persistent efforts at regulation

• A number of regulatory initiatives and enforcement actions took place last week, and there have been rumors going around that the U.S. Securities and Exchange Commission (SEC) has been considering Ethereum (ETH) as a security for more than a year.

• Reports revealed that U.S. authorities have opened an inquiry into transactions on Block's Square and Cash App divisions that may have breached compliance laws, in addition to the SEC's probes into specific Ethereum purchases.

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• Furthermore, the FBI filed charges against Idin Dalpour, a citizen of New York, alleging that the person operated a Ponzi scheme that defrauded investors of more than $43 million.

• The trial of the two Binance executives that the police had earlier this year detained on suspicion of money laundering and tax evasion has been postponed by a court in Nigeria. The trial was scheduled to start on May 2, but the court decided to reschedule it until May 17.

FTX executive forfeits mansion, Binance founder receives prison term

• This week, rumors about Binance and FTX surfaced. Changpeng Zhao, the founder and former CEO of Binance, was sentenced to four months in prison for his involvement in Binance's AML regulation breaches. The DoJ's request for a 36-month sentence was denied by the court.

• In the FTX case, Ryan Salame, a former CEO of FTX, consented to a plea agreement that included the authorities' demand that he pay $5.6 million in creditor restitution. To meet this condition, Salame would give up his $5.9 million Bahamas property.

Bitcoin ETFs saw record withdrawals

• Another gloomy week for the market ended this week, with spot Bitcoin ETFs falling as well. On April 29, $51.53 million was pulled out of the 11 Bitcoin ETF products collectively, and BlackRock did not receive any inflows for the fourth day running.

• According to Farside Investors (see below), there was a net influx of fresh cash into the Grayscale Bitcoin Trust (GBTC). Since the launch of the Bitcoin ETF product in January, this was the first daily rise. It added a net of $63 million on Friday, May 3.

• Hong Kong asset managers have set a goal to exceed the $125 million trading volume on the first day of trading that the U.S.-based spot Bitcoin ETFs recorded. But on April 30, the turnover for the Hong Kong-based ETFs was barely $8.6 million, and by May 3, it had decreased to $5.5 million. On April 30, their ETFs are scheduled to debut.

Bitcoin's turbulent journey
 

• The launch's untimely timing was one of the main causes of this underperformance. Notably, this week saw a continuation of the negative pressure, which resulted to Bitcoin falling below $57,000 on May 1 for the first time since late February.

• As soon as the market fell below $57,000, the bulls launched a strong comeback, pushing BTC above $58,000 for the day. The decline below $57,000 caused a comparable decline in the Fear and Greed Index, which entered Fear on May 2 for the first time since October 2023, despite the subsequent recovery.

• BitMEX creator Arthur Hayes identified the bottom as the bulls continued their recovery effort, pointing out that a slow price increase to make up for the earlier losses would happen soon. The CEO of CryptoQuant also stated that, in spite of the downward trend and the halving of Bitcoin, there were no indications of miner surrender.

• With a depressing 14.94% loss at the end of April—its worst month since November 2022—Michael Saylor's MicroStrategy capitalized on the decline to purchase the dip, adding 122 Bitcoin worth $7.8 million to their holdings, which now total 214,400 BTC.

• Coincidentally, on May 3, the surge in Bitcoin's recovery coincided with the release of the U.S. labor market data, which caused expectations of rate reduction from the Federal Reserve to change. Using the report as support, BTC saw a 6.46% spike on May 3 in order to regain the psychological $62,000 barrier.

• The surge in Bitcoin had an impact on the whole cryptocurrency market, and as of May 4, the worldwide crypto market capitalization had increased by 7.7%. Meme currencies Dogwifhat (WIF), Floki (FLOKI), and Dogecoin (DOGE) enjoyed increases during the upswing, registering double digit gains in a single day.

Scams and hacking are on the decline

• This week's news also included reports of breaches and scams pertaining to cryptocurrency. Notably, a user sent 1,155 wrapped Bitcoin (WBTC) tokens to the incorrect address as part of an address poisoning fraud, losing $69.3 million to the con artist.
   
• However, in spite of the fact that scammers and hack schemes were common in April and this week, Peck Shield, a blockchain security company, verified that losses from scams and hacks using cryptocurrency were just $60 million in April—a noteworthy 67% decrease from the amount in March.

• Additionally, according to CertiK, bitcoin sector losses due to cybersecurity concerns have just reached their lowest points since 2021.