It's been a busy week, from Ethereum and Bitcoin price action to Crypto.com backing out of its $495 million UEFA Champions League sponsorship, Snap scrapping its web3 team and analysts' latest views on Coinbase. Scroll down to catch up on all things crypto with IBD's weekly cryptocurrency news wrap-up.
Be sure to also check this week's coverage of cryptocurrency ETFs like BITQ, BLOK and BITS.
Click here for the latest Cryptocurrency Prices and News. And if you're new to the world of Bitcoin, Ethereum, blockchain and more, stop by our What Is Cryptocurrency page.
Cryptocurrency Price Action
Bitcoin fell below $19,900 Friday afternoon after bouncing as high as $20,436 during the day. BTC is still well below its August high near $25,000. The world's largest cryptocurrency is down roughly 55% so far this year.
Ethereum hit $1,648 in the first few hours of trading on Friday but tumbled back to $1,555 by market close. It's struggled to hold the $1,600 level since falling from its mid-August high of $2,000. ETH, for the most part, has been on the upswing after successfully transitioning its Goerli network to proof-of-stake. Goerli marked the final test network before the official merge to a PoS blockchain, which was expedited to September 15. But the price of Ethereum still generally trends with the dips and jumps of the broader crypto market.
Cryptocurrency Prices Heatmap:
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Digital asset investments are extremely volatile. While cryptocurrency's fundamentals and technical indicators may differ, investors should focus on the same key objectives. First, stay protected by learning when it's time to sell, cut losses or capture profits. Second, prepare to profit if the cryptocurrency starts to rebound.
Despite their original promise, cryptocurrencies haven't acted as hedges against inflation. Instead, they've trended with the broader indexes. Read The Big Picture and Market Pulse to track daily market trends.
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Celsius Requests To Return $225 Mil To Users
Crypto lender Celsius Network wants court permission to return digital assets to some users, according to the latest bankruptcy court proceedings.
Celsius requested the judge's permission to release cryptocurrencies in its custody program and withhold accounts, which are used for storage rather than generating returns. Roughly $210 million in assets are held in custody program accounts and $15 million in withholding accounts, according to reports. The company says those cryptocurrencies are owned by the customers, not the company. A hearing on the request is scheduled for October 6.
Celsius managed $11.8 million in digital assets under management in May. But it froze withdrawals and transfer activity in June, citing extreme market conditions. By July 13 the lender filed for chapter 11 bankruptcy protection.
Roche Withdraws From Several Cases After Crypto Leaks Report
Kyle Roche, founding partner of the Roche Freedman law firm, filed to withdraw as counsel from several of his cryptocurrency class-action lawsuits. The move comes days after whistleblower site Crypto Leaks released videos of Roche discussing a scheme to collect info on Ava Labs' competition as fodder for lawsuits.
Roche and Ava Labs founder Emin Gun Sirer have both denied the contents of the report. Roche said the videos were obtained illegally, highly edited and presented without context.
But days later, Roche withdrew as the attorney in cases against Tether, Binance, Bitfinex, Tron Foundation and HDR Global Trading (which owns the BitMEX trading platform), according to reports. And in the court filing, Roche said he is no longer involved in Roche Freedman's class action practice.
Snap Shuttering Its Web3 Team
Snap is shutting down its web3 division as part of the company's restructuring plan to cut 20% of its workforce. Jake Sheinman, a co-founder of Snap's web3 program, announced the project is being sunsetted on Twitter.
Snap's web3 program launched last year and the Financial Times reported it planned to integrate NFTs for filters and other augmented reality capabilities.
The company will still focus on AR as one of its three strategic priorities, which also includes community and revenue growth. "Projects that don't directly contribute to these areas will be discontinued or receive substantially reduced investment," Snap CEO Evan Spiegel wrote in a note to employees.
Crypto.com Backs Out of $495 Mil UEFA Champions League Sponsorship Deal
Crypto.com has backed out of a $495 million sponsorship deal with the UEFA (Union of European Football Associations) Champions League just before kickoff, according to reports from SportsBusiness. The cryptocurrency exchange entered a principal agreement with Europe's largest annual soccer tournament for a five-season sponsorship earlier this summer that was worth around $99 million per year.
Crypto.com was set to take over as a primary sponsor for Russian gas company Gazprom, whose deal the league canceled in March following Russia's invasion of Ukraine. But regulatory concerns in the U.K., France and Italy, as well as legal issues regarding the scope of its licenses caused Crypto.com to scrap the deal, according to reports. The exchange is still sponsoring the 2022 FIFA World Cup this winter, after signing on to a deal in March.
