Crypto World
TradFi Deleveraging Triggered Feb 5 Crypto Crash
Bitwise advisor Jeff Park attributed the February 5 crypto selloff to multi-asset portfolio deleveraging rather than crypto-specific factors.
Summary
- February 5 selling was driven by multi-asset fund deleveraging, not crypto-native fear.
- CME basis trades unwound violently as pod shops de-grossed across portfolios.
- Short gamma and structured product hedging amplified downside despite ETF inflows.
IBIT recorded 10 billion in trading volume, doubling its previous high, while options activity hit historic levels led by put contracts rather than calls.
The crash saw Bitcoin (BTC) fall 13.2% yet IBIT posted $230 million in net creations with 6 million new shares, bringing total ETF inflows above $300 million.
Goldman Sachs’ prime brokerage desk reported February 4 was one of the worst daily performances for multi-strategy funds with a z-score of 3.5. This was a 0.05% probability event 10 times rarer than a three-sigma occurrence.
Park wrote that risk managers at pod shops forced indiscriminate de-grossing, explaining why February 5 turned into a bloodbath.
CME basis trade unwinding drove violent deleveraging
Park identified the CME basis trade as a primary driver of selling pressure. The near-dated basis jumped from 3.3% on February 5 to 9% on February 6, one of the largest moves observed since ETF launch.
Multi-strategy funds like Millennium and Citadel hold large positions in the Bitcoin ETF complex and were forced to unwind basis trades by selling spot while buying futures.
IBIT showed tight correlation with software equities rather than gold over recent weeks. Gold is not typically held by multi-strategy funds as part of funding trades, confirming that drama centered on these funds rather than retail investment advisors.
The catalyst originated from software equity selloffs rather than crypto-native selling.
Structured products created crypto bloodbath
Structured products with knock-in barrier features contributed to selling acceleration. A JPMorgan note priced in November carried a barrier at $43,600.
Notes priced in December when Bitcoin dropped 10% would have barriers in the $38,000-$39,000 range.
Put buying behavior in crypto-native markets over preceding weeks meant crypto dealers held naturally short gamma positions.
Options were sold too cheaply relative to outsized moves that eventually materialized, worsening the downside. Dealers held short gamma on puts from the $64,000-$71,000 range.
February 6 recovery saw CME open interest expand faster than Binance. The basis trade partially recovered, offsetting outflow effects while Binance open interest collapsed.
Park concluded that tradfi derisking was the catalyst that pushed Bitcoin to levels where short gamma hedging ramped up declines through non-directional activity requiring additional inventory.
Google worldwide search volume for “crypto” is hovering near a one-year low as investor sentiment cools amid a broad market downturn that has trimmed the crypto market’s total capitalization from a peak above $4.2 trillion to roughly $2.4 trillion. The global Google Trends reading for crypto sits at 30 out of 100, with the 12-month high of 100 last reached in August 2025 when market fervor and valuations were at their peak. In the United States, the pattern mirrors the wider trend but with its own rhythm: after a July high of 100, US search interest dipped below 37 in January and then rebounded to 56 in the first week of February. Taken together, these metrics paint a cautious mood among retail and institutional participants alike.
Google search data has long been used by market observers as a proxy for investor interest and potential turning points, aligning with sentiment gauges such as the Crypto Fear & Greed Index. As liquidity has cooled and volatility has persisted, traders and long-term holders have faced a challenging environment where on-chain activity and capital flows tighten alongside waning enthusiasm for risk-on bets in the crypto space. The juxtaposition of dwindling searches with continuing headlines about market stress underscores a market that remains sensitive to macro headlines, policy signals, and evolving risk appetites.
Google search data is often used as a gauge of investor sentiment and corroborates other indicators that track crowd psychology across the crypto market. As the broader market contends with macro headwinds, retail chatter and social signals continue to reflect a cautious stance, even as some pockets of volatility persist.
Investor sentiment craters as Fear & Greed Index hits record lows
The Crypto Fear & Greed Index plunged to a record low of 5 on Thursday, before ticking up to 8 by Sunday, according to CoinMarketCap. Both readings sit in the “extreme fear” territory, signaling widespread risk aversion among market participants. The latest readings echo sentiment conditions observed during past downturns, including periods that followed the Terra ecosystem collapse and the associated de-pegging event in 2022. CoinMarketCap notes that extreme fear can coexist with abrupt bursts of selling pressure, creating environments where short squeezes and liquidity gaps become more pronounced.
In broader terms, sentiment has moved in lockstep with price action and liquidity constraints. The market’s mood now resembles the climate seen after the Terra collapse, when contagion fears and leverage-induced liquidations amplified downside pressure. The Terra incident, which destabilized the Terra ecosystem and its dollar-pegged stablecoin, remains a reference point for how quickly confidence can erode in a highly correlated sector. The event set in motion cascading liquidations that helped accelerate a protracted bear phase in 2022, a period that many participants say still informs risk management and portfolio construction today.
The dialogue around sentiment is also fed by data-driven signals from analysts tracking social conversations and on-chain indicators. Santiment has highlighted a sharp decline in positive versus negative commentary, with crowd sentiment skewing heavily negative as traders search for a bottom to time their entries. While some investors seek capitulation points as an opportunity to accumulate, others remain wary of premature bets in an environment where liquidity can tighten quickly and price swings remain pronounced.
