A cryptocurrency trader has realized a profit of nearly $16 million by capitalizing on Ether’s (ETH) recent price decline. The trader established a 50x leveraged short position when ETH was valued at $3,388, with a liquidation threshold set at $4,645, according to data from Hypurrscan.
In addition to the unrealized profit, the trader accrued approximately $2.3 million in funding fees from the leveraged position. While leveraged trading can amplify potential gains, it also significantly increases the risk of substantial losses. A case in point is a pseudonymous trader who, in January 2024, lost over $161,000 in a single trade due to liquidation on a leveraged position, underscoring the inherent risks associated with such strategies.
As of February 2, Ether’s price had declined by more than 4% over a 24-hour period, trading at $3,107. The cryptocurrency reached a daily low of $3,068 but managed to stay above the critical $3,000 psychological threshold, as reported by Cointelegraph Markets Pro.
To reverse its six-week downward trend, Ethereum may need to bolster fundamental blockchain activity. Aurelie Barthere, principal research analyst at Nansen, noted, “Other layer-1s are catching up with Ethereum regarding apps, use cases, fees and amount staked.” Barthere suggested that increased collaboration with both private and public sector entities, especially in the United States amid recent regulatory developments favoring blockchain and cryptocurrency, could be beneficial for Ethereum.
For a potential reversal toward the $4,000 mark, Ether would need to reclaim the $3,400 level, according to crypto trader Cas Abbé. However, significant resistance is anticipated at $3,240. Surpassing this level could trigger over $1 billion in cumulative leveraged short liquidations, as indicated by data from CoinGlass.
These developments highlight the volatile nature of cryptocurrency markets and the substantial risks and rewards associated with leveraged trading strategies.
Bitcoin’s price has recently dipped below the $100,000 mark, a level it had maintained since January 27. This decline is attributed to rising inflation concerns following the imposition of import tariffs by President Donald Trump on goods from China, Canada, and Mexico.
Ryan Lee, chief analyst at Bitget Research, suggests that this downturn might precede a more significant correction, potentially bringing Bitcoin’s value down to $95,000. He stated, “On the downside, the $95,000 range remains a critical support area. The interplay between labor market trends, Fed policy expectations, and market sentiment will be the main catalysts to monitor in the coming weeks.”
The upcoming U.S. labor market report, scheduled for release on February 7 by the Bureau of Labor Statistics, is anticipated to play a pivotal role in Bitcoin’s near-term trajectory. Lee noted that weakening labor market data could bolster the case for a Federal Reserve rate cut, potentially creating a “more supportive environment for Bitcoin.”
Despite the recent dip, Bitcoin achieved a historic milestone by closing January above $102,000, marking its first monthly close above the $100,000 threshold. This represents a more than 6% increase from its previous record monthly close of $96,441 in November 2024.
Some market analysts interpret the current downturn as a potential “bear trap,” a scenario where a temporary decline in an asset’s price during a long-term uptrend leads investors to mistakenly believe a bear market has begun. This perspective suggests that the recent correction could be a coordinated effort to induce selling before a subsequent price increase.
Looking ahead, Bitcoin’s prospects for 2025 remain optimistic. The recent surpassing of a $125 billion milestone by spot Bitcoin exchange-traded funds (ETFs) in the U.S., just over a year after their debut in January 2024, underscores growing institutional interest. Analyst forecasts for Bitcoin’s value by the end of 2025 range from $160,000 to over $180,000.
In summary, while Bitcoin faces short-term challenges influenced by macroeconomic factors and market dynamics, its long-term outlook remains positive, supported by increasing institutional adoption and favorable market sentiment.
In a recent development, India’s Finance Minister, Nirmala Sitharaman, announced that cryptocurrencies will now be included under Section 158B of the Income Tax Act, which addresses undisclosed income. This move subjects unreported crypto gains to block assessments, aligning them with the tax treatment of traditional assets such as money, jewelry, and bullion.