Ticketmaster Expands Flow Partnership
Ticketmaster is expanding its partnership with Dapper Labs' Flow blockchain to allow organizers to issue digital collectibles before, during and after live events.
The feature gives fans the opportunity to buy digital keepsakes that can be activated to access unique loyalty rewards, VIP opportunities and more, while organizers get a new way to engage with fans, Ticketmaster says.
Ticketmaster selected Flow to mint the collectible NFTs. Its blockchain is leading the sports-crypto race and has deals with the NFL, NBA and UFC. The pair previously partnered for Super Bowl LVI, where they distributed 70,000 commemorative NFTs for attendees. To date, Ticketmaster has minted upward of 5 million NFTs for organizers on Flow.
Michael Saylor, MicroStrategy, Sued For Tax Fraud
Washington D.C. Attorney General Karl Racine is suing tech billionaire and former MicroStrategy CEO Michael Saylor for tax fraud, according to an announcement Wednesday afternoon. Saylor allegedly evaded more than $25 million in D.C. taxes for more than 15 years by pretending to be a resident in other jurisdictions.
The lawsuit also names MicroStrategy as a defendant, claiming the software company knew Saylor was a D.C. resident and collaborated with him to facilitate his tax evasion.
The Office of the Attorney General says it's seeking to recover unpaid income taxes and penalties from Saylor and MicroStrategy, which could total more than $100 million.
At the beginning of August, Saylor stepped down from his role as CEO to become executive chairman after MicroStrategy reported $1.9 billion in losses from Bitcoin investments. MSTR stock fell 1.3% on Friday to $218.06 by market close. Shares are down 12.5% this week on the falling price on Bitcoin and lawsuit news.
Analysts Weigh In On Coinbase
It's been a tough year for Coinbase. The crypto exchange reported more than $1 billion in losses in its Q2 report as the company suffered from the falling price of Bitcoin. And it's facing an SEC probe over the potential sale of unregistered securities. But Coinbase's partnership with BlackRock, providing an institutional investing platform, has given it a boost. And CEO Brian Armstrong is confident the company can navigate the current crypto winter. But analysts have very different outlooks on Coinbase.
On Wednesday, Barclays analyst Benjamin Budish initiated coverage on COIN stock with an $80 price target with an Equal Weight rating on the shares. In an initial note to clients, Budish says he has a positive view for the brokers, asset managers and exchange space. He sees the strongest trends in the alternative asset management space, where institutional and retail allocations remain low and business models work well in all environments. While brokers are much more macro driven, "at the moment we should see improving margins from higher rates," Budish wrote. He also noted that crypto "could still be at the very beginning of a multi-decade transformation in IT and financial services." But warned the near-term outlook could be more challenging and that there is some regulatory risk for Coinbase.
The Bad Case For Coinbase
Mizuho analyst Dan Dolev is more pessimistic about the exchange. He says Coinbase's trading volume continues to disappoint and its market share "continues to dwindle," falling steadily over the past few quarters. Coinbase's market share has declined 3% so far in the third quarter, after falling 4% in Q2 and 7%-8% last November, Dolev stated in a research note. "This is happening despite considerable spend on marketing, which does not appear to be moving the needle," he wrote. Dolev has a $42 price target for COIN stock with a Neutral rating.
FBI Warns cybercriminals Are Targeting DeFi Platforms
The FBI is warning investors that cybercriminals are increasingly exploiting vulnerabilities in decentralized finance platforms to steal cryptocurrency. In a release earlier this week, the agency said it's observed criminals are utilizing flaws in smart contracts to steal digital assets and causing investors to lose money.
The FBI said cybercriminals stole $1.3 billion in cryptocurrencies between January and March this year, 97% of which were taken from DeFi platforms. That's up 72% from 2021 and 30% from 2020, respectively. Most of the theft has come from criminals manipulating contract code, exploiting cross-chain functions (like bridges) and taking advantage of the open-source nature of some DeFi Platforms.
Investors should research the platforms, protocols and smart contracts before getting involved, the FBI says. As well as know the specific risks involved with DeFi instruments. It also recommends only using DeFi platforms that have at least one independent code audit to identify platform weaknesses. And to be aware of potential risks for open source code repositories and crowdsourced solutions.
Bitcoin Mining Difficulty Jumps
Bitcoin's mining difficulty jumped nearly 9.3% on Wednesday to its highest level since early May, according to mining pool BTC.com. The difficulty to mine Bitcoin rose to 30.98 T from its level of 29.35 T as of mid-August, which is often an indicator that more miners are coming online.
