Crypto winter has seen crypto prices fall to new cycle lows
Coinbase CEO Brian Armstrong says its difficult to predict markets, but foresees the crypto market recovery taking a year or more.
Armstrong hints at Coinbase being prepared for the down cycle after going through four such cycles before.
Coinbase CEO Brian Armstrong believes recovery from the crypto bear market will take 12 to 18 months, but emphasised that the downturn as a whole is not a new phenomenon to the industry.
Armstrong was speaking to CNBC’s Kate Rooney in an interview published on Tuesday.
Crypto winter could last 12-18 months
Recent events, including the collapse of multiple crypto companies, means the industry remains in a bear cycle. For Coinbase, the downturn has impacted its shares and company revenue. But Armstrong is bullish on the sector and for the crypto exchange.
“Obviously we are in a bit of a down cycle here, but it’s nothing unusual for us,” he told Rooney, noting that what’s happening is what Coinbase has gone through before.
According to him, the company has seen four such down cycles in the past 10 years since its launch, with 2022 only different in the sense that the downturn has coincided with “the broader micro environment.”
The past few months have seen crypto markets brutalised, with leading cryptocurrency Bitcoin falling from its perch above $69,000 in November to below the previous bull market cycle high of $20,000.
The broader crypto market, with Ethereum also losing most of the bull cycle gains, saw over $2 trillion in market cap value wiped off.
On how long he sees the down cycle lasting, he says it’s likely to be 12 to 18 months. However, although he foresees a recovery within this period, he warns that the market might have to “plan for it being longer than that.”
“That’s how we think about it, and we don’t try to get too cute predicting the future,” he added.
He also talked about his company’s plans to cut costs, further measures to the layoffs it undertook in June. As for shifting from dependence on trading fees, the company is looking to build its business around more subscription and service-based revenue generation.
The key is to have up to 50% of the revenue come from the above models, he said.
So while BTC price could scrap some upward moves and see a break above the $22k level and bring some relief likely to push prices even higher, buyers might struggle to push past key resistance in the $25k region.
Why Bitcoin might see further accumulation this week
According to on-chain data analysis platform Glassnode, BTC/USD is below the realized price after 23 consecutive days above it. The sell-off seen this past week underpins the weakness across the markets, with risk-on appetite also off in equities.
Also noticeable has been the lack of new money coming into the sector, with the recent upside not attracting a new wave of retail investors. These factors point to ranged movement for Bitcoin.
“The recent price uptrend also failed to attract a significant wave of new active users, which is particularly noticeable amongst retail investors and speculators. The monthly momentum of exchange flows is also not suggesting a new wave of investors entering the market, implying a relatively lackluster influx of capital,” the firm noted in its latest weekly update.
If price remains below the cost basis, Glassnode says we could see more accumulation.
“During the 2018-2019 bear market, prices fluctuated below the Realized Price for 140 days, making the prevailing bear market duration of 36 days relatively brief, and thus indicating more accumulation time may be required,” analysts at the firm wrote in the newsletter.
US Congressman Tom Emmer (R-MN) wants answers from the Treasury Department over the sanctions the agency imposed on Tornado Cash.
In a letter addressed to Treasury’s Janet Yellen on Tuesday, Rep. Emmer highlighted his take on the sanctions, noting the implication of the US government’s move to national security as well as individuals’ privacy rights.
According to Rep. Emmer, while the Office of Foreign Assets Control (OFAC)’s sanctions target illicit funds linked to crypto heists and other cyberattacks, they were however unique in that the agency did not levy them “against a person or an entity, but against ‘privacy-enabling’ code.”
The sanctions are thus against “a neutral, open-source, decentralised technology,” which raised a lot of questions that the Treasury needs to clarify, he noted.
Emmer wants the US Treasury to explain whether OFAC’s sanctions undertook that the banned Tornado Cash addresses indeed belong to individuals. He also seeks clarification on exactly who or what entity the agency believes controls the mixing service’s smart contracts.
Also on his list of questions is the recourse for users whose funds are locked, as well as those who might receive unsolicited money from the blacklisted addresses.
OFAC sanctioned Tornado Cash, a decentralised transaction anonymising platform, early this month over claims it had enabled multiple money laundering transactions involving North Korea-linked hackers.
The blacklisting has forced several crypto platforms to stop Tornado Cash functionality on their sites, and seen wider outcry over the same across the crypto space following the arrest of a developer in the Netherlands.
This year has been brutal thus far in the cryptocurrency markets. Among the bearish developments has been a bunch of centralised entities filing for bankruptcy, the most high-profile of whom was Celsius.
Against this backdrop, the mantra of “not your keys, not your coins” rings truer than ever. As contagion ripples across the industry, there is only one way you can be absolutely sure that your Bitcoin (and other cryptocurrencies) is safe. And that is cold storage – something I warned about the day the UST peg began to slip.
