The cryptocurrency world witnessed contrasting developments this week. While Bitcoin transaction values reached new yearly highs, regulatory tensions continued to shape the landscape.
Sam Bankman-Fried’s transfer back to a New York prison added another layer to the FTX saga, even as the exchange reached a $200 million settlement with the IRS.
Meanwhile, the GameStop rally reignited allegations of market manipulation, further fueling the ongoing battle between retail investors and short sellers.
Bitcoin Transaction Value Hits Yearly High with $25B Moved
Bitcoin holders moved a staggering 367,000 BTC on May 28, worth over $25 billion, recording the highest value of Bitcoin transactions in the past year, according to data from Bitcoin explorer Blockchain.com.
Yearly High for Bitcoin Transaction Value
Bitcoin’s on-chain transaction value refers to the total estimated value of transactions on the blockchain, a metric that helps traders understand trends and make informed trading decisions.
The 367,000 BTC moved on May 28 marks the largest number of BTC transferred since June 13, 2022, when over 519,000 BTC were moved, worth around $14 billion at the time, as per Blockchain.com.
Significant Transaction Value Despite Lower BTC Transfers
While the number of Bitcoin moved on May 28 was significantly lower than the previous yearly high, the higher price of BTC at around $69,374 resulted in the total transaction value reaching approximately $25.5 billion, a new yearly record.
Transaction Count and Trading Volume
Despite the transaction value reaching a yearly high, the number of transactions remained relatively normal at 596,790 on May 28, according to Bitcoin transaction tracker YCharts. This figure appeared average compared to the preceding and following days.
Additionally, Bitcoin’s trading volume on May 28 did not display anything out of the ordinary, with Blockchain.com showing around $200 million in volume for Bitcoin transactions on crypto exchanges.
Bullish Predictions for Bitcoin’s Future
Meanwhile, trading analyst Peter Brandt forecasted that Bitcoin could reach $130,000 by 2025, based on similar patterns observed in previous post-halving cycles. Brandt stated that Bitcoin’s bull run shows patterns akin to earlier cycles, suggesting the asset could reach about $130,000 to $150,000 by August or September 2025 if it follows the same trajectory.
According to the crypto trader, historically, Bitcoin’s halving date has been approximately in the middle of bull markets’ beginnings and peak periods. He noted that the last bull market started 16 months before the 2020 halving and ended 18 months after that event, as reported by cryptocurrency news outlet CoinDesk.
As Bitcoin’s transaction value reaches new highs and analysts remain bullish, the cryptocurrency market eagerly awaits the potential continuation of the current uptrend, fueled by increased adoption and institutional interest.
SBF Back in NYC Prison for Appeal After Oklahoma Stint
Sam Bankman-Fried, the former FTX CEO, is back at the Metropolitan Detention Center (MDC) in Brooklyn, New York, as of June 4. This move comes after spending roughly a week at the Federal Transfer Center in Oklahoma City, where many speculated authorities planned to send him to a California prison near his parents’ home.
Conviction and Sentencing
In November 2023, a jury convicted Bankman-Fried of seven felony counts related to the misuse of customer funds at FTX and Alameda Research. Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York, who oversaw SBF’s criminal trial, sentenced him to 25 years in prison in March 2024.
Bankman-Fried’s legal team filed a notice to appeal on April 11, though no filings have appeared on the court docket yet suggesting the grounds for the appeal.
Legal Proceedings and Recommendations
It’s unclear what led to SBF’s return to New York, as his lawyers had requested he remain at MDC Brooklyn to assist in his appeal. Judge Kaplan had also recommended that Bankman-Fried stay in the state.
Bankman-Fried was one of the only individuals tied to the FTX collapse to plead not guilty and face a jury trial. Other former executives like Caroline Ellison, Gary Wang, and Nishad Singh have pleaded guilty and await sentencing.
Other Cases and Consequences
On May 28, Judge Kaplan sentenced Ryan Salame, former co-CEO of FTX Digital Markets in the Bahamas, to 90 months (7.5 years) in prison. Former Binance CEO Changpeng Zhao reported to a California prison in April after a four-month sentence for violating U.S. money laundering laws.