The amendment defines crypto assets under the existing category of Virtual Digital Assets (VDAs). As per the new guidelines, a reporting entity, as prescribed under section 285BAA of the Act, is required to furnish information on crypto assets.
Notably, the new crypto tax provisions will be retrospectively applicable from February 1, 2025.
This announcement follows a report from December 2024, where India’s Minister of State for Finance, Pankaj Chaudhary, revealed that the government had identified unpaid goods and services taxes (GST) totaling 824 crore Indian rupees (approximately $97 million) from several crypto exchanges.
In a related context, Indian authorities may impose a tax penalty of up to 70% on previously undisclosed crypto profits. This penalty applies to crypto gains that remained undisclosed for up to 48 months after the relevant tax assessment year. The document specifies a penalty of “70% of the aggregate of tax and interest payable on additional income disclosed in the updated income tax return [ITR].”
These developments come shortly after the Bybit exchange suspended its services in India on January 10, citing regulatory pressures as it seeks a full operational license from India’s Financial Intelligence Unit.
Globally, crypto tax regulations are gaining prominence. In June 2024, the U.S. Internal Revenue Service (IRS) issued new regulations subjecting crypto transactions to third-party tax reporting requirements for the first time. Starting in 2025, centralized crypto exchanges and other brokers in the U.S. will begin reporting sales and exchanges of digital assets, including cryptocurrencies.
These measures reflect a growing international trend toward stricter regulation and taxation of cryptocurrency transactions.
LayerZero Labs, a cross-chain protocol firm, has reached a settlement with the FTX estate concerning transactions from 2022 involving Alameda Ventures, the venture capital arm of Alameda Research. In a January 31 post on X (formerly Twitter), LayerZero co-founder and CEO Bryan Pellegrino announced that after incurring “millions in legal fees” and enduring two years of litigation, the company had settled with the FTX estate.
The dispute centered on allegations that LayerZero withdrew funds prior to FTX’s collapse in November 2022 and issues related to an equity stake in the protocol. FTX had been seeking over $21 million from LayerZero in the lawsuit.
Pellegrino stated, “Ultimately we decided this was not us vs FTX which is a fight we feel completely justified in, but it was us vs the creditors (which also we are one of). Original repurchase has been returned to the estate.”
In 2022, Alameda Ventures agreed to acquire approximately a 5% stake in LayerZero, involving transactions where Alameda sent $70 million to LayerZero and purchased $25 million worth of STG tokens. Following FTX’s bankruptcy filing in November 2022, LayerZero sought to repurchase its equity by forgiving a $45 million loan to FTX. However, the FTX estate filed a lawsuit in September 2023, alleging that LayerZero “negotiated a fire-sale transaction” with then-Alameda CEO Caroline Ellison, exploiting the firm’s liquidity crisis.
Court documents also revealed that LayerZero intended to repurchase the STG tokens for $10 million in a separate deal—approximately 40% of their original price. However, Alameda never transferred the tokens, and no funds were exchanged in this regard.
Since declaring bankruptcy in 2022, FTX debtors have initiated multiple lawsuits against crypto companies associated with the defunct exchange, aiming to recover funds. While some cases are ongoing, the estate’s reorganization plan took effect on January 3, allowing many users with claims under $50,000 to be repaid within 60 days.
All criminal cases against FTX executives have concluded, with Ellison, former FTX CEO Sam Bankman-Fried, and former FTX Digital Markets co-CEO Ryan Salame currently serving prison sentences. Bankman-Fried is appealing his conviction and 25-year sentence.
RUNE, the native token of the ThorChain ecosystem, is witnessing a huge sell-off as whales dump their positions amid concerns that the project is insolvent and will be officially declared bankrupt on Monday.
An insider told Crypto Intelligence News on Saturday that ThorChain will declare insolvency on Monday, causing the value of RUNE to crash to $0.00, in a meltdown similar to the Terra-Luna crash.