The broader mood is reinforced by market structure data: daily aggregate crypto trading volume has fallen markedly from a high near $153 billion on Jan. 14 to around $87.5 billion most recently, underscoring the retreat in participation and the challenge of sustaining momentum in a risk-off regime. These shifts in activity, combined with sentiment indicators, paint a picture of a market that remains fragile and sensitive to macro catalysts and policy developments. Investors are paying closer attention to how institutions and retail players reposition their risk budgets in the face of ongoing volatility and mixed fundamentals.
Why it matters
At a fundamental level, the convergence of weak search interest, suppressed trading volumes, and extreme fear in sentiment indices matters for participants across the crypto ecosystem. For traders, the current environment reinforces the importance of risk controls, liquidity considerations, and disciplined position sizing, given the potential for rapid shifts if macro catalysts improve or if liquidity flows reaccelerate. For builders and developers, the mood underscores the need for clarity around use cases, real-world utility, and user acquisition strategies that can drive sustained engagement even when markets are challenged.
From a retail vantage point, the data suggest that casual interest is not being replaced by immediate price upside; rather, attention remains episodic, with bursts around major headlines and then a reversion to the mean. This dynamic can affect onboarding curves for new users and the cadence of education and tooling that platforms rely on to convert curiosity into participation. Meanwhile, for institutions, the subdued atmosphere might translate into more selective allocations, tighter diligence, and a wait-and-see posture as they gauge how the regulatory and macro landscapes unfold in the coming quarters.
The Terra episode remains a salient reminder of how quickly sentiment can flip when confidence erodes and liquidity drains. In such environments, risk models that emphasize stress-testing, collateral management, and scenario planning can be more valuable than outright exposure bets. Investors should remain mindful of the connections between search behavior, sentiment, and price action, recognizing that public interest can act as a leading indicator of potential market inflection—but not a reliable predictor on its own.
What to watch next
- Continuing Google Trends updates on crypto search interest (worldwide and US) to spot any turning points in public curiosity.
- Monitoring the Crypto Fear & Greed Index and related sentiment metrics on CoinMarketCap and comparable aggregators.
- Observing developments around Terra’s ecosystem and the future trajectory of LUNA, as well as any regulatory or governance signals affecting stablecoins and cross-chain liquidity.
- Watching liquidity dynamics and macro flows, including ETF-related product activity and institutional risk appetites, to gauge potential shifts in market participation.
Sources & verification
- Google Trends data for Crypto worldwide and US searches (Google Trends links in the article).
- CoinMarketCap Fear & Greed Index page for sentiment data.
- CoinMarketCap charts page for market volume trends.
- Terra ecosystem collapse coverage and its impact on market psychology and liquidity (2022 references cited in the article).
- Santiment research and weekly summaries on crowd sentiment and social signals.
Market reaction and key details
What the data collectively suggest is a crypto market that remains highly sensitive to macro dynamics, liquidity conditions, and high-profile narrative events. The decline from a peak market cap above $4.2 trillion to roughly $2.4 trillion reflects not only price moves but also a broad retrenchment in risk appetite and a retreat by weaker hands who fueled the late-2021 to mid-2025 hype cycle. The rebound in US search interest in early February indicates that public attention can snap back, but whether that translates into durable capital inflows remains uncertain. As one anchor of the ecosystem, Bitcoin (CRYPTO: BTC) continues to lead price discovery, even as broader market participation ebbs and flows in response to evolving fundamentals and sentiment.
Terra’s collapse and the subsequent liquidity shock provided a stark reminder of how correlated risk exposures can be, particularly when leverage is high and confidence deteriorates. The reverberations from that event still inform risk controls, governance discussions, and the pace at which new products attempt to attract capital in a cautious environment. In the near term, the market will likely hinge on macro signals, regulatory clarity, and the interplay between sentiment indicators and actual on-chain activity.
Why it matters (expanded)
For users and investors, the current climate underscores the importance of diversification, prudent risk management, and clear investment objectives. It also highlights the value of staying informed through reliable data sources and avoiding overreliance on short-term sentiment alone. For builders in the space, the message is to emphasize tangible use cases, security, and user-friendly tooling that can withstand periods of market stress. For the market as a whole, the ongoing scrutiny around liquidity, regulatory development, and institutional participation will shape the trajectory of adoption and the resilience of the sector to shocks.
Ultimately, the story is one of a maturing market that continues to wrestle with volatility, narrative risk, and the pace of innovation. As investors weigh risk-adjusted returns in a downbeat environment, the data offer a sober reminder: interest can surface quickly, but sustained participation requires credibility, resilience, and real-world utility that transcends cycles.
What to watch next
- Weekly updates on Google Trends for crypto and related terms to identify shifts in public interest.
- Monitoring the Fear & Greed Index for potential signals that market psychology is shifting toward a more constructive phase.
- Tracking Terra-related developments and the performance of its associated assets, including governance updates and liquidity restoration efforts.
