The fallacy of scalability — why layer 2s won’t save crypto
Opinion by: Dan Hughes, founder of Radix Crypto has spent years betting on layer-2 (L2) solutions as its magic bullet for fixing issues with scalability. What if they’re the very thing putting us at risk?Instead of paving the way for mass adoption, this fixation has created a tangled web of rollups, bridges and fragmented liquidity, threatening blockchain’s core principles of decentralization and security. The dream of a seamless, decentralized network is fading, overshadowed by a complex system that echoes the inefficiencies and centralization of the traditional financial world. Are we scaling innovation or just recreating the past?The blockchain trilemmaL2s were supposed to mitigate the blockchain trilemma. Yet, while they may fill the gaps at the individual level, as a movement, L2 solutions have put crypto at risk of losing all three.The growing mass of L2s has led to a highly fractured ecosystem that’s difficult to navigate and relies on complex rollups and bridging solutions. This has led to parts of the ecosystem centralizing, drawing assets into fragmented liquidity silos, hindering security and stifling competition for smaller projects. These “solutions” have introduced large-scale friction and have also brought unnecessary security risks. While bridge-related hacks have become much less common in the last two years, hackers will always find new ways to balance the books — exploiting rollups, channels and sidechains. Many L2s’ reliance on sequencers or trusted validators creates additional cracks in the armor, single points of failure, while siloed liquidity reduces validator availability for smaller L2s, threatening network resilience.These solutions also leave an immense technical challenge for developers building applications hoping to integrate with L2s, requiring in-depth and specific knowledge of the mechanics of each L2 the application may need to touch.L2 proponents argue that these trade-offs are necessary and easily overcome, but there are even more fundamental issues here than sacrificing security, scalability or liquidity. Recent: AI has had its Cambrian moment — Blockchain’s is yet to comeCrypto’s endgame is a universal network where any asset or decentralized application can instantly interact with any other in a trustless, secure way. The friction that L2s introduce, however, sabotages this instant interoperability, while the centralization of sequencers and validators undermines the fundamentals of a trustless system. It is not just that this stymies scalability in decentralized finance (DeFi), but rather that it leads toward scaling something completely different, recreating the inefficiencies of the existing siloed, fragmented and middle-man-infested TradFi system.If the goal of DeFi is to move all financial activity onchain, it is imperative to do better than what we already have. Building the foundationsCrypto needs to build from the foundations up. Instead of outsourcing scalability and security, blockchain networks must prioritize them at layer 1.Sharding offers a clear path forward, but the industry must set higher goals and build a long-term solution rather than just a quick fix to “band-aid” the immediate scalability problem of the day. It is not just about increasing the shard count; it is how we shard. The Beacon Chain just adds a bottleneck, and dynamic sharding is complicated, limiting scalability with massive overheads. Even intra-validator sharding seems to solve all of these problems until you reach resource saturation on the network-facing node, which has to ingest all transactions, simply kicking the can down the road in search of more validators and diminishing returns.The obvious solution for scaling DeFi to the same capabilities as TradFi is state sharding, which is the state of the blockchain distributed across many different shards. Transactions that involve states from different shards create a temporary consensus process. The validators responsible for the transaction state communicate, agree (or not), and update the state atomically in all relevant shards. This allows transactions to be processed in parallel across multiple shards and even within shards themselves, leaving a shard’s only concern that the transactions modifying the state for which they are responsible do not have intersecting dependencies, significantly increasing throughput without compromising decentralization or accessibility. When these shards are integrated with atomic commitment, if any part of the transaction fails, everything aborts cleanly, and there’s no work needed to untangle hanging state changes.This is just one solution. DeFi will scale to onboard the planet. It is just a question of how soon and by what means. That said, solutions that focus on the fundamentals of L1 development rather than relying on a patchwork of L2s will eliminate fragmentation, reduce complexity, and ensure scalability and accessibility are again at the heart of blockchain networks. It comes down to the future that developers want to prioritize — tokenomics or the founding promises of Web3 — decentralization, efficiency and security. Scaling for the futureL1 solutions are solutions for everybody. They secure the very foundation of the ecosystem for developers, traders, general users and even several billion prospective users. Without resilient and scalable architecture in the foundations, one strong push is all it will take to cause this house of cards to collapse. Of course, specific use cases might be better with L2 solutions. A high-frequency trade settlement is a perfect example, but exceptions never prove the rule. From a whole-ecosystem perspective, developers must focus on integrated, native scalability solutions instead of just adding complexity and balancing more precarious “solutions” on top. Without adequately attending to the L1, nothing but problems await.Opinion by: Dan Hughes, founder of Radix.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Spot crypto scams early: California’s new tracker tool, explained
What is California’s crypto scam tracker tool? On Feb. 16, 2023, the Department of Financial Protection and Innovation (DFPI) in California launched the crypto scam tracker tool to help residents spot and avoid crypto scams. The tracker details crypto scams identified through a review of complaints submitted by the public.California’s DFPI crypto scam tracker is a searchable database that compiles complaints about fraudulent schemes. Investors can use the database to identify and avoid crypto scams. You can search the database using company name, scam type or keywords.The tracker includes a glossary to explain commonly used crypto terms and is regularly updated with new scam reports. The glossary may not provide extensive information on prevalent crypto scams, but it equips you with the knowledge required to identify scams and protect yourself.The scam tracker tool has compiled the information from public complaints and has not independently verified reported losses. As the DFPI receives complaints about new crypto scams, it updates the information on the tracker to keep the investors informed.Anyone who has fallen victim to a crypto scam or fraud or becomes aware of a scam not yet listed on the scam tracker can inform the DFPI. You can submit a complaint online at dfpi.ca.gov/file-a-complaint or contact the department via toll-free phone at (866) 275-2677. Companies that have been mistakenly included in the tracker can contact the DFPI at [email protected] for assistance.Did you know? In 2024, the DFPI received more than 2,668 complaints from investors in California and across the US. Based on these complaints, in partnership with the California Department of Justice, it shut down more than 26 different crypto scam websites and unraveled $4.6 million in consumer losses. How to use California’s crypto scam tracker tool California’s scam tracker tool is invaluable for identifying patterns in scammer behavior and helping investors avoid similar scams. Additionally, it encourages investors to report scams, contributing to the safety of the community.The tracker can be broadly used in three ways:For due diligence: You can search for specific companies or websites using the tool