows in Bitcoin ETFs.

In other industry news, major crypto fund issuer 21Shares filed last week with the US Securities and Exchange Commission for an ETF tracking Ondo (ONDO).

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South Korea’s Financial Supervisory Service (FSS) said it will step up scrutiny of suspected cryptocurrency price manipulation in 2026, outlining a slate of planned investigations that target high-risk trading tactics, including “whale” activity and schemes that exploit disruptions at local exchanges, local outlet Yonhap reported Monday.

According to Yonhap News Agency, FSS Governor Lee Chang-jin said that the agency will target high-risk trading practices that undermine market order, including coordinated manipulation and schemes exploiting disruptions in exchange infrastructure. 

The FSS said the probes will focus on tactics that involve large-scale trading by whales, artificial price swings during exchange deposit or withdrawal suspensions and coordinated trading mechanisms using APIs or social media to spread false information. 

Under the plan, the regulator said it intends to strengthen automated detection by analyzing abnormal price movements at very short intervals and developing tools that can flag suspected manipulation “sections” and related account groups, alongside text analysis that can help identify coordinated misinformation.

Planned probes target crypto manipulation tactics

The FSS said it will investigate practices that distort price discovery, including schemes that take advantage of exchange deposit or withdrawal suspensions, a practice referred to in South Korea as “gating.”

These situations can trap supply on a platform, creating artificial movements disconnected from the broader digital asset markets. 

The financial watchdog also mentioned that it will track manipulation using market-order APIs and coordinated activity aimed at amplifying false narratives on social media. 

On Feb. 2, the FSS expanded its use of artificial intelligence-powered surveillance tools to monitor crypto markets, reducing reliance on manual identification of potential manipulation.

In parallel, the watchdog established a task force to prepare for the introduction of the Digital Asset Basic Act, the second phase of the country’s crypto regulatory framework. 

The unit will support the implementation planning rather than enforcement, including work on disclosures, exchange oversight and licensing standards. 

Related: South Korea tightens crypto licensing rules for exchanges and shareholders

Exchange incidents add urgency to oversight push

The tougher tone arrives after a series of exchange-related incidents put operational risk back in the spotlight.

On Sunday, crypto exchange Bithumb said it recovered 99.7% of excess Bitcoin (BTC) mistakenly credited to users during a promotional error.

While the exchange said no customer assets were lost, the episode briefly triggered sharp price swings and prompted compensation measures for affected users. 

The incident triggered a response from regulators. According to the Asia Business Daily, the Financial Services Commission (FSC) held an emergency inspection meeting on Sunday with the FSS and the Korea Financial Intelligence Unit (KoFIU), where officials reportedly ordered a comprehensive review of internal controls across all domestic crypto exchanges.

On Feb. 3, the FSS said it was reviewing sharp price movements in the ZKsync token during a system maintenance window on Upbit. The regulator said it was analyzing the data and could escalate the review into a formal investigation depending on the findings. 

Upbit operator Dunamu previously told Cointelegraph that it has internal systems that also flag suspicious activities and a process that involves cooperating with regulators.

“When regulators request information, we can provide the relevant trading data without delay,” the spokesperson told Cointelegraph.

Magazine: South Korea gets rich from crypto… North Korea gets weapons

Bitcoin (BTC) begins its second week of February, licking its wounds as traders remain bearish on BTC.

Market forecasts agree that Bitcoin price action has not yet put in a reliable long-term bottom.

CPI week comes as markets lose faith in Fed rate cuts in March.

US dollar strength begins to fade as analysts eye a potential rerun of 2021 for Bitcoin-dollar correlation.

Japan’s election turns heads, with analysis seeing a weaker yen and crypto headwinds to come.

Bitcoin miners send large amounts to exchanges as the dust settles on the snap downside.

BTC price expected to attempt $60,000 retest

Bitcoin continues to trade above $70,000 as the week gets underway, but traders are anything but bullish on the short-term BTC price outlook.