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A few months down the line, we are not out of the woods yet, despite the initial wave of bankruptcies now in the rear mirror – including Celsius, Voyager Digital, Three Arrows Capital.
Today, I write a review of the BitBox02 hardware wallet. Aiming to make it as simple as possible, this will be an objective review of the wallet outlining its pros and cons.
Details and unboxing
Made by Shift Crypto, which is based in Switzerland, the BitBox02 wallet retails for $128. The version I am trying out allows storage of several assets, including Bitcoin, Litecoin, Ethereum and ERC-20 tokens. However, for you Bitcoin maxis out there getting sweaty palms just reading the word “Ethereum”, there is a Bitcoin-only version also produced. It retails for the same price of $128.
In the box are several additives. Firstly, the wallet comes with a USB-C to USB-A adapter, so no issues if your laptop is too old for the now-ubiquitous USB-C slots. It also comes with an extension wire, allowing you to plug the device into your laptop while holding it in your hand, connected to the laptop via the cable. This is far from necessary, but a nice option.
Finally, there is a clasp that allows you to hook your device onto a keyring, belt or whatever else you want. There is also a microSD card in addition to the hardware wallet itself.
Then, I inputted the microSD backup card into the device. The point of the microSD card is to backup your wallet in case of loss or damage. There is also an excellent but simple feature to set a universal 2FA option, a neat bit of security.
On the app screen, I hit “Install Firmware”. Also, a nice touch – you can hit “flip screen” on and it flips the screen around on the wallet, making it easier to read (I only have a USB-C slot on one side of my laptop). Next, you verify that the code on your BitBox matches the one on your laptop screen.
I hit “Create wallet”.
I’m required to type in a password. To do this, you use invisible touch sensors on each side of the device. This is a really cool feature, and probably the standout one of the wallet. You can touch, swipe and hold the sensors to carry out all actions on the device. It adds a nice futuristic feel to the whole thing.
In setting the password, it does take a bit of time to work the sensors as you need to click each button several times. So, there was a fair bit of poking around and it’s quite tedious. Nevertheless, the process is intuitive and gets easier once you are used to the settings. Other than the password – which is manageable – the sensors work really well.
Using the device
The options on the app are great. I can set a 2FA, manage my backups, see my wallet balances, look at my transactions – all the basics, in other words. It’s minimalistic and easy to navigate, which for a wallet is all I really need – I don’t need my cold storage wallet to have a glistening interface on par with the best-built websites on the Internet.
Next, I send some Bitcoin to my the device, scanning the QR code easily on the app. Unfortunately for me, it’s the Bitcoin I had left over from my recent trip to El Salvador – I was perhaps too ambitious with my expectations of how many merchants would accept Bitcoin there – but I can’t really blame BitBox for that, can I? So across goes my $360 in Bitcoin into the hardware wallet.
Once there, I send it back out of the device, just so I can tell my dear readers what it’s like to withdraw, too (the things I do for you!). And well, it’s…easy. There isn’t much to say. You type in the transaction and then via the touch sensors on the device you hold the (invisible) buttons to sign the transaction.
That’s kind of all there is to it.
Pros
Nice screen makes it very easy to use
Comes with USB-C, USB-A adaptability
Comes with a backup memory card
Excellent 2FA options
App provides all you need to know to get set up easily, even for crypto noobies
Cons
Far from a dealbreaker but setting the password is a little tedious on the touch sensors
Verdict
The BitBox02 doesn’t do much, but it does everything it should. It stores your Bitcoin well. It’s simple to set up, even for those with no prior knowledge (I tested this with my friend, who said the start-up guide was excellent).
Signing transactions couldn’t be easier. The backup option in the microSD card (which is totally optional) is great, too. And the 2FA option is something I love.
To wrap things up, at a $128 price point this wallet does exactly what it needs to and I really can’t think of anything to put people off buying it. In the current climate, it’s vital to take ownership of your coins if you intend to hold either for a long period of time or possess a significant quantity. Against the myriad potential downfalls of not storing your coins cold, a $128 investment and 10 minutes of your time to set it up are drops in the ocean.
Sure, if you only hold a small amount or don’t expect to hang on to your crypto long, the safer exchanges are fine. But otherwise, cold storage is just safer, easier and more sensible. The BitBox02 is built for exactly that – and it delivers.
Finally, it’s open-source, which is cool. And shout out to whoever decided to include stickers in the box!
I’m required to type in a password. To do this, you use invisible touch sensors on each side of the device. This is a really cool feature, and probably the standout one of the wallet. You can touch, swipe and hold the sensors to carry out all actions on the device. It adds a nice futuristic feel to the whole thing.
