The Breakdown First Five - Thursday, June 20, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Bitcoin Tumbleweeds

Average Bitcoin block size has ebbed to a twelve month low of 1.55MB. Transactions per second have also slowed in June as miners unplug equipment in the face of reduced profitability. While the Runes memecoin protocol provided a frenzy of minting activity around the halving, that has dropped dramatically. Secondary markets are still very active. Ordinals activity has also fallen off a cliff. Lack of activity makes this a great time to consolidate UTXOs.

4. “Insane” Short Interest

Bitcoin shorts are piling on in hopes that the price can’t get to $70,000. According to Coinglass data there’s currently $1.67B in positions that would be liquidated if that level is reached. Trader Ash Crypto called it an “insane amount of Bitcoin short liquidations piling up at the topside.” We’re a long way from an upside liquidation cascade with price relatively static over the past week, but the fuel is now in place. 

3. German Officials Cashing Out

A German government agency appears to have transferred $425M in Bitcoin to a new wallet. $64M was later deposited on exchanges, presumably for sale, with the rest transferred back to its starting place. A further $130 seems to have now gone to “service wallets” according to Arkham intelligence, which indicates an intention to sell. The Bitcoin was part of a seizure from a 2013-era movie piracy website, currently worth a little over $3B. 

2. Shkreli Doubles Down on DJT

The DJT sage continued with Martin Shkeli claiming the Trumpcoin is real across a multi-hour Twitter spaces. The story according to Shkreli is that he assisted Barron Trump to launch the token, but that the Trump heir holds the private keys. Throughout the spaces Shkreli referenced lawyers advising Barron against affiliating himself with the token. Shkreli’s story was heavy with claims but light on evidence. He seems to think there’s no law against promoting a memecoin. 

1. Certik “tests” $3M exploit

Security firm Certik pulled off a $3M exploit of a bug in Kraken’s platform. The bug allowed accounts to be credited before a crypto deposit arrived, allowing a user to ‘print’ tokens on the platform that could be withdrawn. Certik demonstrated this with a $4 account before “testing” the exploit at $3M. They initially refused to return the money under the terms of Kraken’s bug bounty program. Kraken calls it “extortion”, Certik thinks they were just doing white-hat hacking.