Data from TradingView shows a lack of volatility around the weekly close, with BTC/USD staying around 20% higher versus its 15-month lows from last week.

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

In an X thread covering lower time frames, trader CrypNuevo warned that the current relief may end up as a manipulative move to liquidate late short positions.

“The intention to push price up first would be to hit the short liquidations that exist between $72k-$77k mainly. But this move is just a guess,” he wrote. 

“What we're really anticipating here is the long wick getting filled at least 50% of it in the next weekly candles.”

BTC/USDT one-week chart. Source: CrypNuevo/X

CrypNuevo implied that the lows could see at least a partial retest in the short term.

“It could be an immediate wick-fill. But in the case of having a move up first, then it could probably take around 5-8 weekly candles to get filled,” he forecast. 

At the weekend, Cointelegraph reported on a broad consensus that price would make new macro lows in the future — and that these could take BTC/USD to $50,000 or lower.

Guys this isn’t the bottom. It’s just a bounce.

Historically $BTC drops 80% during its bear market.

That puts us near 40k

— Roman (@Roman_Trading) February 6, 2026

Trader Daan Crypto Trades meanwhile considered less exciting BTC price action to come next.

“After such a volatile few weeks, price will attempt to start ranging at some point. With this recent spike in volatility and big retrace yesterday, there's a good chance we are hitting that point about now,” he told X followers Sunday. 

“Would expect volatility to slowly come off a bit again, a range to be formed and from there on out we can reassess and look for opportunities.”

CPI due as Fed policy nerves emerge

The macro focus is back on US inflation data this week as wild gyrations in precious metals settle.

The January print of the Consumer Price Index (CPI), due Friday, forms the highlight and will follow various US employment data releases.

“Earnings season is also in full swing and macroeconomic uncertainty is elevated,” trading resource The Kobeissi Letter added on the week’s outlook.

Since announcing the new Chair of the Federal Reserve, President Donald Trump has failed to calm market nerves about future financial policy. His pick, Kevin Warsh, is thought to be notionally opposed to easing financial conditions — something that has already weighed on risk-asset performance.

Markets thus have little faith in interest rates going lower at the Fed’s next meeting in mid-March — even if Warsh is only due to take over in May.

Data from CME Group’s FedWatch Tool currently gives 82% odds of rates staying at current levels.

Fed target rate probabilities for March FOMC meeting (screenshot). Source: CME Group

Commenting, analytics resource Mosaic Asset Company pointed to “stubborn” US inflation statistics as a reason for a more hawkish Fed — and associated market nerves.

“The combination of stronger economic growth and stubbornly high core inflation might starting casting a doubt on the interest rate outlook across the yield curve,” it wrote in the latest edition of its regular newsletter, “The Market Mosaic.”

Mosaic said that difficult conditions for the Fed were a “major catalyst behind the selloff in growth and AI stocks this year.”

“Rising rates makes the present value of future corporate profits worth less in today’s terms, while higher rates presents competition for investor capital as well,” it added.

As the week began, meanwhile, gold returned to the $5,000 mark, while US stocks futures joined Bitcoin in a relief bounce off Friday’s lows. 

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

US dollar at a ten-year crossroads

For both Bitcoin and the broader risk-asset market, US dollar strength is becoming an increasingly important potential volatility catalyst.

The US dollar index (DXY), which enjoyed a relief rally following a trip to multiyear lows near 95.5 in late January, is failing to reclaim levels above 98.

US dollar index (DXY) one-day chart. Source: Cointelegraph/TradingView

A strong dollar tends to result in pressure for Bitcoin, and while the correlation has undergone many changes in recent years, the long-term trend may provide bulls with a more reliable tailwind.

“Still holding that support. But really critical level for the long-term trend,” analyst Aksel Kibar wrote in recent dollar commentary. 

“$DXY can offer a great trade setup soon. Long or short. irrespective of direction.”

US dollar index (DXY) one-month chart. Source: Aksel Kibar/X

Kibar eyed DXY possibly now breaking out of a ten-year trading channel to the downside, but said that more data would be necessary before this was confirmed.