Sources & verification
TLDR:
- Bitmine added 42,000 ETH in one week, reflecting sustained accumulation during heightened market volatility
- The latest 20,000 ETH purchase occurred near market lows, signaling strategic timing rather than reactive buying
- Staking remains central to Bitmine’s model, with projected annual rewards tied to validator expansion plans
- Bitmine equity trades below NAV despite rising ETH holdings and improving Ethereum network activity.
Bitmine Ethereum accumulation has gained attention as the firm increased exposure during a broader crypto market downturn.
The move reflects a disciplined strategy centered on long-term fundamentals, staking income, and balance sheet growth rather than short-term price action.
Bitmine Ethereum Accumulation Confirms Sustained Buying and Strategic Timing
Bitmine Ethereum accumulation accelerated during a period of sharp selling across digital asset markets. On-chain data showed the firm acquired 20,000 ETH from a Kraken hot wallet during heightened volatility.
The purchase, valued at approximately $41.98 million, occurred without public statements or coordinated messaging. Market participants identified the transfer after wallet activity was shared on X.
According to Lookonchain data cited in those posts, the transaction took place within hours of the broader market downturn. The timing suggested planned accumulation rather than reactive buying.
Over the same week, Bitmine added roughly 42,000 ETH in total. Holdings now approach 4.17 million ETH, reflecting consistent balance sheet expansion.
Charts shared across social platforms showed steady increases in ETH balances. There were no visible distribution patterns or abrupt reductions in holdings.
Liquidity during the period remained thin, with forced sellers present across major venues. Such conditions often allow long-term participants to accumulate supplies efficiently.
Bitmine’s approach aligned with historical institutional behavior during prior market drawdowns. Accumulation occurred quietly while sentiment remained cautious.
The absence of hedging activity reinforced the view that ETH was treated as a strategic reserve asset. Price volatility appeared secondary to position sizing.
Staking Strategy and Valuation Context Shape Bitmine Positioning
Bitmine Ethereum accumulation is closely linked to its staking-focused operating model. The firm emphasizes yield generation to reduce idle asset risk during price weakness.
Chairman Tom Lee stated that stakeholder income could reach $374 million annually. This projection depends on full deployment of the Made in America Validator Network in 2026.
Staked ETH provides recurring revenue regardless of short-term price movement. Validator participation also supports Ethereum network security and decentralization.
Ethereum network metrics continue to show resilience. Daily transactions recently reached 2.5 million, while active addresses climbed to one million.
Lee referred to the recent pullback as an attractive entry point during remarks shared on X. He cited growing validator participation and steady network usage.
Bitmine’s equity valuation presents an additional layer. Shares recently traded near $20.44, below the reported NAV per share of $21.25.
This places the stock at approximately 0.96 times MNAV. The discount suggests the market values Bitmine’s ETH holdings below spot value.
ETH rebounded to around $2,123, gaining nearly three percent intraday. However, Bitmine’s equity closed slightly lower, reflecting ongoing caution.
As volatility stabilizes, balance sheet growth, stakeholder income, and network fundamentals remain central to Bitmine’s positioning.
CoinDesk is hosting its second annual Consensus Hong Kong conference, and as always, we’ll have a number of policy-focused sessions. Are you in town? Find me on stage or around the show floor and say hi!
You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.
The narrative
CoinDesk’s annual Consensus Hong Kong conference will kick off this Wednesday with a speech from Hong Kong Chief Executive John KC Lee.
Why it matters
Hong Kong is playing an interesting role in the intersection of financial services between the global East and West. CoinDesk will be exploring that role at Consensus,
Breaking it down
We’ll be hearing from Financial Secretary Paul Chan and Securities and Futures Commission Chief Executive Julia Leung on day one of Consensus, and having conversations around the growth of real-world asset tokenization, stablecoins and evolving payment systems and how exchange-traded funds (ETFs).
Our speakers will include regulators and politicians from around the world, with panels looking at how both regulators and industry participants alike approach the sector — a conversation we’ve had every year at Consensus, but one that continues to evolve.
Privacy, artificial intelligence, decentralized finance and trading behaviors will also take one of the many stages throughout the conference.
It’ll be part of a busy week ahead: SEC Chair Paul Atkins will be testifying before the House Financial Services and Senate Banking Committees. Though the hearings are focused on SEC oversight generally, expect crypto and Atkins’ efforts to develop rulemakings around the sector to come up.
The White House is also convening yet another meeting between crypto and banking industry representatives. Not a lot of detail is available yet.
Tuesday
- The White House is convening a second meeting between representatives of the crypto and banking industries to discuss stablecoin yield concerns.
Wednesday
- 01:30 UTC (9:30 a.m. HKT) Day 1 of Consensus Hong Kong kicks off.
- 15:00 UTC (10:00 a.m. ET) The House Financial Services Committee is holding an oversight hearing with Securities and Exchange Commission Chair Paul Atkins.
Thursday
- 02:00 UTC (10:00 a.m. HKT) Day 2 of Consensus Hong Kong kicks off.
- 15:00 UTC (10:00 a.m. ET) The Senate Banking Committee is holding an oversight hearing with Securities and Exchange Commission Chair Paul Atkins.
If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at [email protected] or find me on Bluesky @nikhileshde.bsky.social.
You can also join the group conversation on Telegram.
See ya’ll next week!