The difficulty rate helps control the supply of Bitcoin mining and ensure blocks are validated roughly every 10 minutes. As more miners hop online and compete to validate blocks, the difficulty rises. And the opposite occurs if miners suspend operations, the difficulty rate falls as competition slows. This adjustment occurs after 2,016 blocks are validated, or about every two weeks.
Bitcoin's mining difficulty rose for most of 2021, but began to see declines in February of this year. Many miners cut back on operations this year as profitability fell with the price of Bitcoin. And in Texas, companies like RIOT have suspended operations for inclement weather and to help stabilize the energy grid.
Number of Cryptocurrencies Jumps 70%
Even in the midst of the current downturn, the number of cryptocurrencies worldwide has spiked 70% over the past year, according to data compiled by Statista and Investing.com, and reported in the AugustaFreePress. The recent crash wiped out $2 trillion in value and brought the total crypto market cap below $1 trillion.
But still, the total number of cryptos jumped to 10,000 as of August, from 5,840 last year. Between November 2021 and February, the number of digital currencies rose to 10,397 from 7,557, even as the prices tumbled from all time highs.
The decline between February and August is only the second time the number of cryptocurrencies has decreased. The first was from July 2021 to last August, when the total dipped from 6,044 to 5,840.
While there's tons of currencies out there, 75% of crypto's value is in the top five coins. Bitcoin and Ethereum still dominate the space, taking up 40% and 20% of the market, respectively. Stablecoins Tether and USD Coin, along with Binance's BNB token are the next three largest. Together they account for 16% of the global market cap.
Ava Labs CEO, Roche Freedman, Deny Allegations
Ava Labs CEO Emin Gun Sirer denied allegations from Crypto Leaks that the blockchain company hired a law firm to sue its competitors. And Kyle Roche, CEO of the Roche Freedman legal practice in question, says the report included highly-edited video clips that were taken out of context.
In a Medium post, Sirer wrote, "These claims evidently came about when Kyle Roche, a lawyer at a firm we retained in the early days of our company, tried to impress a potential business partner by making false claims about the nature of his work for Ava Labs."
Animoca Brands Raises $100 Million
Animoca Brands, the Hong Kong-based blockchain investment giant is getting even, well, gianter. The company raised $100 million from Temasek, a state-owned holding company in Singapore, according to reports from Bloomberg. The latest round comes just days after Animoca raised $45 million for its Animoca Brands Japan subsidiary, which will focus on growing the country's NFT market and ecosystem.
Animoca's portfolio includes over 340 blockchain companies, games and NFT projects. Its latest valuation from July pegs the company at $5.9 billion. And the Temasek round brings its funding total to $789.2 million, according to FactSet data. Animoca previously traded on Australia's ASX. But it delisted in March 2020 and its stock is no longer traded publicly.
Cryptocurrencies Aren't Hedging Against Inflation
Cryptocurrencies were designed to act as hedges against inflation. But that hasn't been the case lately. There's been a strong correlation between digital assets and the stock market's ups and downs during the latest crypto winter. That could signal more pain for Bitcoin, according to analytics firm Chainalysis.
Ava Labs Hires Lawyers To Litigate Competition
Ava Labs, the company behind the Avalanche blockchain, allegedly hired lawyers to sue its competition and hold off regulators. According to a report published by cryptocurrency whistleblower site Crypto Leaks, Ava Labs hired the Roche Freedman law firm to file class action lawsuits against the likes of Binance, Solana Labs and the Dfinity Foundation.
Roche Freedman, led by CEO Kyle Roche, accepted millions in Ava Labs stock and Avalanche's AVAX cryptocurrency to collect confidential info on other companies to pursue class action lawsuits. Roche Freedman filed at least 25 cases to harm the competition and keep regulators distracted from Ava Labs' operations, says the report. Crypto Leaks included videos of Roche admitting to the scheme, which reportedly began in August of 2019. AVAX fell to $18 as of early Monday, from $20.20 on Friday following the report.
Crypto ETF Technical Charts
Cryptocurrency ETFs have risen in popularity to help mitigate the volatility of digital investments. IBD has selected the three best crypto ETFs near key chart levels. Take a look at the technical analysis of BITQ, BLOK and BITS.
Nvidia To Lose Crypto Mining Revenue?
Fabless chip giant Nvidia has built its core business on graphics processing units, which handle image rendering on computers. The units are crucial for gamers who want top-of-the-line graphics for their games. During the pandemic-triggered chip shortage, the global boom in crypto mining sent GPU demand skyrocketing even higher.
Nvidia, a leader in the space, created a special line of mining cards to maintain its supply for gaming customers. Now, as protocols move away from mining, Nvidia says it doesn't see crypto mining in its larger plans.
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