An alternative perspective comes from Henrik Zeberg, chief macro economist at crypto market insight company Swissblock.

In an X post last week, Zeberg likened the current relationship between BTC and DXY to early 2021 — around ten months before BTC/USD saw the blow-off top in its last bull market.

Far from breaking down, DXY could in fact be at the start of its next bull run.

“Strong DXY is BEARISH for BTC - just not in the initial phase of the Bull. Likely because ROTATION into US Assets,” he wrote. 

“In 2021 - we had 12 weeks of BTC rally into the new DXY Bull. The rally gained 130% into the TOP for BTC. I see same development again! +100% gain in BTC - into its FINAL TOP.”

BTC/USD one-week chart. Source: Henrik Zeberg/X

An accompanying chart suggested a target for that “final top” at $146,000.

Yen weakness stays on the radar

For the short term, however, Bitcoin faces another macro hurdle: a new fiscal policy era in Japan.

After the reelection of Prime Minister Sanae Takaichi, Japanese stocks surged to record highs — and analysis now sees negative impacts for US investment vehicles and crypto.

“The landslide victory of Sanae Takaichi marks Japan’s shift toward aggressive fiscal stimulus and tolerance for currency depreciation,” analyst XWIN Research Japan wrote in a blog post published on onchain analytics platform CryptoQuant. 

“The ‘Takaichi Trade’ has lifted the Nikkei to record highs while reshaping global capital flows.”

BTC and US Index Tracker (screenshot). Source: CryptoQuant

XWIN referenced findings warning of “slowing inflows” into US equity exchange-traded funds (ETFs), thanks to a weaker yen increasing the attractiveness of Japanese bonds.

“Against this backdrop, Bitcoin faces short-term downside risk,” it continued. 

“In risk-off phases, BTC tends to correlate with U.S. equities, allowing equity-led de-risking to spill into crypto markets. This pressure does not reflect deterioration in Bitcoin’s on-chain fundamentals, but cross-asset risk management.”

As Cointelegraph reported, crypto markets remain highly sensitive to Japan-related news, with one theory even attributing the yen carry trade to last week’s BTC price crash.

Analyzing the yen situation ahead of the election, Robin Brooks, a senior research fellow at Brookings, described its weakness as a “political liability.”

“With the election out of the way, especially if Takaichi does well, the optics of Yen depreciation won’t matter nearly as much,” he predicted. 

“So the election is conceivably a catalyst for the next round of Yen weakening.”

USD/JPY vs. BTC/USD one-day chart. Source: Cointelegraph/TradingView

Bitcoin miners see “exceptional” exchange inflows

Bitcoin miners are busy adjusting to current reality after Bitcoin’s 15-month lows — but research warns that a sell-off risk remains.

Miner inflows to exchanges reached their highest levels since 2024 in recent days, with Feb. 5 alone seeing total deposits of 24,000 BTC.

Describing that tally as “exceptional,” CryptoQuant contributor Arab Chain said that the market is undergoing a “redistribution phase.”

“Notably, this rise in miner activity comes within a market environment characterized by clear volatility and reduced risk appetite among segments of traders, which could add an extra layer of short-term selling pressure,” a blog post explained.

“However, these inflows do not necessarily indicate the start of a prolonged downtrend, but rather may represent a natural redistribution phase within the market cycle.”

Bitcoin miner inflows to exchanges. Source: CryptoQuant

The classic Hash Ribbons indicator, which measures periods of miner stress, likewise continues its reaction to Bitcoin’s flash crash.

The indicator’s two moving averages of hash rate show no sign of forming a classic bullish cross, firmly invalidating its latest “buy” signal from early January.

BTC/USD one-day chart with Hash Ribbons data. Source: Capriole Investments

Four years after its viral QR code advertisement, crypto exchange Coinbase has returned to the Super Bowl, this time betting on a Backstreet Boys karaoke-inspired ad. 