Google worldwide search volume for “crypto” is hovering near one-year lows, reflecting weak investor sentiment amid a broad market downturn that reduced the total market capitalization of crypto from an all-time high of more than $4.2 trillion to about $2.4 trillion.
Worldwide search volume for “crypto” is 30 out of 100 at the time of this writing, with a reading of 100 indicating the highest level of search interest, which was last reached in August 2025 in parallel with the market capitalization high. The 12-month low is 24, according to Google Trends data.
Search volume in the US featured a similar pattern, with volume peaking at 100 in July and dropping to below 37 in January. However, US search figures diverged from worldwide volume data by surging back up to 56 in the first week of February.
The yearly low for the US is 32, which was recorded during the April 2025 market crash fueled by US President Donald Trump’s tariff policies.
Crypto market volume is down sharply, with total market volume dropping from a high of more than $153 billion on Jan. 14 to about $87.5 billion on Sunday, according to CoinMarketCap.
Google search volume data is often used as a gauge of investor sentiment and corroborates other sentiment indicators like the Crypto Fear & Greed Index, a market indicator used to measure crowd sentiment.
Related: Google search volume for ‘Bitcoin’ skyrockets amid BTC price swings
Investor sentiment craters as Fear & Greed Index hits record lows
The Crypto Fear & Greed Index hit a record low of 5 on Thursday, but inched up to 8 by Sunday, according to CoinMarketCap. Still, both levels signal “extreme fear” in the markets.
Crypto investor sentiment is now at the same levels it was following the collapse of the Terra ecosystem and its dollar-pegged stablecoin in 2022.
The collapse of Terra sent shockwaves through the crypto world, triggering a wave of cascading liquidations that accelerated the 2022 bear market.
Investors are currently searching for social signals that the crypto market has bottomed to time their entries, according to market sentiment analysis platform Santiment.
“Crowd sentiment is fiercely bearish. The ratio of positive to negative commentary has collapsed, with negative comments hitting their highest point since December 1st,” Santiment said in a report published Friday.
Magazine: If the crypto bull run is ending… It’s time to buy a Ferrari: Crypto Kid
TLDR:
- Bitcoin struggles at $70K, revealing weak buyer power amid high trading activity.
- BTC trades at $71,098 with $44.95B in 24-hour volume, showing strong market participation.
- Reclaiming $70K could trigger 8–10% rally toward $75K–$77K resistance zones.
- Failing $70K increases risk of testing mid-$60K support in the short term.
The price of Bitcoin (BTC) is $71,098.81 today, gaining 2.65% over the past 24 hours. However, BTC has fallen 9.04% in the last seven days, reflecting short-term volatility and resistance near the $70K level.
Trading activity remains high, with a 24-hour volume of $44.95 billion, signaling strong market engagement. Bitcoin is balancing upward momentum against broader weekly losses while determining the next potential market direction.
$70K: Key Resistance and Market Response
Bitcoin recently attempted to reclaim $70K, but the price faced rejection and could not sustain above this critical level. This shows that buyers were insufficient to absorb the supply concentrated in this zone.
Historically, decisive upward moves require serious, aggressive attempts. Weak responses often lead to temporary consolidation or minor pullbacks in the short term.
Below $70K, Bitcoin is trading in a low-liquidity area, where support remains limited until mid-$60K levels. Markets often retest recently broken levels after sharp impulse moves downward.
The failure to reclaim $70K increases the likelihood of revisiting this zone before any sustained upward attempt. Traders and analysts monitor these zones closely for structural signals rather than relying on emotional reactions.
If Bitcoin reclaims $70K with real acceptance, meaning sustained closes above the level, momentum continuation becomes clearer. Technical projections suggest an 8–10% move, targeting $75K–$77K.
This potential upward path would likely involve short covering and new buyers entering positions. Observing acceptance above $70K, rather than temporary wicks, is crucial for short-term direction.
Monthly Chart Structure and Conditional Paths
Monthly charts show Bitcoin losing key support after a parabolic advance. Historical cycles indicate hesitation below critical levels before accelerated downward moves.
Such pauses trap long-term investors and erode confidence gradually among market participants.
From 2021 to 2022, Bitcoin followed a similar pattern: strong uptrend, loss of key support, brief consolidation, then accelerated decline into demand zones.
Current action mirrors this structure, with low-$80K support broken and a potential downside expansion zone forming near historical demand areas.
Bitcoin’s short-term path depends on interaction with $70K. A decisive reclaim could trigger bullish continuation, while sustained rejection increases the likelihood of testing mid-$60K support.
Minor retracements allow accumulation for the next leg higher. Traders are advised to respect high-timeframe levels and focus on market structure rather than reacting to short-term volatility.
Crypto investors faced a sharp increase in sophisticated “signature phishing” attacks in January, with losses jumping more than 200%.
According to data from blockchain security firm Scam Sniffer, signature phishing drained approximately $6.3 million from user wallets in the first month of the year. While the raw count of victims fell by 11%, the total value stolen surged 207% from December levels.
Signature Phishing and Address Poisoning Wreak Havoc in January
This divergence highlights a tactical shift among cybercriminals toward “whale hunting.” The strategy involves targeting a smaller number of high-net-worth individuals rather than casting a wide net for smaller retail accounts.