“Validators have voted to leave the network and insiders and whales are already selling all of their RUNE,” the insider said.
“ThorChain will publicly declare insolvency on Monday, after insiders have finished selling off their positions.”
RUNE is currently trading at around $1.53 per token on Binance, and it is predicted to fall below $0.80 before the end of Saturday.
The token has already plunged by over 20% so far today, as investors dump their positions to avoid losing all of their investment before RUNE becomes worthless.
Why is Rune About to Collapse?
In January, THORChain, a decentralized cross-chain liquidity protocol, faced a significant crisis due to its controversial lending program. The platform had accumulated approximately $200 million in liabilities, primarily in Bitcoin (BTC) and Ethereum (ETH), through its lending and savers programs. This substantial debt raised concerns about the protocol’s solvency, as it lacked sufficient assets to cover these obligations.
To address the mounting insolvency risks, THORChain’s node operators decided to suspend withdrawals from the lending and savers products for 90 days. This pause aimed to stabilize the ecosystem and provide time to develop a restructuring plan.
Despite these measures, the platform’s native token, RUNE, experienced a significant decline, dropping approximately 44% in value within a week. This decline exacerbated concerns about the platform’s financial health and drew parallels to the Terra/Luna collapse of 2022.
The crisis highlighted vulnerabilities in THORChain’s economic model, particularly its reliance on RUNE for its lending mechanism. When loans are repaid, RUNE is minted, which can lead to inflationary pressures, especially if RUNE underperforms against BTC and ETH.
Bitcoin (BTC) has achieved a historic milestone by closing January 31 at $102,400 on Binance, marking its first monthly close above the $100,000 threshold.
This significant close occurred despite a late-month price dip influenced by macroeconomic factors. On January 31, U.S. President Donald Trump announced impending tariffs on Canada, Mexico, and China, effective February 1. This announcement led to a downturn in U.S. stock markets and affected investor sentiment, as indicated by data from the Fear & Greed Index.
Analysts remain optimistic despite these developments. Aksel Kibar, a well-known market analyst, remarked, “At every 1% correction, panic and crash forecasts is not characteristics of a market top. IMO.” He emphasized that true market tops are typically accompanied by widespread euphoria and a disbelief in even short-term corrections.
Michaël van de Poppe, a crypto trader and analyst, shared a similar sentiment, stating, “I shouldn’t worry about this news, ultimately it will lead to higher crypto prices anyways.”
The pseudonymous analyst PlanB highlighted the current phase of Bitcoin’s price cycle by updating the Stock-to-Flow model, indicating that the most intense phase is underway.
Historically, February has been a strong month for Bitcoin, with average gains of 14.4%. If this pattern continues, Bitcoin could see its next monthly close around $117,000. Fedor Matviiv, founder and CEO of CryptoRank, noted, “This time, it’s a post-halving February as well, and every previous one saw major upside. If history is any indication, $BTC might be gearing up for a big move.”
Analyst Rekt Capital added that “8 out of the past 12 February’s dating back to 2013 have produced double-digit upside,” suggesting a favorable outlook for Bitcoin in the coming month.
In summary, Bitcoin’s unprecedented monthly close above $100,000, coupled with historical performance trends, indicates potential for continued growth in the near term.
Ethereum (ETH) has been on a downward trajectory for nearly six weeks, dipping below the $4,000 mark on December 16, 2024. Since then, it has declined over 20%, currently trading at approximately $3,260.
To reverse this trend and approach its previous highs, Ethereum needs to bolster fundamental blockchain activity. Aurelie Barthere, principal research analyst at Nansen, noted, “Other layer-1s are catching up with Ethereum regarding apps, use cases, fees and amount staked.” She emphasized the importance of increased collaboration with both private and public sector entities, especially in the U.S., given recent regulatory momentum favoring blockchain and crypto.