Coinbase’s one-minute TV spot during the most-watched sporting event in the US was mostly text animation that flashed the lyrics to the Backstreet Boys' 1997 hit “Everybody (Backstreet’s Back).”

Coinbase marketing chief Catherine Ferdon said in a statement that the ad aimed to “bring people together for a shared experience that highlights how the crypto community has grown.”

It’s Coinbase’s first ad spot at the Super Bowl since 2022, when it debuted with a 60-second commercial featuring a color-changing QR code that bounced around the screen similar to a DVD screensaver. 

The QR code ad directed to a link offering $15 in Bitcoin (BTC) for those who signed up to Coinbase, which was so popular that it crashed the website and reportedly saw 20 million hits in one minute.

Latest ad divides, but that means it worked, says Coinbase

Coinbase’s latest Super Bowl ad garnered divided opinions online, with some X users saying the commercial elicited jeers as crypto has lost its lustre amid a market crash and its ties to the Trump administration, while others praised it for being simple and memorable.

“If you're talking about it, it worked,” Coinbase posted to X in response to a user who said the company’s ad was “terrible.”

Others online also piled onto the ad, with one X user posting “the room I’m in ERUPTED in boos when we found out it was a Coinbase ad,” while Axios reporter Andrew Solender said a room he was in “burst into groans and shouts of ‘fuck you’” after the ad aired.

Ethereum Foundation engineer Chase Wright said that “half of the people at the party I was at were singing along and laughed when it was Coinbase,” while another X user said it was “lowkey genius,” as those who watched it “will 100% remember Coinbase if they ever want to buy crypto.”

Coinbase CEO Brian Armstrong defended the ad on X, arguing that “most people half-watch commercials (buzzed, in a loud room, with lots of people). It takes something unique to break through.”

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Ethereum domain name service provider ENS has canceled plans to launch a layer 2 as part of its ENSv2 upgrade, instead opting to launch a revamped protocol directly on Ethereum. 

In a blog post on Friday, ENS lead developer nick.eth explained that the decision was partly due to a “99% reduction in ENS registration gas costs over the past year” amid a number of important upgrades to the Ethereum network.

“Put simply: Ethereum L1 is scaling, and it's scaling faster than almost anyone predicted two years ago. The recent Fusaka upgrade raised the gas limit to 60 million, a 2x increase from the beginning of 2025,” nick.eth said, adding: 

“Now Ethereum core developers are targeting 200 million gas limit targets in 2026, a 3x increase from today, and that's before any ZK upgrades land.”

The Fusaka upgrade, one of the most recent Ethereum upgrades that went live in early December, has helped Ethereum drive down gas fees due to its significant scaling capabilities for both the L1 and the ecosystem of L2s. 

Blog post announcing changes to ENS’ upgrade plans. Source: ENS

ENS initially announced its L2 Namechain in November 2024, with the project stating that it would make it easier and cheaper for users to register domain names via the use of rollups. 

Nick.eth emphasized that the context has now changed dramatically, and it is now viable to build directly on the L1 instead of opting for a full-fledged L2 in a bid to reduce costs. 

“Huge L1 scalability was not part of the Ethereum roadmap, and the message was clear that L2s were the way forward. We needed to meet our users where the ecosystem was heading, and that meant building Namechain,” he said.

Related: Arbitrum, Optimism and Base weigh in after Vitalik questions L2 scaling model

With plans for Namechain now gone, the ENS lead developer outlined that the project is still working on significant performance and utility improvements via ENSv2, while the protocol will still be highly interoperable with L2s. 

“The vast majority of our engineering effort has gone into ENSv2 itself: the new registry architecture, the improved ownership model, better handling of name expiration, and the flexibility that comes from giving each name its own registry,” he said, adding: 

“Deciding to stay on L1 doesn't mean we're closing the door on L2s entirely. The flexibility of the ENSv2 architecture makes L2 names more interoperable. Our new registration flow abstracts the complexity crosschain transactions.”

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The Bitcoin Sharpe ratio, which measures risk/reward potential, is in negative territory that is often associated with the end of bear markets, according to CryptoQuant analyst Darkfost.