to uncover existing complaints. This feature helps you gain insights into others’ experiences with similar offers, allowing for a preliminary risk assessment. However, it’s important to note that the absence of complaints doesn’t guarantee legitimacy, as scam sites often rebrand or operate under different names.For analysis of messaging: The scam tracker enables you to analyze suspicious messaging by searching relevant keywords. You could use terms like “lending” or “insurance” to discover patterns and similarities between the offers you have received and past complaints. This comparative approach helps you identify potential red flags and recognize the tactics of the scamsters.For education and prevention: The tracker’s glossary serves as an educational resource, outlining various terms used in crypto scams. By familiarizing yourself with these tactics, you can significantly enhance your awareness and protect yourself from falling victim to fraudulent schemes. This proactive approach to education is essential in navigating the complex and often risky cryptocurrency market.Did you know? The Federal Bureau of Investigation’s (FBI) 2023 Cryptocurrency Fraud Report shows California faced the highest crypto-related losses in the US, reaching $1.15 billion. Within the FBI San Francisco Field Office’s jurisdiction, losses totaled $260,313,902, affecting 1,226 victims across 15 counties, including Alameda, San Francisco and Santa Clara. How does California’s scam crypto tracker tool work? The tracker compiles scams reported directly by consumers. The entries detail descriptions of losses to the complainants. To view the information shared with the DFPI, you may use the search function to explore complaints by company, scam type or keywords.For instance, if you search using the keyword “trading platforms,” the tracker lists scams associated with the keyword. The tracker is segregated into five columns, comprising primary subject, complaint narrative, scam type, website and screenshot.To change the order of the list, you can click the arrow beside the column header. You can also determine the number of entries you want to see at the time. To select the number of entries on a page, click the dropdown box at the bottom of the list and select your chosen number.To toggle between the pages displaying the entries, you can use the buttons “Previous” and “Next.” Fraudulent schemes listed by California’s crypto scam tracker tool The crypto scam tracker exposes many fraudulent schemes plaguing the crypto space. From fake job offers to pig butchering scams, the tracker sheds light on the tactics used to deceive investors. Here are some examples of scams listed in the glossary section of the tracker tool. Pig butchering scam: A pig butchering scam involves fraudsters building trust with you through social, romantic or business interactions before luring you into a fake investment scheme and persuading you to transfer funds to a fraudulent platform. These platforms might even display fake profits to encourage further deposits. Victims are denied withdrawal of funds on various pretexts, and scammers eventually disappear with the money. Rug pull scams: These schemes involve developers who intentionally attract investors with false promises of high returns only to disappear with the money later. They often create a buzz on social media by roping in celebrities, which shoots up the cost of the tokens. Then the developers sell off their tokens to make big profits and crash the price, leaving investors with worthless tokens.Did you know? A single X post by Argentine President Javier Milei, promoting the LIBRA token, caused its market capitalization to surge to $4 billion. However, the subsequent deletion of the post within hours led to a rapid crash, resulting in substantial losses for investors.Crypto job scams: Fraudsters pose as recruiters, luring victims with fabricated job offers to steal cryptocurrency and sensitive data. These positions usually offer easy money in return for “jobs” that don’t require any specific expertise. For instance, the fraudster may be offering 100 US dollars for watching an hour of advertisements. These scams are designed to trick individuals into depositing crypto with fraudsters and getting access to critical information such as passwords to their wallets.Wallet drainer scams: Crypto drainers are designed to steal your digital assets by transferring them to a scammer’s wallet. These schemes tend to use social engineering, where fraudsters build trust with you through deceptive emails, calls and fabricated documents. They create fake crypto websites, enticing you with promises of airdrops or non-fungible token (NFT) minting. You end up approving transactions, believing you are signing legitimate contracts or claiming rewards, only to have your wallet emptied.Fraudulent trading platform: The scammer creates a deceptive website or application, persuading victims to deposit funds by presenting it as an exclusive investment opportunity. These fraudulent platforms are designed to look authentic, often mimicking actual price movements and generating fake profits to appear legitimate.Imposter scams: Imposter scams involve fraudsters posing as trusted figures, such as company executives, support staff or government officials, to deceive victims into sending funds or sharing sensitive information. These scammers often use fake websites, social media accounts or phishing emails to appear credible. Bitcoin mining scams: Bitcoin mining scams lure investors with fake opportunities to fund mining operations. Scammers claim invested capital will build the necessary infrastructure, like GPUs and servers, promising a share of the mined Bitcoin (BTC) as returns. But these investments are fraudulent, and the promised infrastructure rarely, if ever, exists. Steps taken by other US agencies and states to raise crypto scam awareness Protecting crypto investors from these fraudulent practices requires a robust and multifaceted approach. US federal and state regulators are collaborating to educate investors about emerging scam patterns and compile a comprehensive defense against fraudsters.The Federal Trade Commission (FTC) protects consumers from scams. Users can report fraudulent activities on the FTC website and also find information on different types of scams. The FTC also manages the National Do Not Call Registry, which helps consumers block unwanted calls. Another key agency, the Consumer Financial Protection Bureau (CFPB), plays an active role in regulating crypto assets. It issues fraud warnings, investigates companies, and reviews consumer complaints. Several US states have also taken initiatives to combat scams:New York: The New York Attorney General’s Office runs the Consumer Frauds and Protection Bureau, which investigates scams and offers tips to help consumers stay safe.Massachusetts: The Massachusetts Attorney General’s Office uses advanced tools like the TRM Labs blockchain intelligence platform to trace stolen funds and fight crypto-related scams.Texas: The Texas Attorney General’s Consumer Protection Division assists scam victims and guides them to avoid fraud.Florida: The Florida Department of Agriculture and Consumer Services maintains a Consumer Protection webpage with scam prevention tips and a complaint submission option.The US follows a multi-layered approach to crypto scam prevention and consumer protection. Federal agencies like the FTC and CFPB provide nationwide oversight and resources regarding the crypto space, while state-level initiatives offer localized support and specialized tools. This collaborative effort, combining education with enforcement, underscores the importance of vigilance and proactive measures in dealing with the complex landscape of scams.However, due to the fragmented crypto crime reporting system in the US, industry leaders advocate for a unified platform that consolidates data and allows victims to track complaints. While still in development, understanding this need helps set realistic expectations and supports ongoing reform efforts.As more stakeholders push for standardized measures, such a platform could significantly improve transparency, support victims, and foster stronger accountability within the crypto space.