Alex Mashinsky, the former CEO of Celsius Network, will be the next prominent crypto figure to face criminal charges, with his trial set for January 2025 following Bankman-Fried’s and Zhao’s cases.
Roaring Kitty’s $300M GME Position Sparks Market Manipulation Claims
The GameStop (GME) stock position of Keith Gill, known as “Roaring Kitty,” is facing allegations of market manipulation from Citron Research, one of the most prominent GameStop short sellers.
In a June 3 X post, Citron Research stated:
Now, with $GME, he posts with a large account and a significant near-term option position, appearing more like manipulation without a solid thesis. Considering the stock is now 2,000% higher than his initial video almost four years ago.
Gill’s Massive GME Position
The allegations came shortly after Gill shared that he is up over $300 million on his GME position, potentially making him the first GameStop billionaire by the end of the week if prices continue to rise.
Gill’s screenshot revealed he purchased five million GME shares for $115.7 million and put $65.7 million into call options, betting that GME would be at least $20 a share on June 21.
Suspicions of Backing by Larger Entity
Citron Research also alleged that Gill’s GME position may be financially backed by a larger entity, according to the post:
We believe someone is backing Gill — there’s no way he made this size trade alone. His reported finances don’t support this trade. Investors will see through this roaring Icarus.
Citron Research’s Short Position and History
According to the Kobeissi Letter, Citron Research was the latest large firm to announce its short GME position in a June 3 X post. The post stated:
Citron Research was the latest short seller to announce a short position. On May 16th, Citron announced that they are short $GME again. In 2021, Citron lost over $100 million shorting $GME.
In January 2021, Citron Research was forced to close out its short GME positions at a 100% loss due to the retail buying frenzy kickstarted by Gill.
Backlash from Retail Investors
Citron’s social post has created widespread backlash among retail investors, who took issue with the short seller’s manipulation allegations. Pseudonymous GME investor Fitzzzy wrote:
For someone who is short GME you don’t pay much attention to your investment. DFV [Keith Gill] was buying ITM calls in late April and early May $100k at a time. Those same trades were worth over $10 million each on May 13th and 14th.
Another user, Comedyorwat, commented:
You know what’s funny? We had the very same questions about your short positions, in which they were reported at over 240% before the sneeze…
Financial researcher Wolf of My Street also referenced the 2021 incident when federal agents investigated Citron Research founder Andrew Left’s home due to alleged wrongdoing by the short-seller.
As the GME saga continues, the clash between retail investors and short sellers intensifies, with allegations of market manipulation fueling the ongoing battle.
FTX Reaches $200M Settlement with IRS on Tax Bill
FTX has reached a $200 million settlement with the Internal Revenue Service (IRS) to resolve a major tax dispute, according to a June 3 filing. The agreement, which is subject to court approval, represents a significant step forward for the FTX bankruptcy process.
Initial Tax Claims and Reduction
Initially, the IRS claimed that FTX owed more than $44 billion in taxes. However, this amount was later reduced, culminating in a $24 billion tax dispute. Under the proposed settlement, the IRS would agree to resolve its $24 billion claim.
Settlement Terms
If the court approves FTX’s reorganization plan, the settlement terms include:
– FTX will pay $200 million as a priority tax claim within 60 days of the plan’s approval.
– The IRS will collect an additional $685 million as a subordinated claim, which will be paid after customers and other creditors.
– The deal covers all tax claims until October 31, 2022.
FTX’s Arguments and Disagreements
While FTX does not deny owing taxes, the exchange disagrees with the amount and specific reasons for the tax liability. Specifically, FTX argues that it should not be taxed on funds misappropriated by its former CEO, Sam Bankman-Fried, and disputes the IRS’ calculations for employment taxes related to salaries paid to Bankman-Fried and other executives.
Furthermore, the exchange asserts that it has valid deductions and losses that the IRS is wrongly disallowing due to a lack of proper documentation.