“The Sharpe ratio has just entered a particularly interesting zone, one that has historically aligned with the final phases of bear markets,” said the analyst on X on Saturday.

They added, however, that it is not a signal that the bear market is over, “but rather that we are approaching a point where the risk-to-reward profile is becoming extreme.”

The Sharpe ratio has fallen to -10, its lowest level since March 2023, according to CryptoQuant.

The ratio measures Bitcoin (BTC) performance relative to the risk taken, indicating how much return an investor can expect for each unit of risk. 

Bitcoin Sharpe ratio is at bear market lows. Source: Darkfost

Negative ratio signals market turning point

The ratio was lower in late 2022 to early 2023, and late 2018 to early 2019 — both periods marking the depths of the bear market cycle. The metric fell to zero in November 2025 when BTC prices hit a local low of $82,000. 

The analyst said that in practical terms, “the risk associated with investing in BTC remains high relative to the returns recently observed.”

“The ratio is still deteriorating, showing that BTC’s performance is not yet attractive compared to the risk being taken,” they added.  

Related: Bitcoin bear market not over? Trader sees BTC price 'real bottom' at $50K

However, a negative Sharpe ratio usually signals market turning points, they said. 

“But this type of dynamic is precisely what tends to appear near market turning zones. We are gradually approaching an area where this trend has historically reversed.”

True reversal could be months away

The analyst cautioned that this phase “may last several more months, and BTC could continue correcting before a true reversal takes place.” 

Analysts at 10x Research also expressed caution in a market update on Monday, stating: 

“While sentiment and technical indicators are approaching extreme levels, the broader downtrend remains intact. In the absence of a clear catalyst, there is little urgency to step in.” 

BTC tanked to $60,000 on Friday but recovered to $71,000 by Monday. However, it remains down 44% from its October peak of $126,000, and sentiment remains firmly in bear market territory, analysts say.

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Crypto.com CEO Kris Marszalek has officially launched his new website ai.com to the public, allowing users to create personal AI agents that can perform everyday tasks on their behalf.⁠Brayden Lindrea⁠

The ai.com commercial aired during Super Bowl 60 on NBC on Monday, a sporting event that draws in over 100 million viewers a year, promoting the beta launch of the AI platform.

For now, users can register their ai.com username handles but must then wait in a queue to have their private, personalized AI agents spun up.


Marszalek said the AI agents can perform everything from managing emails and scheduling meetings to canceling subscriptions, completing shopping tasks, and planning trips.

Marszalek said his mission with ai.com is to accelerate artificial general intelligence “by building a decentralized network of autonomous, self-improving AI agents that perform real-world tasks for the good of humanity.”

ChatGPT creator OpenAI launched an enterprise-focused AI agent platform, Frontier, last week, while software engineer Peter Steinberger released AI agent OpenClaw in November 2025, which gained popularity in January.

Marszalek said he bought the AI-themed domain in April fion — said to be the largest publicly disclosed domain sale in history — and has since built a team to bring the product to market.

Pseudonymous crypto and AI researcher 0xSammy said the move resembles how Marszalek scaled Crypto.com to over 150 million customers by buying a popular domain and investing heavily in marketing:

“One of the most recognisable URLs on the internet + 128M eyeballs + a Super Bowl ad = the biggest single-day domain launch in history?”



Marszalek said ai.com saw “insane traffic” in the first few hours of launching, which briefly caused the website to crash before coming back online.


Source: AI.com
Tech heavyweights also ran AI ads
Google ran a 60-second Gemini AI advertisement during Super Bowl 60, while Anthropic also ran a commercial promoting its Claude chatbot.

Related: Crypto PACs secure massive war chests ahead of US midterms

Amazon also ran a commercial showcasing its Alexa AI product, while Meta advertised Oakley-branded AI glasses.

These tech companies reportedly paid around $8 million to run 30-second advertisements during the Super Bowl.