What are proof-of-reserves audits, and how do they work?
Key takeawaysPoR audits are cryptographic verifications used by cryptocurrency exchanges to prove they hold sufficient assets to cover customer deposits. Using methods like Merkle trees and zero-knowledge proofs, PoR ensures transparency, similar to how capital reserves are mandated in traditional finance for stability.Coinbase’s cbBTC uses PoR to verify that for every wrapped Bitcoin, an equivalent amount is securely held in Coinbase’s custody. PoR audits can verify asset holdings but do not account for liabilities, which can mislead users about an exchange’s solvency. Proof-of-reserves (PoR) audits have become a vital tool in the cryptocurrency industry to promote transparency and security, especially in the wake of high-profile exchange collapses like FTX. While similar in concept to traditional banking capital adequacy requirements, PoR audits come with certain limitations, especially in their inability to verify liabilities and their reliance on periodic reports. This article explores PoR audits, their role in crypto and their evolution into more robust models for ensuring exchange solvency.What are proof-of-reserves audits?Cryptocurrency exchanges are increasingly adopting proof-of-reserves (PoR) audits to verify they hold sufficient assets to cover user deposits. These cryptographic audits, using Merkle trees and onchain verifications, serve as a transparency mechanism in crypto, much like capital adequacy requirements do for traditional finance.But does the PoR concept draw inspiration from TradFi?In traditional banking, regulators have long mandated that financial institutions maintain a certain level of capital reserves to safeguard against potential risks. This framework ensures that banks can absorb unexpected losses and continue to operate during economic downturns. A pivotal moment highlighting the importance of such regulations was the 2008 financial crisis. During this crisis, many banks faced significant losses due to high-risk exposures, leading to a global economic downturn. In response, international regulatory bodies introduced more stringent measures to bolster the resilience of financial institutions.One such measure is the Basel III framework, established by the Basel Committee on Banking Supervision. Basel III set forth comprehensive reforms to improve the regulation, supervision and risk management within the banking sector. Common equity tier 1 (CET1) capital requirements mandate financial services firms to hold a minimum amount of common equity relative to their risk-weighted assets, ensuring they have a solid capital base to cover potential losses.Leverage ratio serves as a backstop to the risk-based capital requirements, limiting the extent to which a bank can leverage its capital base.Liquidity coverage ratio (LCR) ensures that banks have sufficient high-quality liquid assets to withstand a 30-day stressed funding scenario.Net stable funding ratio (NSFR) promotes resilience over a longer time horizon by requiring banks to fund their activities with stable sources of funding.These measures aim to enhance the banking sector’s ability to absorb shocks arising from financial and economic stress, thereby reducing the risk of systemic crises.A parallel concept known as proof-of-reserves (PoR) audits has emerged in the world of cryptocurrencies to promote transparency and trust within digital asset platforms. PoR audits are cryptographic verifications that confirm whether a cryptocurrency exchange or custodian holds the assets it claims on behalf of its users. These cryptographic audits, using Merkle trees and onchain verifications, serve as a transparency mechanism in crypto. The primary goal is to provide assurance that these platforms are solvent and can meet customer withdrawal demands. Some audits provide the dollar equivalent of the reserves, whereas others report in major cryptocurrencies like Bitcoin (BTC) and Ether (ETH).How do proof-of-reserves audits work?PoR audits use cryptographic methods like Merkle trees to verify that exchanges hold sufficient assets to cover user deposits, but they don’t prove solvency, as they don’t account for hidden liabilities. These audits are designed to verify that cryptocurrency exchanges and custodians actually hold the assets they claim on behalf of their users. The process typically begins with asset verification, where platforms disclose wallet addresses or use cryptographic proofs, such as Merkle trees, to confirm holdings without revealing sensitive account details. A Merkle tree allows user balances to be hashed and aggregated into a single “Merkle root,” which auditors and users can verify independently. Additionally, a third-party auditor may be involved to assess whether the exchange’s reserves match its reported holdings. Alongside this, customer liability verification ensures that total deposits do not exceed available reserves, strengthening the credibility of the exchange’s financial standing.While traditional PoR audits rely on Merkle trees, they have limitations, such as the inability to prove solvency (i.e., whether an exchange has hidden liabilities or outstanding loans). To address this, ZK-proofs are being explored as a more private and secure method of reserve verification. Zero-knowledge (ZK) proofs offer a more advanced solution by enabling exchanges to mathematically prove they are fully backed without revealing sensitive data, paving the way for proof-of-solvency audits.A ZK-proof-based PoR system could allow an exchange to mathematically prove that its reserves exceed its liabilities without revealing individual account balances or wallet addresses. This eliminates the risk of exposing sensitive user data while still providing strong cryptographic assurance that the exchange is solvent. Some blockchain projects and exchanges are experimenting with ZK-proofs for PoR, but adoption remains in the early stages.Ultimately, PoR audits are a critical step in improving transparency in crypto markets, especially after past exchange failures like FTX, which falsely represented its reserves. By combining Merkle trees with ZK-proofs, the industry could move toward proof-of-solvency audits, which not only verify reserves but also ensure an exchange does not carry undisclosed debts. Here are the differences between Merkle tree-based PoR and zero-knowledge proof-based PoR:If widely adopted, these methods could enhance trust in centralized exchanges (CEXs) while maintaining user privacy, offering a regulatory-friendly yet decentralized approach to crypto financial accountability.Below is a list of exchanges and their PoR audit details.Did you know? Following a hack in February 2025, Bybit underwent a comprehensive PoR audit conducted by the cybersecurity firm Hacken. This audit confirmed that Bybit’s holdings fully covered user liabilities, maintaining a 1:1 ratio for all in-scope assets. The audit encompassed a full verification of wallets containing 40 different asset types, ensuring transparency and security for all users.What is Coinbase’s cbBTC, and how does it ensure trust through