Crypto
Cryptocurrency Market News: Reddit's Crypto Stash, Bitcoin Tops $53,000
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Key Takeaways
- Bitcoin reclaimed $53,000 after more than two years Monday.
- Reddit revealed it owns bitcoin and ether in regulatory filings ahead of its initial public offering.
- Former U.S. President Donald Trump seemingly softened his stance on cryptocurrencies.
- The Federal Reserve released an analysis of the U.S. dollar-denominated stablecoin market.
- The U.S. Department of Energy has temporarily suspended an energy consumption survey of bitcoin miners after a lawsuit.
What Happened in Crypto Markets Last Week?
Bitcoin (BTC) started the week on a strong note, rising 3% Monday afternoon to top $53,000, its highest level since December 2021. Reddit’s disclosure of its cryptocurrency holdings, and former President Donald Trump’s seemingly softer stance on bitcoin last week may have added to the price momentum for the largest cryptocurrency.
Reddit’s Cryptocurrency Stash
As it gears up for an initial public offering (IPO), social media platform Reddit unveiled its ownership of bitcoin and ether (ETH) in a filing with the U.S. Securities and Exchange Commission last week. That adds to the list of mainstream companies such as MicroStrategy (MSTR) and Tesla (TSLA) that own bitcoin.
But that’s not all of Reddit’s crypto exposure. The company also has some of Polygon’s Matic (MATIC) for use in specific virtual goods transactions. Although the exact number of tokens remains undisclosed, Reddit clarified in the filing that the net value of these digital assets is considered “immaterial.” This strategic move underscores Reddit’s longtime engagement with cryptocurrencies and blockchain technology, which began as far back as 2014.
Trump Softens Bitcoin Stance
Former President and Republican candidate Donald Trump seemingly softened his stance toward cryptocurrency last week. In a recent interview on Fox News, Trump admitted that bitcoin has gained popularity, while still expressing his preference for the U.S. dollar.
This seems a bit of a walkback from the hardline anti-crypto stance he posted on Twitter (now X) in 2019.
USDC Dumps Tron
Stablecoin issuer Circle will cease to support its USD Coin (USDC) stablecoin on the Tron blockchain network, citing alignment with its commitment to maintaining the trustworthiness, transparency, and security of USDC.
Fed’s New Report On Stablecoins
On Friday, the Federal Reserve released a report on stablecoins, which was particularly focused on how the market operates during times of stress. Notably, the report found that, despite their assumed similarities, the USDC and Tether (USDT) stablecoins operate as their own distinctive markets.
“Even stablecoins that might appear to operate similarly on paper—fiat-backed stablecoins like USDT and USDC, for example—are distributed through primary markets with distinct characteristics in terms of frequency, number of participants, and response to external shocks,” the report said.
The report, which also covered BUSD and DAI, indicated further study of the stablecoin market is necessary, as these assets maintain a pivotal role in decentralized finance (DeFi).
Bitcoin Miners Get Energy Department To Pause Survey
The U.S. Department of Energy (DOE) has agreed to temporarily suspend its emergency survey on energy consumption by cryptocurrency miners after a lawsuit by bitcoin miner Riot Platforms (RIOT) and the Texas Blockchain Council.
The DOE’s statistical branch—the U.S. Energy Information Administration (EIA)—has paused its mandatory survey for a month and will safeguard the data already collected since Feb. 5. The lawsuit is aimed at halting the survey, citing potential harm to businesses from disclosing sensitive information.
What To Expect From Crypto Markets This Week
So far this week, its been a mixed bag. While bitcoin continued its onward march, there are some pockets of not-so-great news.
Cryptocurrency exchange BitForex has plunged into darkness amid reports of a $57 million outflow. According to reports, customers are currently unable to access the exchange as withdrawals ceased processing. The abrupt disappearance of the exchange’s online presence follows the departure of former CEO Jason Luo in January. Previously, the exchange faced allegations of faking trading volume and regulatory scrutiny for operating without a license in Japan.
Analysts will also be tracking spot bitcoin exchange-traded fund (ETF) inflows this week, as a drop in activity last week coincided with a stalling of the crypto asset’s recent price rise. Despite the relative drop in activity, last week was the fourth straight week of positive net inflows for digital asset investment products, according to CoinShares.
Do Kwon, the South Korean cryptocurrency entrepreneur behind two digital currencies that lost an estimated $40 billion in 2022, was sentenced on Thursday to 15 years in prison for for what a judge called an “epic fraud.”
U.S. District Judge Paul A. Engelmayer, who handed down the sentence, sharply rebuked Kwon for repeatedly lying to everyday investors who trusted him with their life savings.
“This was a fraud on an epic, generational scale. In the history of federal prosecutions, there are few frauds that have caused as much harm as you have, Mr. Kwon,” Engelmayer said during a hearing in Manhattan federal court.
Kwon, 34, who co-founded Singapore-based Terraform Labs and developed the TerraUSD and Luna currencies, previously pleaded guilty and admitted to misleading investors about a coin that was supposed to maintain a steady price during periods of crypto market volatility.
He is one of several cryptocurrency moguls to face federal charges after a slump in digital token prices in 2022 prompted the collapse of a number of companies.
Dressed in yellow prison garb, Kwon addressed the court and apologized to his victims, including the hundreds who submitted letters to the court describing the harm they had suffered.
“All of their stories were harrowing and reminded me again of the great losses that I’ve caused. I want to tell these victims that I am sorry,” Kwon said.
Ayyildiz Attila, one of the hundreds of victims who submitted letters to the court, said he lost between $400,000 and $500,000 in the collapse.
“My savings, my future, and the results of years of sacrifice disappeared. I struggled to keep up with payments and responsibilities, and everything I had worked forwas erased,” Attila said.
Kwon’s lawyer Sean Hecker said in an email after the sentencing that Kwon spoke from the heart, expressed genuine remorse and will continue his efforts to make amends.
US Attorney Jay Clayton in Manhattan said in a statement following the hearing that Kwon devised elaborate schemes to inflate the value of his cryptocurrencies and fled accountability when his crimes caught up to him.
Prosecutors had asked for a sentence of at least 12 years in prison, saying the crash of Kwon’s Terra cryptocurrency caused billions of dollars in losses and triggered a cascade of crises in the crypto market.
Kwon’s lawyers had asked that he be sentenced to no more than five years so he can return to South Korea to face criminal charges.
Prosecutors charged Kwon in January with nine criminal counts for securities fraud, wire fraud, commodities fraud and money laundering conspiracy.
Kwon was accused of misleading investors in 2021 about TerraUSD, a so-called stablecoin designed to maintain a value of $1. Prosecutors alleged that when TerraUSD slipped below its $1 peg in May 2021, Kwon told investors a computer algorithm known as “Terra Protocol” had restored the coin’s value.
Instead, Kwon arranged for a high-frequency trading firm to secretly buy millions of dollars of the token to artificially prop up its price, according to charging documents.
Kwon pleaded guilty in August to two counts, conspiracy to defraud and wire fraud, and apologized in court for his conduct.
“I made false and misleading statements about why it regained its peg by failing to disclose a trading firm’s role in restoring that peg,” Kwon said at the time. “What I did was wrong.”
Kwon agreed in 2024 to pay $80 million as a civil fine and be banned from crypto transactions as part of a $4.55 billion settlement he and Terraform reached with the Securities and Exchange Commission.
He also faces charges in South Korea. As part of his plea deal, prosecutors will not oppose Kwon’s potential application to be transferred abroad after serving half his US sentence.
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