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US Treasury Secretary Scott Bessent is calling on the Senate Banking Committee to proceed with confirmation hearings for Federal Reserve chair nominee Kevin Warsh, despite a standoff over an ongoing probe into current Fed chair Jerome Powell. 

Speaking with Fox News’ Sunday Morning Futures, Bessent referenced recent pushback from Republican Senator Thom Tillis, who said he plans to stall on processing the next Fed chair until the Department of Justice (DOJ) probe into Powell is resolved. 

“Senator Tillis has come out and said he thinks that Kevin Warsh is a very strong candidate,” Bessent said, adding: 

“So I would say, why don’t we get the hearings underway and see where Jeanine Pirro’s investigation goes?”

Scott Bessent speaking about Kevin Warsh and Thom Tillis. Source: Fox News

Despite his support for Warsh, Tillis, a member of the Senate Banking Committee, has vowed on multiple occasions to block the nomination until the DOJ gets “to the truth” of the matter, as part of a push to protect Fed independence. 

“I’d be one of the first people to introduce Mr. Warsh if we’re behind this and support him, but not before this matter is settled,” Tillis told CNBC on Wednesday.  

Republicans control 13 out of the 24 seats in the Senate Banking Committee, meaning that they could vote as a bloc to push through Warsh. However, with Tillis looking to halt the process, he could use his vote to oppose Warsh, putting the ultimate decision in the hands of the Democrats.  

The DOJ, led by attorney Jeanine Pirro, initially opened up an investigation into Powell in early January, serving the Fed with grand jury subpoenas and threats of criminal charges relating to expenses on a multi-year renovation project at Fed office buildings.

Powell promptly denied the assertions and argued on Jan. 11 that the investigation was politically motivated as the Fed’s interest rate policy was against the wishes of US President Donald Trump. 

On Jan. 30, Trump officially nominated Kevin Warsh as the next Fed chair to succeed Powell. 

Related: Federal Reserve entering 'gradual print' mode — Lyn Alden

Following a presidential nomination, the nominee must then appear before the Senate Banking Committee for a review hearing. The committee then votes on whether to send the nominee to the full senate with a favorable or non-favorable recommendation, or no recommendation at all. 

Finally, the full Senate then holds a debate and vote, and if the nominee is confirmed, they can be officially sworn in as the next Fed chair. 

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The Federal Reserve has heard arguments from crypto companies and banking associations on a proposal to allow so-called “skinny master accounts,” which would give fintech firms limited access to the central bank’s payments infrastructure.

The Fed received 44 comments in response to its proposal, which closed on Friday, seeking feedback on offering a “payment account,” with crypto companies backing the idea and banks urging caution.

In opening up comments on the proposal in December, Fed Governor Christopher Waller said the new payment accounts were needed due to “rapid developments” in payments and that they would “support innovation while keeping the payments system safe.” 

Payment accounts won’t have the same privileges as master accounts (commonly owned by big banks) — they wouldn’t earn interest or be given access to Fed credit and would have balance limits.

Crypto backs getting accounts

In response to the proposal, stablecoin issuer Circle said in a letter that the accounts would “play an important first step in carrying forward Congress’ vision under the GENIUS Act” and argued they would “materially strengthen US payments.”

An excerpt from Circle’s letter to the Fed, arguing that a payment account would be a boon to domestic payments. Source: Federal Reserve

The recently formed Blockchain Payments Consortium called the accounts an “overdue and much-welcomed addition” that it said would “eliminate uncompetitive practices that undercut consumers and concentrate risk around a handful of banks.”

Anchorage Digital Bank, the country’s first federally chartered crypto bank, said that “specific deficiencies” in the proposal must be addressed regarding overnight balance limits, interest on reserves and access to the Fed’s automated clearing house.

The Fed floated setting an overnight balance limit at the lesser of $500 million or 10% of the account holder’s total assets and would not give interest on account balances or allow access to its clearing house, which offers same-day and international payments.

Banks raise concerns about access to Fed system

However, multiple banking associations responded to the Fed with concerns about allowing different entities into the central banking system.

