Hodler’s Digest, April 7-13 – Cointelegraph Magazine

Top Stories This Week

SEC issues Wells notice to DeFi protocol Uniswap

The U.S. Securities and Exchange Commission (SEC) issued a Wells notice to decentralized exchange (DEX) Uniswap on April 10. A Wells notice is a formal indication from the SEC that it plans to recommend enforcement action. The SEC has been investigating Uniswap Labs, the main developer behind Uniswap, since 2021. In response to increasing regulatory scrutiny, the platform has previously removed several tokens from its listing. The DEX’s native token, Uniswap (UNI), fell 10% in the hours following the news, reaching a six-week low.

Technical charts suggest a roaring altseason may be just ahead: Analysts

Crypto’s famed “altseason” could be coming very soon, according to market analysts. On April 11, pseudonymous trader and analyst Rekt Capital observed that the altcoin market cap “has been the only constant” despite Bitcoin’s price whipsawing over the past few weeks. It has been consistently retesting the $315 billion level as support for weeks now, he added. Historically, altcoin price appreciation lags Bitcoin, and charts such as the altcoin market capitalization and Bitcoin dominance can provide traders some signals for when altcoins may be moving into a bull season of their own.

BTC halving to fuel ‘raging firesale of crypto assets’ — Arthur Hayes

April’s Bitcoin halving, combined with a “bag of tricks” from the United States Federal Reserve and the Department of the Treasury, will “add propellant to a raging firesale of crypto assets” and depress the crypto market for weeks, says BitMEX co-founder Arthur Hayes. In an April 8 blog post, Hayes wrote he believed the Bitcoin halving would “pump prices in the medium term” but warned crypto prices “directly before and after could be negative.” Hayes believes that the halving is also coming at a time when “dollar liquidity is tighter than usual” and outlined his theory on how the U.S. Federal Reserve and Treasury policies impact the markets.

Sam Bankman-Fried asks to stay in Brooklyn prison for appeal

Former FTX CEO Sam “SBF” Bankman-Fried, recently sentenced to 25 years in federal prison, has requested a judge allow him to temporarily remain incarcerated in the New York City area instead of California. According to the legal team, SBF wanted to stay at the Brooklyn prison to “facilitate access to his appellate counsel” as part of his expected appeal for his conviction and sentencing. Some legal experts have also suggested that the former FTX CEO could have years knocked off his time in prison based on good behavior.

FTX co-CEO Salame’s sentencing moved to end of May

Sentencing for former FTX co-CEO Ryan Salame has been rescheduled for May 28, according to a filing in the Southern New York District Court. Salame was one of the four FTX top managers to be charged by the United States government, along with Sam Bankman-Fried, in relation to the cryptocurrency exchange’s collapse. Salame has pleaded guilty to federal charges relating to the FTX debacle. In addition, he faces charges of campaign finance violations connected with his girlfriend Michelle Bond’s unsuccessful bid to represent New York’s First District in the House of Representatives. Salame is free on a $1 million bond.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $67,683, Ether (ETH) at $3,273 and XRP at $0.54. The total market cap is at $2.46 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Neo (NEO) at 25.93%, Toncoin (TON) at 24.51% and Nervos Network (CKB) at 23.08%. 

The top three altcoin losers of the week are Core (CORE) at -38.99%, Wormhole (W) at -38.71% and Uniswap (UNI) at -28.98%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“We expect persistent inflation and unsustainable budget deficits to contribute to continued demand for store of value assets, like Bitcoin.”

Zach Pandl, managing director of research at Grayscale

“The banks will backdoor themselves into stablecoins […] and they’ll lobby for stablecoin legislation and make it happen along the way.”

Ryan Sean Adams, crypto investor

“There’s a lot of maturation to happen. A lot of technology will be developed on-chain, so there’s a long way to go.”

Jan van Eck, CEO of VanEck

“Today’s Wells notice against Uniswap is disappointing, but is not unexpected from this SEC.”