Sponsored
Sponsored
Scam Sniffer reported that just two victims accounted for nearly 65% of all signature phishing losses in January. In the largest single incident, a user lost $3.02 million after signing a malicious “permit” or “increaseAllowance” function.
These mechanisms grant a third party indefinite access to move tokens from a wallet. This allows attackers to drain funds without requiring the user to approve a specific transaction.
While signature scams rely on confusing permissions, a separate and equally damaging threat known as “address poisoning” is also plaguing the sector.
In a stark example of this technique, a single investor lost $12.25 million in January after sending funds to a fraudulent address.
Address poisoning exploits user habits by generating “vanity” or “lookalike” addresses. These fraudulent strings mimic the first and last few characters of a legitimate wallet found in a user’s transaction history
The attacker hopes the user will copy and paste the compromised address from their history rather than verifying the full string.
The rise in these incidents prompted Safe Labs, the developer behind the popular multisig wallet formerly known as Gnosis Safe, to issue a security warning. The firm identified a coordinated social engineering campaign targeting its user base, using approximately 5,000 malicious addresses.
“We’ve identified a coordinated effort by malicious actor(s) to create thousands of lookalike Safe addresses designed to trick users into sending funds to the wrong destination. This is social engineering combined with address poisoning,” the firm stated.
Consequently, the firm warned users to always verify the full alphanumeric string of any recipient address before executing high-value transfers.
With crypto’s multi-month downturn accelerating into a freefall last week, bulls were frantically grasping for technical signals, or maybe yarns about the blowup of some leveraged hedge fund, that might signal a final bottom for this bear market.
Perhaps the ultimate sign of a bottom, though, might be the cheers arising from those who have been faithfully bearish on bitcoin as its price rose from $0 to more than $100,000 over its 16-year lifespan.
Over the years, the Financial Times has surely stood above all traditional publications in its steadfast opposition to bitcoin and crypto. The London paper’s team of truly talented writers has seemingly never wavered from a firm no-coiner stance, and this week was their moment.
“Bitcoin is still about $69,000 too high,” was the headline of a Sunday essay by the FT’s Jemima Kelly that wonderfully summed up Kelly’s and the FT’s general stance over the last decade-plus. [The FT subsequently changed the headline to “$70,000 too high” after bitcoin rose overnight].
“Ever since its creation, bitcoin has been on a journey that will end, splattered on the ground,” Kelly wrote. “This week has shown us that the supply of ‘greater fools’ that bitcoin relies on is drying up,” she continued. “The fairy tales that have been keeping crypto afloat are turning out to be just that. People are beginning to wake up to the fact that there is no floor in the value of something based on nothing more than thin air.”
Earlier in the week, with the price of bitcoin declining below the $76,000 average cost basis of BTC treasury giant Strategy (MSTR), the FT’s Craig Coben published, “Strategy’s long road to nowhere.”
With the stock already down about 80% from its record high of late 2024, Coben in February 2026 declared, “Management has no safe choices — only different paths to destroying shareholder value … it is hard to see the case for buying into a vehicle that has merely broken even on its investments over five years.”
“Like a gigantic mastodon stuck in La Brea tar pits,” Coben concluded. “Strategy is flailing for a way out.”
Peter Schiff joins in
With gold — despite a good deal of recent volatility — continuing in a major bull cycle, longtime goldbug and bitcoin critic Peter Schiff was feeling his oats as well.
“According to Michael Saylor, bitcoin is the best-performing asset in the world,” he wrote on Tuesday. “Yet Strategy invested over $54 billion in bitcoin over the past five years, and as of now the company is down about 3% on that investment. I’m sure the losses over the next five years will be much greater!”
“Bitcoin below $76,000, it’s now worth 15 ounces of gold, down 59% from its Nov. 2021 high,” Schiff continued. “Bitcoin is in a long-term bear market priced in gold.”
Other signs
“I refuse to pick bottoms,” once said former hedge fund manager Hugh Hendry. “Monkeys spend all their time picking bottoms.”
As Hendry noted, it’s probably a good idea not to get too cute timing one’s buys to headlines like those seen in the FT this week. It’s probably fairly safe to say, though, that some sort of bottoming process is underway.
In other news this week that would never appear near tops, it appears that investor interest in Tether is evaporating. With the crypto market still perky late last year, it was reported that the stablecoin issuing giant was in talks to raise $15-$20 billion at as much as a $500 billion valuation.
According to a report in the FT on Tuesday, however, investors appear to be pushing back against that valuation, and capital-raising efforts may only be on the order of about $5 billion.
For its part, Tether CEO Paolo Ardoino told the FT that the original reports of a $15-$20 billion capital raise were a “misconception,” and that Tether had received plenty of interest at that $500 billion valuation.
Nevertheless, according to the report, investors have privately raised concerns about that lofty valuation. Things are fluid, the report continued, and a crypto rally could quickly change sentiment.
South Korean cryptocurrency exchange Bithumb announced that it has resolved a weekend incident in which a promotional payout error briefly overcredited certain user accounts with Bitcoin. In a Sunday statement, the firm said it recovered 99.7% of the excess BTC on the same day the issue occurred. The remaining 1,788 BTC that had already been sold was reimbursed using company funds to ensure customer balances remained fully matched. Bithumb asserted that its holdings of all virtual assets were 100% equivalent to or exceeding user deposits, reinforcing the premise that customer liabilities were adequately backed. The exchange noted that most of the excess was retrieved directly from individual accounts, while the portion already liquidated in the market was funded by corporate reserves to restore balance sheets and maintain trust. The incident was not the result of a hack, and deposits and withdrawals continued normally during the disruption.