The American Bankers Association said that many of the entities that would be eligible for a payment account “lack a long-run supervisory track record, are not subject to consistent federal safety-and-soundness standards and may rely on evolving statutory or regulatory regimes.”

The Wisconsin Bankers Association said that it believes access to the accounts “should depend not only on legal eligibility, but also on an institution’s demonstrated capabilities in governance, risk management, internal controls, and compliance.”

Better Markets, a nonpartisan organization that lobbies for financial reform, called the payment accounts an “irresponsible and reckless giveaway to the crypto industry” that should be rescinded.

The group said the accounts would “implicitly and unnecessarily” expand the Fed’s mandate and that the types of companies that would request access to such accounts “present huge risks to the Federal Reserve System and the financial system.”

The Fed will consider the feedback before it makes a final rule on its proposal, which could take months.

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Just one victim lost $12.2 million in January by copying the wrong address from their transaction history in an “address poisoning attack,” adding to a similar $50 million attack in December, according to Scam Sniffer.

Address poisoning is when attackers send small transactions or “dust” from addresses that look similar to ones in the target’s transaction history, hoping the victim will copy the wrong address.

Scam Sniffer added that signature phishing also surged recently, with $6.27 million stolen from 4,741 victims in January, a 207% increase compared to December.

Two wallets accounted for 65% of all signature phishing losses.

Signature phishing is slightly different as it tricks users into signing malicious blockchain transactions, such as unlimited token approvals.

Address poisoning and signature phishing attacks have increased in January: Source: Scam Sniffer

Address poisoning trend not slowing down 

“Address poisoning is one of the most consistent ways large amounts of crypto get lost,” reported security firm Web3 Antivirus on Thursday.

Some of the biggest address poisoning losses it tracked over time ranged from $4 million to $126 million. “Recent incidents show this trend isn’t slowing down,” they stated. 

Related: Stablecoin ‘dust’ txs on Ethereum triple post-Fusaka: Coin Metrics

The researchers explained that address poisoners “generate full addresses that match the same first/last few characters you see, but the middle is different, so it looks ‘identical.’” 

Dust attacks on Ethereum have surged 

Analysts speculate that the Ethereum Fusaka upgrade in December has contributed to the increase in attacks because it made the network cheaper to use in terms of transaction costs. 

Stablecoin-related dust activity is now estimated to make up 11% of all Ethereum transactions and 26% of active addresses on an average day, reported Coin Metrics earlier in February. 

The firm analyzed over 227 million balance updates for stablecoin wallets on Ethereum from November 2025 through January 2026, finding that 38% were under a single penny — “consistent with millions of wallets receiving tiny poisoning deposits,” it stated. 

Blockchain intelligence firm Whitestream reported on Sunday that the decentralized DAI stablecoin “has gained a reputation as a preferred stablecoin for illicit actors, serving as a ‘parking place’ for illegally sourced funds.”

“This is due to the protocol’s governance, which does not cooperate with authorities in freezing DAI wallets,” it stated, referencing recent address poisoning attacks. 

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Digital asset manager CoinShares has brushed aside concerns that quantum computers could soon shake up the Bitcoin market, arguing that only a fraction of coins are held in wallets worth attacking.

In a post on Friday, CoinShares Bitcoin research lead Christopher Bendiksen argued that just 10,230 Bitcoin (BTC) of 1.63 million Bitcoin sit in wallet addresses with publicly visible cryptographic keys that are vulnerable to a quantum computing attack.

A little over 7,000 Bitcoin are held in wallets with between 100 and 1,000 BTC, while roughly 3,230 Bitcoin are held in wallets with 1,000 to 10,000 BTC, equating to $719.1 million at current market prices, which Bendiksen said could even resemble a routine trade.

The remaining 1.62 million Bitcoin are held in wallets with holdings under 100 BTC, which Bendiksen claimed would each take a millennium to unlock, even in the “most outlandishly optimistic scenario of technological progression in quantum computing.”