Marvin Ammori, chief legal officer at Uniswap

“Bitcoin now has a place at the table alongside gold, farmland, and other alternative assets. Back up five years ago, and there is no chance that Bitcoin would even make the first cut for consideration. That’s big progress.”

Lucas Kiely, chief investment officer at Yield App

“The narrative of the halving being positive for crypto prices is well entrenched. When most market participants agree on a certain outcome, the opposite usually occurs.”

Arthur Hayes, co-founder of BitMEX

Prediction of the week

Bitcoin derivatives metrics suggest $70K is here to stay

Since March 25, Bitcoin has struggled to maintain its value above the $71,000 mark, a trend that some may view as a sign of bearish momentum. Nevertheless, insights from the BTC derivatives market reveal a more stable environment, as the previous atmosphere of rampant optimism has notably subsided.

Currently, Bitcoin finds it challenging to hold its ground above the $70,000 threshold. Yet, certain analysts believe that the recent U.S. inflation figures — showing unexpected resilience — and the unsustainable U.S. government fiscal trajectory create an ideal backdrop for investing in scarce assets.

Bitcoin critics suggest that the recent drop in the S&P 500 index from its all-time high of 5,265 on March 28 may signal an upcoming economic downturn. Given the strong correlation between Bitcoin and the stock market, which has been over 80% in the past month, Bitcoin’s price might initially fall if stock market issues continue.

Data from the past few weeks shows that put options have consistently been outpaced by call options, with a significant 35% average volume disparity. This indicates a lower demand for protection against a price decline, an intriguing trend considering Bitcoin’s multiple tests of the $64,500 support level in early April.

FUD of the Week

Ether ETFs will ‘probably be rejected’ in May — VanEck CEO

The chief executive of investment firm VanEck said it’s unlikely the United States Securities and Exchange Commission will approve spot Ether exchange-traded funds (ETFs) in May. In an interview with CNBC, Jan van Eck said his firm’s spot Ethereum ETF application will “probably be rejected.” He noted that VanEck was the first to file for a spot Ether ETF in the United States alongside Cathie Wood’s ARK Invest, both of which are awaiting a final decision on May 23 and May 24, respectively.

Mango Markets heist like a fake diamond ring scam: Prosecutor

Prosecutors have accused Avraham “Avi” Eisenberg of executing a fraudulent $110 million exploit of the Solana decentralized exchange Mango Markets, comparing it to a fake diamond ring scam. During opening arguments in a Manhattan federal court, U.S. Assistant Attorney Tian Huang labeled Eisenberg’s actions on Oct. 11, 2022, as fraud and market manipulation. In contrast, Eisenberg contended that his trading strategy was highly profitable and legal, emphasizing that it involved genuine open market actions. His defense highlighted that Eisenberg had risked $13 million of his own money, which he could have completely lost if the trade had not succeeded.

Former Ethereum adviser files $9.6B lawsuit against US gov’t

Steven Nerayoff, an early Ethereum adviser, has initiated a lawsuit against the U.S. government, claiming wrongful charges and mistreatment by federal agents from 2019 to 2023. He’s seeking $9.6 billion in damages, stemming from an extortion case against him that was dismissed in May 2023. Nerayoff has accused some federal agents of knowingly pursuing baseless charges, engaging in harassment, intimidation, and even fabricating evidence. He argues the damage to his reputation and business ventures justifies the lawsuit under the Federal Tort Claims Act.

Top Magazine Pieces of the Week

1 in 6 new Base memecoins are scams, 91% have vulnerabilities

Trying to hit the memecoin jackpot trading tokens on Base? A honeypot or rug pull is more likely.

Filecoin staking platform busted, Matrixport says ‘short ETH’: Asia Express

Staking platform’s Filecoin missing after Chinese police heist, Matrixport bets against ETH, HashKey gets retail trading license in Hong Kong, and more.

Synthetix founder Kain Warwick: It’s DeFi that’s wrong, not the market

Synthetix founder Kain Warwick has a bold plan to make DeFi as easy as using an exchange.