At 57,600, Bitcoin is down just 0.71% from the same time last week, continuing Bitcoin’s sideways movement within the range. Bitcoin continued to fall at the Wall Street open on September 11 as positive U.S. macroeconomic data failed to energize the market.
Source: Brave New Coin Liquid Index
Bitcoin briefly dipped below $56,000 but has since recovered, despite the release of the August Consumer Price Index (CPI) report, which showed inflation slowing as expected. According to data from the U.S. Bureau of Labor Statistics, the CPI increased 0.2% month-on-month and 2.5% year-on-year. “The all-item index increased 2.5% for the 12 months ending in August, the smallest 12-month increase since February 2021,” the BLS said in a press release.
Traders are waiting for confirmation
CME Group's FedWatch tool indicates market sentiment is leaning toward a small 0.25% rate cut at the Federal Reserve's Sept. 18 meeting, with the probability of that happening rising to 85% from 66% the previous day.
Bitcoin traders are remaining cautious despite the possibility of the first U.S. interest rate cut since 2020. After months of sideways movement, traders are waiting for confirmation of a rate cut rather than getting into a bind by pre-empting something that may not happen.
This risk-averse environment was confirmed by CryptoQuant’s weekly report showing that Bitcoin was decoupling from gold, signaling a change in market behavior. In August, gold (XAU/USD) hit a new all-time high in dollar terms, while Bitcoin’s price fell, leading to a negative correlation between the two assets.
“Bitcoin has decoupled from gold. As gold hit new record highs, the price of Bitcoin has fallen and the correlation has turned negative,” CryptoQuant explained.
Periods of negative correlation between Bitcoin and gold typically indicate a “risk-averse environment” where investors favor traditional safe haven assets like gold, resulting in Bitcoin mirroring the broader stock market decline.
CryptoQuant writes that its bull/bear market indicator points to bear market conditions.
Source: CryptoQuant
As expected, cryptocurrencies are not included in the discussion
US presidential candidates Kamala Harris and Donald Trump debated over a wide range of issues from abortion rights to the Ukraine war, but cryptocurrency did not feature in Tuesday's debate. Although cryptocurrency was not directly mentioned, it remains a key issue in this election cycle. According to consumer advocacy group Public Citizen, crypto-related companies have already spent $119 million in 2024, most of it going to super PACs such as Fair Shake PAC. Trump is seen as friendly to cryptocurrencies and has vowed to end the crackdown on the industry he calls “illegal and un-American.” Trump's pick for vice president, JD Vance, also supports cryptocurrencies, and Trump has promised to defend bitcoin miners. Several key figures in the crypto world have supported Trump, including Gemini co-founders Tyler and Cameron Winklevoss, who donated $2 million in Bitcoin to Trump's campaign. In contrast, Harris supporters held town hall meetings and planned further fundraising events under the “Crypto4Harris” banner.
North Korea targets ETFs
Federal investigators say North Korean scammers and hackers are targeting companies involved in cryptocurrency exchange-traded funds (ETFs), and while billions of dollars are invested in these funds, investors may be fooled into thinking their assets are completely safe.
North Korean hacking groups like the Lazarus Group are well known in the cryptocurrency industry and are suspected of carrying out numerous hacks against prominent exchanges and blockchain protocols, raising concerns that they could target the underlying assets of crypto-backed ETFs.
While stock market ETFs require robust systems to accurately track and replicate the underlying asset prices, fund managers of spot cryptocurrency ETFs must hold physical digital assets commensurate with their total assets under management (AUM), either themselves or through a third party. These massive holdings make them attractive targets for hackers.
Source: FBI
Moreover, while investors are pouring billions of dollars into cryptocurrency ETFs, most of these funds are uninsured. If North Korean hackers were to succeed in compromising the underlying assets, the consequences could be dire.
Coinbase Global, which holds the majority of the ETF's holdings, has a multi-layered, highly secure infrastructure that hackers would need to penetrate before they could do significant damage. According to the prospectus for BlackRock's iShares Bitcoin Trust ETF, Coinbase Global, the fund's custodian, is offering insurance policies for up to $320 million. While this may seem like a lot, Coinbase reports that it stores $269 billion in digital assets, meaning the insurance policy only covers about 0.12% of its AUM.
New UK bill declares crypto assets private property
The UK has introduced new legislation aimed at determining whether Bitcoin and other cryptocurrencies can be classified as “personal property” under local law. In a Sept. 11 notice, the UK government announced that the proposed Property Bill would address the legal status of non-fungible tokens (NFTs), cryptocurrencies, and carbon credits. The bill seeks to create an additional category of property under UK law and recognize digital assets as “things.”
“It is essential that the law keeps pace with evolving technology and this legislation will enable the sector to maintain its position as a global leader in crypto assets whilst bringing clarity to complex property litigation,” said Heidi Alexander, Labour MP and Minister of State for Finance.
The government said the new law would provide legal protection for individuals and businesses against fraud and deception, and assist judges in resolving disputes involving digital assets, such as divorce settlements.
The legislation stems from a 2023 report commissioned by the UK Ministry of Justice which concluded that “although some digital assets are not property or activities, they can be treated as personal property under the law of England and Wales.”
The bill is one of the Labor government's first efforts to address digital assets and blockchain regulation since taking power in the July 4 election, but experts say further action on the bill may be delayed due to the parliamentary recess and upcoming party conference season.
Indodax exchange hacked
A major security breach has occurred at Indonesian cryptocurrency exchange Indodax, resulting in the loss of approximately $22 million in various cryptocurrencies.
In response, the exchange disabled its mobile and web applications to investigate the attack. On September 11, blockchain security companies including PeckShield, Cybers and SlowMist reported an attack on Indodax’s hot wallet. Hackers stole a significant amount of Bitcoin and other digital assets.
Source: Indodax
According to SlowMist's research, a vulnerability in Indodax's withdrawal system allowed attackers to withdraw funds from hot wallets, while Cyvers suggested the breach may also have involved attacks on systems such as signing machines.
The stolen assets include over $1.42 million in Bitcoin, $2.4 million in Tron's TRX, $14.6 million in various ERC-20 tokens, $2.58 million in POL, and $900,000 in Optimism Blockchain's ETH. Cyvers detected over 150 suspicious transactions across multiple networks and noted that the hackers began converting the stolen tokens into Ether. Typically, hackers convert the funds into ETH and then anonymize them using services such as Tornado Cash.
Indodax responded by temporarily suspending operations to conduct a thorough investigation. In a statement, the exchange reassured users:
“We are currently carrying out full system maintenance to ensure everything runs smoothly. During this period, the INDODAX web platform and applications will be temporarily unavailable.”
Indodax assured clients that their assets were safe despite the breach.