Key takeaways
- 99.7% of the overpaid BTC was recovered on the same day the incident happened, with 1,788 BTC already sold and reimbursed from corporate funds.
- Bithumb stated its total asset holdings were sufficient to cover all user deposits, underscoring balance-sheet integrity even in a disruption.
- Compensation includes 20,000 won per user for those who were connected during the incident, plus full reimbursement plus 10% for traders who sold at unfavorable prices during the event.
- A seven-day, platform-wide trading-fee waiver was announced to cushion the disruption’s impact on active traders.
- The incident originated from a promotional payout error rather than a security breach, and normal trading activity quickly stabilized after account restrictions were put in place.
- Industry context highlights ongoing operational challenges for centralized exchanges, with broader coverage of interoperability and risk controls as regulators scrutinize platform reliability.
Tickers mentioned: $BTC
Sentiment: Neutral
Price impact: Neutral. While there was intraday volatility during the incident, the exchange disclosed no lasting price impact beyond a temporary spike caused by liquidations and subsequent remediation measures.
Market context: The episode arrives amid a period of heightened attention on how centralized exchanges manage incidents, with observers watching how firms reconcile user balances, communicate clearly, and maintain liquidity during promotional events or high-volume trading days. The broader crypto market has seen sporadic operational hiccups across multiple platforms, reinforcing the importance of robust controls and transparent remediation steps in sustaining market confidence.
Why it matters
For users on Bithumb, the episode tested confidence in the exchange’s risk management and accounting practices. By recovering the majority of overpaid BTC on the same day and funding reimbursements from reserves for the rest, Bithumb signaled a commitment to preserving customer asset integrity even when promos and systems interact in unintended ways. The adherence to the principle that customer deposits should equal or exceed liabilities is a critical touchstone for users who rely on centralized venues for liquidity, staking, and spot trading.
The compensation scheme further matters because it attempts to reduce the financial friction faced by traders during a disruption. The per-user credit, full reimbursement of affected sale values, and an additional 10% payout for traders who sold at unfavorable prices collectively aim to restore trading activity while dampening reputational damage. The seven-day trading-fee waiver is a tangible incentive to keep volume steady and discourage a mass exodus from the platform during remediation.
From a market-structure perspective, the incident underscores a recurring theme in centralized exchanges: even without a cybersecurity breach, operational mishaps tied to promotions can trigger a cascade of effects, including price volatility and liquidity concerns. Observers will be watching how Bithumb and other platforms strengthen validation and post-event reconciliation processes to minimize recurrence. The episode also feeds into a broader discourse about the resilience of crypto ecosystems, especially as regulators demand greater clarity around risk controls, customer protections, and the speed at which firms can restore normal service after anomalous events.
What to watch next
- Clarification on the total amount of BTC credited in error and a detailed post-incident accounting breakdown by Bithumb.
- Any follow-up audits or third-party reviews assessing the effectiveness of the compensation program and the firm’s reserve adequacy.
- Regulatory or legislative responses in South Korea related to incident reporting, consumer protections, and exchange risk management.
- Announcements outlining changes to promotional payout workflows to prevent recurrence and improve real-time error detection.
Sources & verification
- Bithumb official notice: https://feed.bithumb.com/notice/1651928
- Cointelegraph: Bithumb confirms reward payout error after abnormal Bitcoin trades — https://cointelegraph.com/news/bithumb-confirms-reward-payout-error-after-abnormal-bitcoin-trades
- Cointelegraph: Bithumb flags $200M in dormant crypto assets across 2.6M inactive accounts — https://cointelegraph.com/news/bithumb-dormant-crypto-assets-200m-inactive-accounts
- Cointelegraph: Coinbase cuts unnecessary account restrictions — https://cointelegraph.com/news/coinbase-cuts-unnecessary-account-restrictions
- Cointelegraph: Binance 400m program traders hit Friday downturn — https://cointelegraph.com/news/binance-400m-program-traders-hit-friday-downturn
Resolution and compensation measures after an over-credit incident
The weekend episode centered on Bitcoin (CRYPTO: BTC), the most liquid asset in crypto markets, and tested Bithumb’s operational safeguards. After a Friday system fault during a promotional payout briefly overcredited some users, the exchange acted quickly to contain the fallout. In its Sunday update, Bithumb said it recovered 99.7% of the overpaid BTC on the same day and covered the remaining 1,788 BTC that had already left the market using corporate reserves to ensure customer balances remained fully matched. The firm added that its overall holdings of virtual assets were 100% equivalent to or exceeding user deposits, reinforcing a basic but critical premise for users: asset reserves should cover outstanding liabilities, even in disruptive events.