PoR?Coinbase’s cbBTC is a token that represents Bitcoin (BTC) 1:1 onchain, fully backed by the equivalent amount of Bitcoin held in Coinbase’s custody. By wrapping BTC into cbBTC, users can interact with it in decentralized applications (DApps) and across various blockchains, such as Ethereum, Solana and Base, while retaining its Bitcoin value.Coinbase uses PoR to ensure transparency and verify that the wrapped cbBTC tokens are fully backed by actual Bitcoin reserves held by Coinbase. PoR audits confirm that Coinbase holds sufficient Bitcoin in its reserves to support all issued cbBTC, maintaining trust and security for users who wrap or redeem their Bitcoin.PoR audit and transparency for cbBTC1:1 backing of cbBTC by Bitcoin: Coinbase ensures that for every cbBTC token issued, there is an equivalent amount of Bitcoin securely stored in its custody. This process ensures the integrity and security of cbBTC, allowing users to confidently use their wrapped tokens in decentralized finance (DeFi) and across multiple blockchain platforms.PoR for user assurance: PoR audits help verify Coinbase’s claims by cross-checking its Bitcoin reserves with the number of cbBTC tokens in circulation. This audit ensures that users’ wrapped tokens are always fully backed, offering additional security and transparency. As part of its PoR commitment, Coinbase has published audit reports that confirm its reserves.Secure handling of Bitcoin reserves: Coinbase ensures that the Bitcoin backing cbBTC is not sold, transferred or used for other purposes. The Bitcoin is held securely to maintain the 1:1 backing for cbBTC, ensuring that users can redeem their wrapped tokens for Bitcoin at any time.CbBTC is accessible to Coinbase customers with verified accounts who are based in select regions, including the US (excluding New York), the UK, the European Economic Area (EEA), Australia, Singapore and Brazil. Additionally, users can acquire cbBTC through Coinbase Wallet or other third-party exchanges that offer support for it.Did you know? While Coinbase provides transparency through PoR, you should be aware that the wrapping or unwrapping of cbBTC does not constitute a taxable event for the IRS, as clarified by Coinbase. However, you should consult tax professionals for personalized guidance.Limitations of PoR approachWhile proof-of-reserves audits verify that exchanges hold assets, they fail to account for liabilities, creating a false sense of security. Additionally, PoR audits are mere snapshots with no real-time oversight.While proof-of-reserves audits enhance transparency by verifying that exchanges hold sufficient assets, they come with notable limitations that can create a false sense of security. Liability exclusion concern: One of the biggest concerns is the exclusion of liabilities. PoR audits only confirm the assets an exchange holds, not whether they have outstanding debts, obligations or hidden leverage. This was a critical issue with FTX, which falsely presented itself as solvent by showcasing its assets without disclosing the massive liabilities owed to creditors and users. Without a simultaneous proof-of-liabilities (PoL) audit, an exchange can appear well-funded while actually being deeply insolvent. Both assets and liabilities are needed to be included in this exercise for it to be completely useful.Snapshot audits and ongoing solvency risks: Another key limitation is the snapshot nature of these audits, which provide verification for a single moment in time but do not guarantee ongoing solvency. An exchange could pass a PoR audit today and deplete reserves the next day by moving funds, taking on new liabilities or engaging in risky lending practices. For instance, when Binance published its first PoR audit in December 2022, it faced criticism because it was a one-time report rather than a real-time solvency check. Unlike traditional finance, where banks undergo continuous regulatory scrutiny and stress tests, crypto PoR audits lack ongoing oversight, leaving room for manipulation between audit periods. Some firms, like Nexo, introduced real-time PoR in 2021 but discontinued it in 2024, as their auditors could no longer support the capability.Reliance on third-party auditors: Lastly, PoR audits rely heavily on third-party auditors, making their effectiveness dependent on the credibility and independence of the auditing firm. Some exchanges have opted for internal audits, which raises concerns about objectivity and transparency. A case in point is Mazars Group, the auditing firm that conducted PoR reports for Binance and Crypto.com in 2022. It later withdrew from providing crypto audit services, citing concerns over the reliability of the process. This incident underscored the industry’s need for stronger, independent and standardized auditing frameworks to ensure that PoR audits genuinely reflect an exchange’s financial health rather than serving as a mere public relations tool.Proof-of-reserves as a step forward, not a perfect solutionPoR is a good step in the right direction. It is not perfect, but there is no need to make perfection an enemy of progress. Many of the recent developments in the cryptocurrency industry look promising, where PoR can not only serve native crypto assets but could also help traditional finance when their assets and liabilities are tokenized. In its ideal form, PoR should be used to assess the solvency of any counterparty, whether in DeFi, centralized finance (CeFi) or traditional finance (TradFi), making the future of finance more robust and reliable with its implementation
Bitcoin runs toward $86K after Fed maintains course, projecting two rate cuts in 2025
Bitcoin (BTC) price action turned bullish on March. 19 as markets grew anxious for the release of the Federal Open Market Committee (FOMC) minutes and a press conference from Federal Reserve Chair Jerome Powell. BTC/USDT 1-day chart. Source: TradingViewGenerally, traders keep a close eye on FOMC minutes, along with Powell’s comments, to obtain direct insights into the Fed’s take on US economic health, along with their plans for monetary policy and interest rates. In the presser, Powell confirmed that the Fed intends to leave interest rates unchanged, in its target range between 4.25% to 4.5%, where they have been since December 2024. Although the Fed downgraded its outlook for economic growth and emphasized that tamping inflation remains a sticking point, the Fed’s statements largely aligned with market participants’ expectations. Crypto and equities traders have also been forecasting the reduction of the Fed’s policy of quantitative tightening (QT), and the FOMC minutes confirmed that the central bank will reduce “the monthly redemption cap on Treasury securities from $25 billion to $5 billion.” Changes to FOMC statement (in red). Source: FederalReserve.govRelated: Bitcoin price volatility ramps up around FOMC days — Will this time be different? In response to Fed statements, Bitcoin price added to its daily gains, rallying to an intraday high at $85,950 at the time of writing. The DOW also added 400 points, while the S&P 500 index gained 77. Powell and Fed policymakers’ verbal commitment to two additional rate cuts in 2025 also line up with crypto traders’ expectations and could further buoy the current recovery in Bitcoin price.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Price analysis 3/19: BTC, ETH, XRP, BNB, SOL, ADA, DOGE, LINK, LEO, TON