Barthere also highlighted the potential impact of the Elon Musk-led Department of Government Efficiency (DOGE), which has reportedly explored blockchain-based solutions for expense tracking and financial management. Additionally, Joseph Lubin, co-founder of Ethereum and founder of Consensys, suggested that the Trump family might be considering building an Ethereum-based cryptocurrency business, which could further drive adoption.
In the options market, Ether trading volume has surged to its highest levels in over a month, indicating a potential recovery from the recent sell-off. Analysts have observed a growing number of bullish Ether options contracts, suggesting traders are betting on a price rebound. However, for ETH to continue its uptrend, it needs a daily close above $3,400, which would pave the way for a rally towards $4,000. Overcoming the significant resistance at $3,400 could trigger over $1.09 billion worth of cumulative leveraged short liquidations.
Some industry observers anticipate an Ether resurgence in February, driven by continued institutional buying from Trump’s World Liberty Financial protocol.
In summary, for Ethereum to reclaim its previous all-time high, it must enhance blockchain activity, foster new use cases, and strengthen collaborations across various sectors to regain investor confidence.
Creating bridges, developing tokens, and enhancing cross-chain interoperability are monumental operations. They break down the silos between blockchains, enabling asset transfers, increased liquidity, and greater innovation. By building bridges, developers empower users to move assets and data across multiple chains, unlocking new use cases and alleviating onboarding. Token development allows for customized economies with unique incentives, governance structures, and financial models catering to diverse user needs. Cross-chain interoperability fosters more connected blockchain ecosystems, reducing congestion on individual networks and enabling decentralized applications (dApps) to operate across multiple protocols.
LayerZero, a pioneering cross-chain interoperability protocol, is now live on Cronos zkEVM and Cronos EVM. This includes mainnet and testnet networks, Cronos Labs and LayerZero announced. Following the integration, builders will be able to create bridges, develop tokens, and explore a wide range of cross-blockchain applications. When these applications materialize, they will link Cronos users to the aggregated liquidity of blockchains that LayerZero supports. These include Ethereum, Solana, and another 115+ L1 and L2 chains.
This significant milestone is expected to be followed by a series of further integrations, considering that hundreds of apps using LayerZero can now offer Cronos users their services. This will alleviate access to cryptocurrency worth several billions of US dollars, held securely on Cronos.
Users of Cronos EVM, the leading L1 blockchain on the Cosmos SDK, can now transfer their assets between the Cosmos SDK ecosystem, Solana, and numerous other EVM-compatible blockchains with ease. The ecosystem is interoperable with Cronos EVM via the Inter Blockchain Communication (IBC) protocol.
Users will continue to benefit from the native Ethereum bridge, which around a dozen other Elastic Chains share. This is good news for Cronos zkEVM, the first Elastic Chain (L2) whose mainnet will launch after ZKSync Era. These users will also be able to execute quick cross-chain transfers with a large number of L1 and L2 blockchains.
LayerZero Labs CEO Bryan Pellegrino expressed delight at LayerZero’s expansion to Cronos zkEVM in this historic development. He emphasized that connecting different types of blockchains is the essence of interoperability and is excited to see what will follow.
Ken Timsit, Managing Director of Cronos Labs, also underscored the importance of cross-chain interoperability. He pointed out that it has been Cronos’s main priority since its inception. Cronos Labs is working on that priority cautiously yet determinedly in light of the significant liquidity and security challenges of the crypto industry fragmentation. Mr. Timsit anticipates that the integration with LayerZero will enable much greater connectivity between TradFi and crypto projects in 2025.
The cutting-edge functionalities aren’t live for most end users because LayerZero is mainly a developer tool, and further announcements are expected. The official Cronos bridge portals will feature new cross-chain bridging options as third-party links at zkevm.cronos.org/bridge for Cronos zkEVM and cronos.org/bridge for Cronos EVM. These will include token bridging options such as new CRO / zkCRO between Cronos zkEVM and EVM, which will be enhanced in the next few weeks.
