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Is Bitcoin Really Safe? New Insights from ‘Black Swan’ Author on Recent Crash
Bitcoin has led a global crypto market downturn in the past few days, with the asset down to as low as $49,751 on August 5. This significant plunge from Bitcoin has been attributed by many to the downturn in the Japanese markets.
The Trigger in Japan
Speaking on the crash, Nassim Nicholas Taleb, a risk analyst, author of “The Black Swan” and a well-known Bitcoin detractor, sheds light on the origins of the recent market disruptions that have rippled through to cryptocurrencies.
On Monday, the Japanese stock market fell severely, dropping by more than 10%. The report said this plunge came “amid risk from a stronger yen, tighter monetary policy, and concern over the US recession.”
• IS BITCOIN SAFE ?
Bitcoin dipped to a 7-month low during the global market plunge, dropping below $50,000. This fall impacted the crypto market so much that the total liquidations surpassed $1 billion.
Given this significant negative impact attributed to the plunge in the Japanese market, some might question if Bitcoin is still safe, especially as a safe haven.
However, it is worth noting that Bitcoin has since proved to be a digital asset worth considering as a safe haven when it comes to times like this. In March 2023, when major banks in the US were collapsing, Bitcoin saw a rise to as high as $29,000—a notable increase from its lowest levels below $20,000 that month.
Institutional Investors Buy The ETH Dip as Spot ETF Flows Turn Positive:
Institutional investors appear to be buying the dip as spot Ethereum exchange-traded funds flip back to positive inflows, but the same can’t be said for Bitcoin funds.
U.S. spot Ethereum ETFs had a positive day of inflows following a massive market crash that sent the asset tumbling 23% in less than 24 hours.
On August 5, the aggregate inflow for the nine newly launched spot ETH ETFs was $49 million, its second-highest inflow day since the funds started trading.
Additionally, it is only the fourth day of inflows in the past ten days of trading, suggesting that institutional investors were indeed buying the Ethereum dip.
Moreover, the notion was confirmed by ETF specialist James Seyffart in a post on X on August 6.
“ETF investors, in aggregate, likely bought the dip on Ethereum today.”
“Whales are preparing for the next altcoin rally” — CryptoQuant founder:
CryptoQuant founder Ki Young Ju believes that crypto whales are positioning themselves in anticipation of the next altcoin rally as traders hotly debate when altseason will begin.
Ju’s analysis centered around the one-year cumulative buy/sell quote volume difference for altcoins, a metric that measures the differential between buy and sell limit orders using a one-year timespan.
The analyst explained that whales prefer limit orders to avoid slippage, and the rising level of the metric suggests an increasing number of buy-limit orders among large crypto investors and institutions, representing “strong buy walls” of future demand for altcoins.
DeFi is “waking up again” — Active loans return to 2022 levels DeFi may be experiencing a revival, with key metrics such as active loans and total value locked (TVL) on the rise since their more recent lows in 2023.
Crypto market analytics platform Token Terminal proclaimed that “DeFi is waking up again” in a July 31 post on X.
It backed up this claim with charts and statistics, one of which was for active loans, which have returned to levels not seen since early 2022, at around $13.3 billions.
Morpho secures $50 million funding led by Ribbit Capital for onchain lending Decentralized finance protocol Morpho Labs has raised $50 million in funding following a recent revamp of its business.
The round was led by Ribbit Capital with participation from a16z Crypto, Coinbase Ventures, Variant, Pantera Capital, Kraken Ventures and other investors. Morpho Labs had previously raised $23.6 million across multiple funding rounds, including an $18 million Series B funding round a16z and Variant in 2022.
The funds will be used to support the recently launched Morpho Blue, a permissionless lending protocol that allows entities to create and manage their own markets without needing prior approval from any central authority. The solution also offers vaults that can be tailored with specific risk management parameters.
Hackers Exploit Market Crash to Buy Discounted Ethereum (ETH)
Hackers are busy exploiting the crypto market downturn to buy discounted Ethereum (ETH) with stolen funds. Meanwhile, the Australian Federal Police (AFP) is investigating a surge in crypto phishing scams, while WazirX is facing backlash over its proposed solution after a $230 million hack. Additionally, Australian prosecutors are seeking jail time for a Crypto.com user who mistakenly received close to $7 million and spent it before the error was discovered.
Crypto hackers have seized the ongoing market crash as an opportunity to buy discounted Ethereum (ETH) by using stolen funds from previous heists. On Aug. 5, 16,892 ETH was bought using stolen cryptocurrency linked to the Nomad bridge hack from August of 2022. This happened as ETH's value plummeted by more than 21% over the past 24 hours of trading.
DeFi Sector Takes a Hit as Jump Crypto Begins Shuffling Millions in Funds;
Most tokens in the DeFi category have fallen between 18% and 23%, marking their worst single-day performance since April
Top cryptos within the decentralized finance sector witnessed a strong sell-off late Sunday as the crypto arm of proprietary trading firm Jump Trading began moving millions of dollars to exchanges
Recessionary fears led to a substantial sell-off in U.S. equity markets on Friday, with the unemployment rate rising to 4.3% in June, triggering global market declines, including a 5.5% drop in Japan's Nikkei 225.
Trump's Bitcoin Strategy Comes Under Fire By Peter Schiff: If Ex-President Intended To Start A Strategic Reserve 'He'd Have Kept His Intention A Secret'
Well-known economist Peter Schiff questioned the real intentions behind former President Donald Trump‘s strategy of holding onto Bitcoin BTC/USD
What Happened: On Monday, Schiff took to X to voice his doubts about Trump’s plan to use seized Bitcoin to start a strategic U.S. reserve. He cast aspersions that if Trump truly intended to implement this strategy, he would have kept it under wraps until he was back in office.
“Now that the Biden administration is wise to his plan, they’ll make sure to sell every Satoshi before Trump takes office,” the Bitcoin skeptic remarked
Crypto Whales Are Getting Ready for a Bull Market – Here’s What They’re Buying
• According to Ki Yong Ju, CEO of CryptoQuant, crypto whales are positioning themselves for the next expansion of the altcoin market.
He claims that the whales are creating limit orders for altcoins on centralized exchanges (CEX) to avoid slippage and secure the best prices. Unlike market orders, limit orders buy an asset at a predetermined price and only execute once that price is reached.
Ju also stressed that monitoring the volume of limit order quotes could show growing “buy walls,” signaling preparations for an altcoin rally.
He noted that time will be limited for those looking for discounts in altcoins once Bitcoin (BTC) breaks its all-time high (ATH):
Buy walls are forming in altcoins for both stablecoin and Bitcoin pairs, but volumes are still low. If altcoin season means a sharp increase in volumes, it hasn’t arrived yet. Now is the time to explore promising altcoins for the next bull market – timing may be short once Bitcoin reaches a new ATH.
Zhu compared Bitcoin’s current state to mid-2020, when it was trading in a range without retail-induced excitement. He advises patience as bullish periods are often short, powerful and sudden.
Ripple, the leading developer of XRP Ledger (XRP) and the token’s largest holder is ready to sell 200 million XRP in August, worth around $110 million at current prices. This massive sell-off, if it happens, can create significant selling pressure on spot markets, potentially holding the XRP price down.