Bitcoin (BTC) has been clinging to the 200-day simple moving average ($84,359), which suggests that the bulls have kept up the pressure. That improves the prospects of an upside breakout, signaling the corrective phase may be ending. Derive founder Nick Forster told Cointelegraph that the current pullback is a normal correction that Bitcoin experiences during long-term rallies. He anticipates that Bitcoin’s cycle peak is yet to come.A positive sign in favor of bulls is that the US spot Bitcoin exchange-traded funds (ETFs) have again started to witness inflows. According to Farside Investors data, spot Bitcoin ETFs have recorded $525 million in inflows since March 14.Crypto market data daily view. Source: Coin360However, not everyone is bullish on Bitcoin. CryptoQuant founder and CEO Ki Young Ju said in a post on X that Bitcoin could remain in a bearish or sideways trend for the next 6-12 months as the bull cycle is over.Could Bitcoin break out of the 200-day SMA, triggering a rally in altcoins? Let’s analyze the charts of the top 10 cryptocurrencies to find out.Bitcoin price analysisBitcoin is facing selling at the 200-day SMA, but the bulls have not given up much ground. That suggests the bulls are not dumping their positions as they expect a breakout in the near term.BTC/USDT daily chart. Source: Cointelegraph/TradingViewThe bullish momentum is expected to pick up on a break and close above the 20-day exponential moving average ($85,441). The BTC/USDT pair could then climb to the 50-day SMA ($91,904). This optimistic view will be negated in the near term if the price turns down sharply from the 20-day EMA and breaks below $80,000. The pair may then tumble to $76,606. Buyers are expected to defend the $76,606 to $73,777 zone with all their might.Ether price analysisThe narrow range trading in Ether (ETH) resolved to the upside on March 19, indicating that the bulls have overpowered the bears.ETH/USDT daily chart. Source: Cointelegraph/TradingViewSellers will try to halt the relief rally at the breakdown level of $2,111, but if the bulls prevail, the ETH/USDT pair could ascend to the 50-day SMA ($2,468). If this level is also crossed, the pair could surge to $2,850.Instead, if the price turns down sharply from $2,111, it will signal that the bears are trying to flip the level into resistance. The bears will gain the upper hand if they sink and maintain the price below $1,800.XRP price analysisXRP (XRP) surged above the moving averages on March 19, opening the doors for a rally to the resistance line.XRP/USDT daily chart. Source: Cointelegraph/TradingViewIf the price turns down from the resistance line, the XRP/USDT pair is likely to find support at the 20-day EMA ($2.36). A bounce off the 20-day EMA increases the likelihood of a break above the resistance line. The pair may then climb to $3.On the other hand, if the price turns down from the resistance line and breaks below the moving averages, it heightens the risk of a drop to $2. Sellers will be in control on a close below $2.BNB price analysisBNB (BNB) closed above the 50-day SMA ($618) on March 17, but the bulls are struggling to sustain the higher levels.BNB/USDT daily chart. Source: Cointelegraph/TradingViewThe pullback is expected to find support at the 20-day EMA ($602). If the price rebounds off the 20-day EMA with strength, it will suggest a change in sentiment from selling on rallies to buying on dips. That increases the possibility of a break above $644. The BNB/USDT pair could then rally to $686.Conversely, a break and close below the 20-day EMA suggests that the bulls are booking profits. That may sink the pair to $550.Solana price analysisSolana (SOL) rebounded off the $120 to $110 support zone on March 18, indicating that the bulls are aggressively defending the zone.SOL/USDT daily chart. Source: Cointelegraph/TradingViewIf buyers catapult the price above the 20-day EMA ($137), it will suggest the start of a sustained recovery. The SOL/USDT pair could rally to the 50-day SMA ($167) and, after that, to $180.Contrarily, if the price turns down from the 20-day EMA, it will signal that the bears remain in control. A break below the support zone suggests the start of the next leg of the downtrend. There is minor support at $98, but if the level breaks down, the pair could plummet to $80.Cardano price analysisCardano (ADA) has been trading between the uptrend line and the moving averages for the past few days, indicating indecision about the next directional move.ADA/USDT daily chart. Source: Cointelegraph/TradingViewThe downsloping moving averages and the RSI just below the midpoint give a slight edge to the bears. If the price turns down from the moving averages and breaks below the uptrend line, the ADA/USDT pair could drop to $0.58 and eventually to $0.50.On the contrary, a break and close above the moving averages suggests that the bulls are back in the game. The pair could ascend to $1.02, where the bears are expected to sell aggressively.Dogecoin price analysisDogecoin (DOGE) is facing selling near the 20-day EMA ($0.18), indicating that the bears are active at higher levels.DOGE/USDT daily chart. Source: Cointelegraph/TradingViewThe bears will try to sink the price below the $0.14 support. If they manage to do that, it will signal the resumption of the downtrend. The DOGE/USDT pair could plunge to psychological support at $0.10.If buyers do not give up much ground from the current level, it improves the prospects of a break above the 20-day EMA. If that happens, the pair could climb to $0.25 and thereafter to $0.29.Related: Fund managers dump US stocks at record pace — Can recession fears hurt Bitcoin?Chainlink price analysisChainlink (LINK) has risen to the 20-day EMA ($14.66), but the bulls are expected to face stiff resistance from the bears.LINK/USDT daily chart. Source: Cointelegraph/TradingViewIf the price turns down from the 20-day EMA, the bears will again try to sink the LINK/USDT pair below the $12 support. If they manage to do that, the pair could descend to the crucial support at $10.Alternatively, a break and close above the 20-day EMA suggests that the breakdown below the channel was a bear trap. The pair may climb to the 50-day SMA ($17.22) and later to $19.25.UNUS SED LEO price analysisUNUS SED LEO (LEO) has been trading in a tight range between $10 and $9.60 for the past few days, suggesting that the bulls are holding on to their positions as they anticipate a move higher.LEO/USD daily chart. Source: Cointelegraph/TradingViewIf buyers drive and maintain the price above $10, the LEO/USD pair will complete a bullish ascending triangle pattern. The pair may then start an upmove toward the pattern target of $12.04.Contrary to this assumption, if the price turns down and breaks below $9.60, it will signal that the bulls have given up. The pair may then drop to the uptrend line, which is again expected to attract buyers. Toncoin price analysisToncoin (TON) has been facing resistance at the 50-day SMA ($3.56), but a positive sign is that the bulls have not ceded ground to the bears.TON/USDT daily chart. Source: Cointelegraph/TradingViewThat increases the likelihood of a break and close above the 50-day SMA. If that happens, the TON/USDT pair could climb to $4.50 and then to $5. Sellers are expected to mount a vigorous defense near $5.This positive view will be invalidated in the near term if the price turns down and breaks below the 20-day EMA ($3.26). That will indicate selling at higher levels. The pair may then slump to $3.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The crypto industry has turned into a global memecoin casino