Split of quantum-vulnerable Bitcoin across various holding sizes. Source: CoinShares

The CoinShares researcher said these “theoretical risks” stem from quantum algorithms such as Shor’s, which could break Bitcoin’s elliptic-curve signatures, and Grover’s, which could weaken the Secure Hash Algorithm 256-bit (SHA-256).

However, he argued neither quantum algorithm could alter Bitcoin’s 21 million supply cap or bypass proof-of-work, two of the Bitcoin network’s most foundational features.

Quantum fears have been among the many drivers of Bitcoin FUD (fear, uncertainty, doubt) in recent months, with critics warning that any compromise of its cryptography could threaten a network that currently secures $1.4 trillion in value.

The Bitcoin at risk are unspent transaction output (UTXO) wallets, which are chunks of Bitcoin tied to wallet addresses that have not been spent. Many of these Bitcoin wallets at risk come from the Satoshi era.

The issue has divided the Bitcoin community over whether to implement a quantum-resistant hard fork or wait. 

Related: Bitcoin ETFs ‘hanging in there’ despite BTC plunge: Analyst 

Some Bitcoiners, such as Strategy executive chairman Michael Saylor and Blockstream CEO Adam Back, believe quantum threats are overblown and will not disrupt the network for decades.

Bendiksen shares those views, stating that Bitcoin is “nowhere near dangerous territory,” noting that cracking its cryptography would require millions of fault-tolerant qubits — currently far beyond the 105 qubits achieved by Google’s latest quantum computer, Willow.

“Recent advancements, including demonstrations by Google and others, represent progress but fall short of the scale needed for real-world attacks on Bitcoin.”

Others, such as Capriole Investments founder Charles Edwards, view quantum computing as a potential “existential threat” to Bitcoin, arguing that an upgrade is needed now to strengthen network security.

Source: Dom Kwok

Edwards said Bitcoin could be repriced significantly higher once a solution is implemented, which some, like Blockstream researcher Jonas Nick, suggest could involve the adoption of post-quantum signatures.

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The US Federal Reserve is entering into a “gradual” era of money printing that will stimulate asset prices “mildly” but will not be as dramatic as the “big print” that many in the Bitcoin (BTC) community anticipated, according to economist and Bitcoin advocate Lyn Alden.

“My base case is roughly in line with what the Fed expects: to grow its balance sheet approximately at the same proportional pace as total bank assets or nominal gross-domestic product (GDP),” Alden said in her Feb. 8 investment strategy newsletter, adding:

“Overall, it means I continue to want to own high-quality scarce assets, with a tendency to rebalance away from extremely euphoric areas and toward under-owned areas.” 

Federal Reserve M2, a measure of the money supply, continues to expand with time. Source: FRED

The comments followed US President Donald Trump’s nomination of Kevin Warsh to be the next Federal Reserve Chairman, which caused a furor among market traders, who perceived Warsh as more hawkish on interest rates than other potential Fed picks.

Interest rate policy can influence crypto prices. Expanding credit by increasing the money supply is typically seen as bullish for assets, and a contraction of the money supply through higher interest rates typically leads to economic slowdown and lower prices.

Related: Bitcoin investor sentiment cools amid US shutdown fears, Fed policy jitters

No rate cut expected at next FOMC meeting

Some 19.9% of traders expect an interest rate cut at the next Federal Open Market Committee (FOMC) meeting in March, down from Saturday, when CME Fedwatch showed 23% of respondents forecast a rate cut. 

Target rate probabilities ahead of the March FOMC meeting. Source: CME Group

Current Federal Reserve Chairman Jerome Powell has repeatedly issued mixed forward guidance about interest rate policy despite slashing rates several times in 2025. 

“In the near term, risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation. There is no risk-free path for policy,” Powell said following the December FOMC meeting.

Powell’s term as Federal Reserve chairman expires in May 2025, and Warsh has yet to be confirmed as the next chairman by the US Senate, fueling investor uncertainty about the direction of interest rate policies in 2026.

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