In the meantime, Cronos Labs is prepared to support all developers who are interested in exploring the new functionalities. While invigorating, token bridging is not the only use case Cronos Labs wants to develop. The Web3 start-up accelerator is interested in supporting dApps using Layer Zero’s technology to grow tokenization of real-world assets, cross-chain prediction markets and lending protocols, liquid staking and restaking protocols, trading platforms for synthetic assets, and other DeFi applications that can use locked cross-chain collateral. Its ultimate goal is to help build a future where blockchains work together, driving mass adoption and making niches like real-world asset tokenization more efficient and intuitive.
Errol Musk, the father of Elon Musk, is launching his own memecoin project called Musk It (MUSKIT). This new token aims to raise up to $200 million, which will be directed toward supporting the Musk Institute, a for-profit think tank.
However, the token has not gained significant traction since its quiet launch in December 2024, losing over 52% of its value.
Despite the connection to the Musk name, experts such as Anndy Lian believe the project may struggle without Elon’s endorsement, pointing out that it lacks the personal stamp of the more successful Trump family memecoins.
Investors continue to be drawn to memecoins due to their speculative nature, seeing them as “lottery tickets” in the crypto world. Lian suggests that the popularity of such tokens goes beyond the Trump family and reflects a broader desire for high-reward investments in crypto.
Despite their lack of inherent utility, some traders manage to profit from the volatility of these assets. For instance, one trader turned a $27 investment into $52 million by capitalizing on the Pepe memecoin rally, holding the investment for over 600 days.
The continued interest in memecoins indicates a speculative trend in the crypto market, where investors chase after the next big opportunity, hoping for massive returns.
While Errol Musk’s project may struggle without his son’s involvement, it still plays into the broader memecoin craze fueled by high-risk, high-reward potential.
The year 2025 is set to be a pivotal moment for the cryptocurrency industry. Volodymyr Nosov, founder and CEO of WhiteBIT Group, shared his insights and predictions for the evolution of the crypto ecosystem in the coming year.
One of the most significant factors shaping the market will be the widespread legalization and regulation of cryptocurrencies.
“More and more countries will adopt clear legislative frameworks, providing a powerful catalyst for the global expansion of the crypto ecosystem,” Nosov explained. He emphasized that these regulatory advancements will lay the foundation for the industry’s growth in 2025.
Nosov also highlighted the increasing integration of decentralized finance (DeFi) with traditional banking systems, creating new possibilities for lending and insurance.
“Digital assets are becoming more embedded in the real economy. Businesses are already using them as payment methods, and blockchain technology is being applied across various sectors, from logistics to energy,” he noted.
The key technologies driving the industry forward, according to Nosov, include artificial intelligence (AI), GameFi, and metaverses.
“2025 will be defined by a synergy of innovation and regulation. Striking a balance between the two will foster a mature ecosystem, attract more users, and sustain growth,” he predicted.
Institutional interest in cryptocurrencies is also on the rise, and WhiteBIT is actively engaging with this segment.
“We’re observing a steady trend — banks, funds, and large corporations are integrating cryptocurrencies into their portfolios and offering crypto-related services to clients. The demand for instruments like ETFs and derivatives on cryptocurrencies continues to grow,” Nosov observed.
WhiteBIT now serves over 1,300 institutional clients and has significantly expanded its platform’s functionality to cater to this audience. These efforts have already yielded results: in 2024, the trading volume on WhiteBIT exchange reached $2.7 trillion.
From a technological standpoint, Nosov emphasized WhiteBIT’s competitive edge.
“Our platform can process over 700,000 transactions per second, making it one of the fastest in the industry,” he stated.
Looking ahead, WhiteBIT plans to expand its operations in Italy, Croatia, and Kazakhstan starting in early 2025.
“In December, we received VASP (Virtual Asset Service Provider) authorization in these countries, enabling us to deploy our products there. We are forging partnerships and establishing local infrastructure,” Nosov concluded.