Most of the recovery came directly from the affected accounts as managers worked to claw back the erroneous transfers. Where balances had already been liquidated, reimbursements would come from reserve funds rather than customer funds, underscoring a commitment to limit customer losses. Importantly, Bithumb stressed that the incident was not the result of a security breach and that normal deposit and withdrawal operations continued uninterrupted during the episode. While there was widespread chatter about the total amount involved, the exchange did not disclose a final figure, though some users asserted that up to around 2,000 BTC were credited in error. The company’s messaging sought to reassure customers that the issue did not compromise the integrity of institutional or retail accounts.
As part of its response, Bithumb outlined a compensation plan aimed at restoring trust among users who were on the platform when the error occurred. Those who were connected to the service during the incident received 20,000 won (about $15) per user, a modest gesture intended to acknowledge the disruption. Traders who executed sales during the anomaly and sold at unfavorable prices will be fully reimbursed for the sale value, plus an additional 10% payout as a further remedy. Additionally, Bithumb announced a seven-day period in which trading fees would be waived across all markets, a move designed to reduce the cost of the disruption for active traders and to encourage continued participation on the platform. The plan reflects a broader approach to incident response that blends restitution with policy incentives to sustain activity during periods of system turbulence.
The Friday-late-week event was triggered by a routine promotional payout that unexpectedly inflated user balances, prompting a surge of selling activity once recipients began liquidating. The exchange moved to restrict affected accounts within minutes and stabilized trading quickly, limiting potential digit-asset liquidations for other participants. In its update, Bithumb noted that there was no connection to hacking or external exploitation and that the incident did not derail deposits or withdrawals. The absence of a security breach is a critical distinction that helps maintain confidence in the platform, even as customers digest the temporary disruption and the compensatory measures that follow.
Beyond the immediate incident, the episode feeds into a broader conversation about the reliability of centralized exchanges—the kind of institutions that handle the largest pools of liquidity in many markets. The ripple effects have already surfaced in parallel industry coverage, where other platforms have faced operational problems during crowded trading conditions, underscoring the importance of resilient infrastructure, robust reconciliation processes, and clear customer compensation policies. As users scrutinize exchange responses to promotional errors and other anomalies, regulators in several jurisdictions are paying closer attention to how firms manage risk, communicate incidents, and safeguard user assets.
Traders are now starting to look beyond single-chain markets, using more flexible on-chain derivatives products. With increasing speed in the Solana ecosystem, there is a growing need for perpetual futures products that can efficiently track price movements without compromising on non-custodial, transparent, and on-chain qualities.
These developments are taking place alongside other shifts in DeFi trading dynamics, where traders are now looking for leverage but are also requiring capital efficiency, reliability, and risk parameters.
Platforms such as HFDX are benefiting from this evolution by offering on-chain perpetual futures and structured liquidity strategies designed for cross-chain participation rather than siloed liquidity.
SOL Ecosystem Growth Fuels Spike In Cross-Chain Perp Trading On HFDX
Solana is currently trading at $92.25, down 4.82% in the last 24 hours, but trading volumes are still high. With a market cap of $52.32 billion and daily trading volumes of $8.13 billion, up over 32%, it is clear that engagement is increasing, not decreasing.
For traders, the current state of the market is conducive to derivatives trading as opposed to spot trading.
Cross-chain perps enable traders to engage, hedge, and short without leaving their ecosystems. As Solana liquidity within its ecosystem continues to increase, traders are increasingly turning to cross-chain perps for risk management and efficient leverage utilization.
This is a reality of the market that traders must understand. Liquidity does not remain on one chain, nor does demand for derivatives.
How Cross-Chain Demand Is Reshaping Perp Markets
Traders are showing a clear preference for platforms that can aggregate liquidity across ecosystems. Cross-chain perp trading allows participants to express views on assets like SOL while accessing deeper, more stable liquidity pools.
This matters during volatile conditions. When activity spikes on one chain, isolated markets can experience slippage and funding instability. Cross-chain models help smooth these effects by distributing risk and liquidity more efficiently.
For advanced traders, this also unlocks new strategies. Basis trading, hedging correlated assets, and managing multi-chain portfolios all benefit from unified, on-chain perpetual infrastructure.
HFDX Positioned For Cross-Chain Perp Growth
HFDX is designed with this exact purpose in mind. It’s a non-custodial perpetual futures protocol that allows users to trade major digital assets with leverage while keeping their funds fully on-chain. Trades occur through shared liquidity pools instead of traditional order books.
Execution is an important aspect. HFDX has executed over 500,000 trades with execution speeds of less than 2 milliseconds. For traders looking to participate in cross-chain perps, execution speed is critical during periods of volatility.
Additionally, HFDX has integrated advanced charting with TradingView. Users can view real-time price information, technical indicators, macroeconomic information, and broader market information. This combination supports informed decision-making across chains.
Alongside trading, HFDX offers Liquidity Loan Note (LLN) strategies. These allow capital to be allocated to protocol liquidity for fixed terms, with returns generated from actual trading and borrowing fees.
Why HFDX Stands Out In Cross-Chain Perp Trading
- Non-custodial, on-chain perpetual futures architecture
- Cross-chain-friendly liquidity model designed for scale
- Ultra-fast execution for volatile market conditions
- Transparent oracle-based pricing and automated risk controls
- Structured liquidity strategies backed by real protocol revenue
- Professional-grade analytics and trading tools
These features support consistent performance as cross-chain leverage demand grows.