Opinion by: Georgii Verbitskii, founder of TYMIO Memecoins have dominated the crypto narrative over the past year, leading to a series of high-profile events where most traders lost money while insiders profited. The Libra token alone, by some estimations, resulted in $4.4 billion in public losses. Unlike previous crypto cycles where broad market growth rewarded holders, today’s memecoin speculation has created an environment where the average trader’s chances of success are slim. How did memecoins happen to drive the market to a dead end, and will this ever end?Speculation or investment?Investing and speculation are fundamentally different games with distinct rules. Investing isn’t about making quick money. It is about purchasing the right assets to protect capital in the long haul. Usually, investors don’t wait for the right “entry point” but purchase assets to be held for years. Such assets grow relative to fiat currencies based on fundamental factors. For example, stocks, gold and Bitcoin (BTC) rise against the US dollar, which faces unlimited issuance and inflation.Some assets have extra growth drivers — rising property demand, growing company profits or even Bitcoin adoption by governments — but these are bonuses. The key point is that your investment is not supposed to lose all its value against the fiat. Investors follow long-term macroeconomic trends, which helps them preserve purchasing power.On the other hand, speculation is a zero-sum game where the skilled minority profits because of the uninformed majority. Typically, such people are chasing quick profits. This is what happens with memecoins. Unlike traditional investments, they lack intrinsic value, dividends or interest returns. While in the case of Bitcoin, the “greater fools” who buy after a trader could be companies adopting the Bitcoin standard, followed by entire nations establishing strategic Bitcoin reserves after the US, in the case of a token like LIBRA, the greater fool is the one who bought it after Javier Milei’s announcement on X. That’s it — there are no more buyers.Unregulated gamblingMemecoins operate similarly to online casinos. They provide entertainment and promise quick profits but favor only those who create and promote them. Unlike regulated gambling, where risks are well-known, memecoins are often hyped by influential figures — starting from the famous crypto influencer Murad and ending with the US president — and, consequently, social media narratives. The harsh reality is that, like in a casino, the odds overwhelmingly favor insiders and early adopters while the majority suffer losses.Recent: Solana’s token minting frenzy loses steam as memecoins get torchedThe memecoin craze clearly thrives on speculation and psychological triggers — this is the game that evolves emotions and leaves players’ wallets empty. Platforms like Pump.fun, which facilitate memecoin launches, have reaped massive profits, proving that selling shovels is the best way to profit from a gold rush. How can opening a casino require a license and choosing a location in strictly designated areas, while anyone can launch their own memecoin? Well, the situation is likely to change soon.Will this ever end?The lack of regulatory oversight has enabled the explosive growth of memecoins. How did we get here? Let’s remember the SEC’s activities in recent years, namely lawsuits against major decentralized finance (DeFi) protocols and large crypto companies that tried to play fair. Another serious step was Operation Chokepoint 2.0, directed by the previous US administration against the crypto industry as a whole. All this not only stifled well-intentioned companies that created something meaningful in crypto but also indirectly triggered a counterweight in the form of other players who took advantage of unclear rules.As a result, crypto exchanges have recently been listing mostly memecoins almost immediately after their release. Chaos in the field of regulation has turned the crypto industry into a sizable global casino. While earlier, everyone hoped to win in this gamble, now, along with the losses, it seems that general disappointment is setting in.There is a ray of hope. The current US administration can unequivocally be called “crypto-friendly,” which means we will likely see significant regulation progress this year. This is especially crucial for the DeFi sector, which has long found its product-market fit and is rapidly developing, capturing the markets of traditional finance (banks, brokers and other intermediaries).It is essential to rewrite outdated financial regulations as quickly as possible. The old rules were designed for a system based on trust in centralized intermediaries, whereas the new framework must incorporate smart contracts — in other words, executable blockchain code.Stronger regulatory frameworks could introduce stricter requirements for token launches, including mandatory disclosures of creators’ personalities and restrictions on centralized exchange listings. Yet market participants may learn through costly mistakes even without direct intervention and become more cautious about memecoin investments. After a series of harsh but sobering memecoin rug pulls, the Web3 community should finally realize that such projects rarely reward risk-takers. If someone still decides to take a chance, they should treat it like a trip to the casino: only bringing the amount they are prepared to lose and making the most of the joy from this experience. For those to whom this approach doesn’t appeal or those truly serious about growing their net worth to pass it on to future generations, welcome to the real world of bland, regular Bitcoin purchases. It seems the market is only now starting to realize this.Opinion by: Georgii Verbitskii, founder of TYMIO.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
US stablecoin bill likely in ‘next 2 months’ — Trump’s crypto council head
The US government is taking steps to ensure the dominance of the US dollar in the world of digital assets. Bo Hines, the executive director of the President’s Council of Advisers on Digital Assets, recently announced that comprehensive stablecoin legislation is expected to be finalized in the coming months. This move highlights the government’s urgency to maintain the US dollar’s dominance in onchain activity.
