Crypto Scoop: Bitcoin's 61-Day Streak Above $60,000 Ends Amid Market Volatility 

While the prices may be down, the crypto space has not slowed down. In this edition of the Crypto Scoop, we review the following:

• Price move of top cryptocurrencies
• Tether reports profits and chainanalysis partnership
• Binance CEO sentencing in the US and more. 

Price Move of Top Cryptocurrencies

Bitcoin's price took a hit this week as the cryptocurrency slid below $57,000, marking a 22% decline from its March all-time high. Ethereum has also experienced fluctuations as its price temporarily dropped below $3,000. This price drop coincides with significant outflows from U.S.-based spot Bitcoin exchange-traded funds (ETFs). BlackRock's iShares Bitcoin Trust, for the first time on May 1st, recorded an outflow of  $36.9 million, according to Farside. Inflows from the recently approved Bitcoin ETFs in Hong Kong did little to cushion the significant outflows from the US Bitcoin ETFs. According to data from Alternative Me, the fear and greed index sits at 54 for the first time since January, signalling a neutral sentiment where investors are neither fearful nor greedy over recent market conditions. 

Amidst these market movements, Standard Chartered Bank noted that Bitcoin could potentially fall further to $50,000 due to a combination of crypto-specific and broader macroeconomic influences. However, the bank maintained its end-of-year forecast of BTC, hitting $150,000 in 2024 and $250,000 in 2025. 

Meanwhile, Microstrategy continues to showcase confidence in Bitcoin's long-term value. The company announced it increased its holdings to 214,400 bitcoins after purchasing an additional 122 BTC for $7.8 million in April. Excitedly, the company also announced its plans to expand its Bitcoin endeavours with the launch of "Orange for Outlook," a Bitcoin-based decentralised ID solution. Microstrategy's Orange will be open source, processing up to 10,000 decentralised identifiers in a single transaction, enhancing digital interactions through trustless, tamper-proof technologies.

Despite the current market setbacks, some analysts remain optimistic about Bitcoin's recovery. Glassnode suggests that the market is forming a "local bottom," a phrase typically followed by a rebound. Arthur Hayes, former CEO of BitMEX, echoed this sentiment, predicting a "slow grind higher" for Bitcoin prices in the coming months. 

Tether reports record $4.52 billion profit in Q1 and announces partnership with Chainanalysis.

Despite a shrinking market share, Tether (USDT) has reported a record profit of $4.52 billion for the year's first quarter. This significant achievement comes even as its market share on centralised exchanges (CEXs) has dropped to 69%. Most of these profits stemmed from its holdings in US Treasuries, alongside gains from investments in Bitcoin and gold, underscoring the company's diversified investment strategy.

Paolo Ardoino, CEO of Tether, emphasised the company's commitment to transparency and stability, noting the remarkable profit as a testament to Tether's financial strength and responsible risk management practices. Additionally, Tether has enhanced its compliance measures through a partnership with Chainalysis. This collaboration will enable Tether to monitor the secondary market for illicit activities, including sanctions violations and terrorism financing, through advanced analytical tools.

Meanwhile, competition in the stablecoin market is intensifying. Circle's USDC has overtaken USDT in terms of transaction volume, marking a significant shift. In December 2023, USDC recorded 145 million transactions compared to USDT's 127 million, according to Visa. Although Tether still holds a larger market share and user base, with over 34.2 million unique wallets in April 2024 compared to USDC's 9.57 million, the gap in transaction activity highlights the competitive dynamics within the stablecoin sector.

Binance founder Changpeng Zhao sentenced to 4 months in prison

Changpeng Zhao, the founder of the Binance cryptocurrency exchange, has been sentenced to four months in prison after pleading guilty to violating U.S. money laundering laws. The sentence, handed down by Judge Richard Jones in the U.S. District Court for the Western District of Washington, is significantly less severe than the three years recommended by prosecutors. They had argued for a harsher penalty, citing Zhao's failure to maintain an effective Anti-Money Laundering (AML) program at Binance.

Despite the prosecution's push for a longer sentence, Judge Jones determined that there was no concrete evidence that Zhao was directly informed of specific illegal activities occurring within the exchange. While the judge agreed with some of the prosecution's assessments, he decided a shorter sentence was appropriate. Defence attorneys highlighted Zhao's lack of prior knowledge of the illicit activities, advocating for probation rather than prison time; however, the judge finalised this by sentencing Changpeng to four months in prison. 

Following the sentencing, Zhao turned to social media to express his gratitude towards his supporters. He acknowledged their encouragement and stated his intention to focus on education and remain a passive investor in the cryptocurrency industry. He emphasised the importance of compliance and noted that the legal scrutiny had helped ensure that Binance was operating correctly, reassuring users that their funds were safe.