IRS’s Position and Litigation Risk
The IRS disagreed with FTX’s arguments and was prepared to fight the exchange in court for a significant tax payment, as stated in the filing:
The IRS does not agree with the Debtors’ arguments and has informed the Debtors that absent a settlement it would pursue these and other theories to impose significant tax liability.
FTX believes the settlement reduces litigation risk and increases certainty regarding creditor and customer recovery.
Repayment Plan and Creditor Recovery
On May 8, FTX proposed a new plan to repay creditors, aiming to fully reimburse all claims plus additional compensation. Only creditors holding claims below $50,000 will be eligible for a 118% recovery, which FTX anticipated would cover “98% of the creditors of FTX by number.” Repayments will be based on the value of assets at the time of FTX’s collapse in November 2022.
With the IRS settlement in place, FTX moves closer to resolving a major hurdle in its bankruptcy process and potentially paving the way for creditor recovery.
Closing Remark
As the cryptocurrency industry navigates uncharted territory, unprecedented transaction volumes and high-profile legal battles underscore the sector’s resilience and potential for disruption.
However, the road ahead is paved with regulatory hurdles and ongoing scrutiny, testing the industry’s ability to foster innovation while maintaining compliance. These pivotal events will undoubtedly shape the trajectory of this burgeoning financial ecosystem.
What are your thoughts on this week’s crypto news? Did any particular development stand out to you? Leave a comment below and let us know your perspective!
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FAQs
What happens if you invest $100 in Bitcoin today?
If you invest $100 in Bitcoin today, the outcome will depend on Bitcoin’s future price movements. If Bitcoin’s price increases, your investment could grow in value, potentially yielding significant returns.
However, if the price drops, you could lose some or all of your investment. Bitcoin is highly volatile, so it’s essential to consider the risks and be prepared for fluctuations in value.
Who became rich because of Bitcoin?
Several people have become very wealthy because of Bitcoin, including early adopters like the Winklevoss twins, who invested heavily in Bitcoin and became billionaires.
Other notable figures include Bitcoin’s pseudonymous creator, Satoshi Nakamoto, who is believed to own around 1 million Bitcoins, and early investors like Roger Ver and Barry Silbert, who have also amassed significant wealth through Bitcoin investments.
What is the biggest drop in Bitcoin history?
The biggest drop in Bitcoin’s history occurred during the 2017-2018 bear market, when Bitcoin’s price fell from an all-time high of around $19,700 in December 2017 to approximately $3,200 in December 2018.
This represented an 84% decline, one of the most significant and prolonged downturns in Bitcoin’s history. The drop highlighted the extreme volatility of cryptocurrency markets.
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This week’s roundup was packed with significant events! The Bitcoin transaction value reaching a yearly high is quite impressive, especially considering the lower number of BTC transferred. It’s a testament to the growing institutional interest and market confidence in Bitcoin. Sam Bankman-Fried’s legal saga continues to be a focal point, and his return to a NYC prison adds more drama to the FTX story. The GameStop situation is another rollercoaster, with Roaring Kitty’s massive position sparking more debates on market manipulation. Lastly, the FTX settlement with the IRS seems like a crucial step in resolving their bankruptcy issues. Overall, it’s fascinating to see how these developments shape the crypto landscape. What stood out most to everyone else?
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Bitcoin’s transaction value hitting a yearly high is impressive, highlighting the growing confidence in the crypto space. This trend underscores the potential for continued growth and innovation in the industry. On another note, for those looking to streamline their crypto transactions, Zypto Pay offers an excellent solution. With its ability to handle borderless blockchain payments, Zypto Pay makes accepting crypto from customers worldwide hassle-free. Plus, using virtual crypto cards may remove most of th usual cross-border bottlenecks.
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The volume of Bitcoin transactions is breathtaking. The amount of stored wealth being transferred daily is a testament to the efficiency and revolutionary nature of blockchain technology!
More Gamestop drama. I recently watch Eat the Rich on Netflix and theres quite alot I didn’t know about. It’s a crazy story.