Hines made this announcement at the Digital Asset Summit in New York on March 18, where he also mentioned that stablecoin legislation is “imminent” following the Senate Banking Committee’s approval of the GENIUS Act last week. The GENIUS Act, which stands for Guiding and Establishing National Innovation for US Stablecoins, aims to establish collateralization guidelines for stablecoin issuers and ensure compliance with Anti-Money Laundering laws.
The bipartisan support for this bill is a positive sign, as it shows that both sides of the aisle recognize the importance of US dominance in the digital asset space. Hines believes that this legislation could be on the president’s desk within the next two months.
The market may be underestimating the potential impact of this bill on the US economy. Hines believes that it could significantly boost the US dollar’s dominance, improve payment rails, and even alter the course of financial markets. However, some banks are pushing back against this legislation, fearing that it could affect their market share.
The US dollar currently accounts for the majority of the $230 billion worth of stablecoins in circulation, making it the preferred currency for funding cryptocurrency accounts and sending remittances overseas. While some experts predict that this may change in the future as stablecoins become multicurrency, for now, the digital dollar remains the top choice.
US Treasury Secretary Scott Bessent has also emphasized the importance of stablecoins in maintaining the dollar’s status as the global reserve currency. He stated that the government will use stablecoins to achieve this goal, which explains the urgency to push this legislation forward.
In conclusion, the US government’s efforts to establish comprehensive stablecoin legislation highlight their determination to maintain the US dollar’s hegemony in the digital asset space. This move could have a significant impact on the economy and financial markets, and it will be interesting to see how it unfolds in the coming months.
All but 1 US spot Bitcoin ETF in the red this March
Nearly all United States spot Bitcoin exchange-traded funds (ETFs) had net negative performances in March as analysts expect a bearish Bitcoin trend of up to 12 months. Farside Investors data showed that spot Bitcoin ETFs struggled in March, with net outflows surpassing their monthly net inflows. Asset manager BlackRock’s iShares Bitcoin Trust ETF (IBIT) suffered the most, with outflows reaching $552 million and inflows of only $84.6 million. According to the data, Fidelity’s Wise Origin Bitcoin Fund (FBTC) saw outflows of over $517 million and had inflows of only $136.5. The data also showed that Grayscale’s Bitcoin Trust ETF (GBTC) had outflows of over $200 million and had zero inflows. However, Grayscale’s Bitcoin Mini Trust ETF (BTC) is the only one that defied the trend, with zero net outflows for March and over $55 million in net inflows. Spot Bitcoin ETF flows in millions. Source: Farside InvestorsUS Spot Bitcoin ETFs had outflows of over $1.6 billion in MarchOverall, the spot Bitcoin ETFs combined had outflows of over $1.6 billion in the first 17 days of March and recorded only $351 million in inflows. This wasn’t enough to offset the losses, bringing the net outflow to nearly $1.3 billion.Meanwhile, Ether-based investment products aren’t doing any better. BlackRock’s iShares Ethereum Trust ETF (ETHA) had the most outflows, reaching $126 million, but it did not record any monthly inflows. Fidelity’s Ethereum Fund (FETH) recorded outflows of about $73 million but only had $21 million in inflows. Ether ETFs had negative results throughout March, except for March 4, when inflows reached $14 million. However, spot Ether ETFs performed poorly in the rest of March, with over $300 million in total outflows.Spot Ether ETF flows in millions. Source: Farside InvestorsRelated: Yuga exec warns about ‘true bear market’ Ether price as whales scrambleCryptoQuant CEO says BTC bull cycle is overThe performance of crypto exchange-traded products comes as sentiments for Bitcoin and the crypto market turn bearish. On March 18, CryptoQuant founder and CEO Ki Young Ju said the “Bitcoin bull cycle is over.” The executive expects up to a year of bearish or sideways price action. Ju argued that onchain metrics indicate a bear market. The executive said that new whales are selling low as liquidity dries up. Magazine: Mystery celeb memecoin scam factory, HK firm dumps Bitcoin: Asia Express
LIBRA memecoin orchestrators named as defendants in US class-action suit
The Libra token scandal is set to be reviewed by the Supreme Court of New York after a newly filed class-action lawsuit accused its creators of misleading investors and siphoning over $100 million from one-sided liquidity pools.Burwick Law filed the suit on behalf of its clients against Kelsier Ventures, KIP Protocol and Meteora on March 17 for launching the Libra (LIBRA) token in a “deceptive, manipulative and fundamentally unfair” manner. The token was then promoted by Argentine President Javier Milei on X as an economic initiative to stimulate private-sector funding in the country.The law firm slammed the two crypto infrastructure and launchpad firms behind LIBRA — KIP and Meteora — claiming that they used a “predatory” one-sided liquidity pool to artificially inflate the memecoin’s price, allowing insiders to profit while “everyday buyers bore the losses.”Within hours, the insiders “rapidly siphoned approximately $107 million from the liquidity pools,” causing a 94% crash in LIBRA’s market value, Burwick Law said in a March 17 filing shared on X.Source: Burwick LawPresident Milei was mentioned in the lawsuit but wasn’t named a defendant.Burwick accused the defendants of leveraging Milei’s influence to aggressively promote the token, deliberately creating a false sense of legitimacy and misleading investors about its economic potential.Approximately 85% of LIBRA’s tokens were withheld at launch and the “predatory infrastructure techniques” allegedly used by the defendants weren’t disclosed to investors, Burwick said.