Cross-Chain Perps And HFDX’s Early Positioning
As DeFi matures, traders are seeking leverage, but they also want flexibility, transparency, and infrastructure that works across ecosystems.
HFDX sits at the center of this shift. By combining on-chain perpetual futures, structured liquidity models, and execution built for scale, the protocol is positioning itself as a long-term derivatives infrastructure rather than speculative tooling. While all participation involves risk, HFDX offers a framework designed for disciplined trading in a multi-chain world.
For traders and liquidity participants looking to engage early with cross-chain perpetual markets, HFDX represents an opportunity to explore as on-chain derivatives adoption continues to accelerate.
Make Your Money Work Smarter And Unlock A Wealth Of Opportunities With HFDX Today!
Website: https://hfdx.xyz/
Telegram: https://t.me/HFDXTrading
Disclaimer: This is a Press Release provided by a third party who is responsible for the content. Please conduct your own research before taking any action based on the content.
Crypto World
Bitcoin has performed worse than a bet tracking the chance of Jesus Christ returning this year
Traders on prediction market Polymarket have doubled the implied odds of the Second Coming of Jesus Christ occurring by year-end, turning one of the platform’s stranger contracts into a better performer than bitcoin.
The market, titled “Will Jesus return in 2026,” traded around 4 cents on Friday, implying a roughly 4% chance. That’s up from a low of about 1.8% on Jan. 3, meaning the “Yes” side has gained more than 120% in just over a month.
Bitcoin, in contrast, has been moving in the opposite direction. The largest cryptocurrency has lost 18% this year for reasons ranging from concerns that quantum computing could break its encryption to speculation about a hedge fund blow-up and broader risk-off pressure across global markets.
Such price action has left even meme-like prediction contracts looking resilient by comparison.
Polymarket markets work like binary options. A “Yes” share pays out $1 if the event happens and $0 if it doesn’t, with the trading price reflecting the crowd’s implied probability.
A trader who buys “Yes” at 4 cents is effectively paying that amount for a shot at $1. Someone buying “No” at 96 cents is betting the event will not happen and stands to earn 4 cents if the contract resolves “No.”
If “No” trades in the mid-to-high 90s for long stretches, it creates the appearance of a slow, steady gain for anyone willing to park money there, even though the trade is ultimately binary and can still swing sharply.
The contract resolves to “Yes” if the Second Coming occurs by Dec. 31, 2026 at 11:59 p.m. ET, and to “No” otherwise. Polymarket says the resolution will be based on a consensus of credible sources, a clause that highlights why traders treat the market more as a novelty than a serious forecast.
The price action offers a snapshot of how prediction markets can behave like microcap tokens. With relatively limited liquidity, even small bursts of buying can push probabilities sharply higher, creating headline-grabbing percentage gains.
The rally also reflects Polymarket’s growing role as a real-time barometer for internet attention, where everything from elections to celebrity gossip to religious prophecies can be traded in the same interface.
As such, the “Jesus trade” remains a tiny sideshow. But in a year where bitcoin has struggled to find a stable footing, it’s also a reminder that the weirdest corners of crypto are sometimes the only ones going up.
Crypto Google Searches Plummet to 1-Year Lows Amid Market Crash
I Waited On Catherine O’Hara And It Changed My Life
Atalanta vs Cremonese Prediction and Betting Tips
-
Video6 days agoWhen Money Enters #motivation #mindset #selfimprovement
-
Tech4 days agoWikipedia volunteers spent years cataloging AI tells. Now there’s a plugin to avoid them.
-
Politics7 days agoSky News Presenter Criticises Lord Mandelson As Greedy And Duplicitous
-
Sports2 days agoJD Vance booed as Team USA enters Winter Olympics opening ceremony
-
Tech2 days agoFirst multi-coronavirus vaccine enters human testing, built on UW Medicine technology
-
Politics1 hour agoWhy Israel is blocking foreign journalists from entering
-
NewsBeat5 days agoUS-brokered Russia-Ukraine talks are resuming this week
-
Politics3 hours agoThe Health Dangers Of Browning Your Food
-
Sports1 day ago
Former Viking Enters Hall of Fame
-
Crypto World6 days agoMarket Analysis: GBP/USD Retreats From Highs As EUR/GBP Enters Holding Pattern
-
Sports2 days ago
New and Huge Defender Enter Vikings’ Mock Draft Orbit
-
Business8 hours agoJulius Baer CEO calls for Swiss public register of rogue bankers to protect reputation
-
NewsBeat2 days agoSavannah Guthrie’s mother’s blood was found on porch of home, police confirm as search enters sixth day: Live
-
Business3 days agoQuiz enters administration for third time
-
Sports6 days agoShannon Birchard enters Canadian curling history with sixth Scotties title
-
NewsBeat6 days agoGAME to close all standalone stores in the UK after it enters administration
-
NewsBeat3 days agoStill time to enter Bolton News’ Best Hairdresser 2026 competition
-
NewsBeat2 days agoDriving instructor urges all learners to do 1 check before entering roundabout
-
Crypto World5 days agoRussia’s Largest Bitcoin Miner BitRiver Enters Bankruptcy Proceedings: Report
-
NewsBeat6 days agoImages of Mamdani with Epstein are AI-generated. Here’s how we know