“These tactics, combined with omissions about the true liquidity structures, deprived investors of material information.”Burwick is seeking compensatory and punitive damages, the disgorgement of “unjustly obtained” profits and injunctive relief to prevent further fraudulent token offerings.Related: Law firm demands Pump.fun remove over 200 memecoins using its IPData from blockchain research firm Nansen found that of the 15,430 largest Libra wallets it examined, over 86% of those sold at a loss, combining for $251 million in losses.Only 2,101 profitable wallets were able to take home a combined $180 million in profit, Nansen noted in a Feb. 19 report.The venture capital firm behind the LIBRA token, Kelsier Ventures, and its CEO, Hayden Davis, were apparently two of the biggest winners from the token launch. They claim to have netted around $100 million.Davis, who is now facing a potential Interpol red notice following an Argentine lawyer’s request, said on Feb. 17 that he didn’t directly own the tokens and wouldn’t sell them.Meanwhile, Milei has distanced himself from the memecoin, arguing he didn’t “promote” the LIBRA token — as fraud lawsuits filed against him have alleged — and instead merely “spread the word” about it.Argentina’s opposition party called for Milei’s impeachment but has had limited success thus far.Magazine: Meet lawyer Max Burwick — ‘The ambulance chaser of crypto’
Hyperliquid opened doors to ‘democratized’ crypto whale hunting: Analyst
Crypto whale tracking on the Hyperliquid blockchain has enabled traders to target whales with prominent leveraged positions in a “democratized” attempt to liquidate them, according to the head of 10x Research.Hyperliquid, a blockchain network specializing in trading, allows traders to publicly observe what type of positions a whale is holding, and since these positions are leveraged, the market can assess the liquidation levels unless an additional margin is added, Markus Thielen said in a March 17 report.Source: 10x Research“This transparency opens the door for coordinated efforts, where groups of traders could intentionally target these stop levels to trigger liquidations,” he said. It’s a common belief in the crypto market that whales with substantial holdings can influence the market through their trading tactics, such as stop-loss hunting, to deliberately trigger other traders’ stop-loss orders and liquidate their positions. Thielen says the recent actions from traders show this balance of power could be shifting. “In effect, stop-hunting is being ‘democratized,’ with ad-hoc groups now playing a role once reserved mainly for market-making desks, or treasury teams, at exchanges before tighter regulatory scrutiny,” Thielen added. Thielen told Cointelegraph that it’s still “unclear if this type of activity will become widespread onchain, but as always, transparency can cut both ways.” Why are traders trying to liquidate whales?This isn’t the first time smaller traders have attempted to take down larger entities through coordinated trading tactics. Thielen says crypto traders trying to liquidate whales have echoes of the GameStop short squeeze, which saw small traders flip the table on Wall Street short-sellers by buying GameStop’s stock, sending it to all-time highs of over $81 to liquid their positions. “This reminds me of the dynamics we saw during the GameStop saga in 2020/2021, where aggressive short squeezes drove rapid price spikes,” he said. Related: Bybit CEO on ‘brutal’ $4M Hyperliquid loss: Lower leverage as positions grow“When stop levels get triggered, prices often accelerate in that direction, providing liquidity for others to cover. We’ve seen similar tactics from market makers and exchanges in the crypto space over the years.” Hunt is still on for 40x leveraged Bitcoin short-sellerOn March 16, a crypto whale known for placing large, highly leveraged positions on Hyperliquid opened a 40x leveraged short position at $84,043 for over 4,442 Bitcoin (BTC), worth over $368 million on March 16, facing liquidation if Bitcoin’s price surpassed $85,592.The move didn’t go unnoticed, and pseudonymous trader CBB sent out the call on X to gather a team of traders with enough funds to liquidate the whale’s position. Source: CBBThielen said in the 10x report that on March 16, Bitcoin surged by 2.5% within minutes, partly because of a coordinated effort to liquidate a whale’s short position on Bitcoin perpetual via Hyperliquid.The whale has since increased their position to $524 million, and at one point, the whale hunters nearly got their wish when the price of Bitcoin hit $84,583.84, according to CoinGecko. Source: CRGHowever, some speculate the exposed short position could be intentional. Hedge fund trader Josh Man said in a March 17 post to X that the whale might be purposefully trying to get liquidated. “So this there is a fairly rare and not widely used technique of self-liquidation and this FEELS a little like that,” he said. “In such events, the seller is actually creating a bomb designed to go off and create a rally from the liquidation of his own short. One would expect that he has a large offsetting long versus short.” Source: Josh ManMagazine: Crypto fans are obsessed with longevity and biohacking: Here’s why