Bulls Are Back In Town: Bitcoin Bounces Back From ETF Slump to Regain Over 4%

Avi Rosten

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Bitcoin (BTC) has had a turbulent day.

Dropping over 5% in price this morning to fall below the $8,000 level -  it seems that the slump was prompted by the SEC’s (US Securities and Exchange Commission) rejection of the Winklevoss twins’ bitcoin ETF application for the second time.

The cryptocurrency however, has almost completely bounced back to its former heights at the time of writing – regaining over 4% to approach the $8,200 mark - as the title chart from CryptoCompare shows.

All About ETFs

With many suspecting that the current mini-bull run is largely motivated by anticipation surrounding the SEC’s proposals from VanEck and SolidX – it is likely that investors took the rejection of the Winklevoss’ ETF has a bad sign ahead of the SEC’s decision – expected in mid-August.

While there are numerous other bitcoin-related ETF proposals currently lodged with the SEC, those of VanEck and SolidX have generated by far the most attention – with several hundred comments submitted regarding the proposals on the SEC website.

For comparison, the proposals filed by Boston-based ETF provider Direxion Investments at the time of writing have prompted only three comments.

With bitcoin in the latter half of July bucking the generally bearish trend, investors will be encouraged by the resilience shown in the face of ostensibly bad news. A truer test of market sentiment however, will likely emerge when the SEC’s decision on the more hotly-anticipated bitcoin ETFs arrives.

Burn Satoshi's Bitcoin, Suggests Paxful CEO in Thought Experiment

John Moore
  • Paxful CEO Ray Youssef proposes 'burning' the stash of Bitcoin alleged to belong to Satoshi Nakamoto
  • Bitcoin creator said to hold up to 980,000BTC in dormant wallets, theoretically worth US$10 billion
  • Without complete consensus on the move,  burning the coins would cause another Bitcoin fork

One member of the global cryptocurrency community has come up with what can best be described as a scorched earth policy for settling the debate over who is Satoshi Nakamoto once and for all. 

With the spotlights of Bitcoin watchers firmly on the latest questionable claim to be the creator of cryptocurrency as we know it, Ray Youssef - CEO and co-founder of crypto marketplace and wallet service, Paxful - in a now-deleted Tweet - took to Twitter to propose a Bitcoin soft fork that would 'burn' the BTC its  pseudonymous developer is thought to hold in wallets that have never been active.

His suggestion was ignored by a group of crypto-luminaries who he tagged for support, and apparently rounded on by commenters. 

Blockchain analysis undertaken in 2013 by Security Researcher and Bitcoin Blogger, Sergio Demain Lerner , alleged that Nakamoto may have amassed something like 980,000 bitcoin as a lone miner in the early days of its existence. When the BitMEX exchange team revisited Lerner's work a year ago, they reduced this estimate to 700,000 - but didn't rule out the possibility that the figure could be much higher.

Thus, the cryptocurrency the creator fo bitcoin likely accumulated between Jan and August 2009 (or late-Jan 2010, depending on whose opinion you listen to) could, theoretically, be worth something in the region of $10 billion at the current market rate.

A more realistic assessment of their value, however, centers on the idea  that - as they are sitting in the most closely watched wallets on the crypto scene - any attempt to move or sell them would cause massive upheaval in the global cryptocurrency markets, crash the BTC price and gut their value before a significant amount could even make it to a hot wallet somewhere. 

This scenario has been a sword of Damocles threatening Bitcoin since the Satoshi's Stash theories first appeared amid early interest in the concept, explaining the appeal of simply removing control of the coins from their owner - especially to someone with a vested interest in Bitcoin's value. However, Youssef's suggestion that such a measure would 'smoke out' Nakamoto's real life persona, was obviously considered to be ethically outrageous by some and a logistical nightmare by almost everyone. 

It's not that it isn't technically possible. It is. However, unless it had the consensus of the entire Bitcoin network (saying it wouldn't is a pretty safe bet), the fork would create two blockchains and a 'Schroedinger's Nakamoto' - where Satoshi was very rich on one, but not on the other. 

Let it not be forgotten that a similar schism led to a fork in the Ethereum blockchain following The DAO hack a few years back, a split that we have to thank for the existence of Ethereum Classic, which stuck with the pre-DAO blockchain. Let it also not be forgotten that recent Bitcoin forks have not worked out so well for most of the parties involved. Let it also not be forgotten that Nakamoto is considered with almost deity like reverence by some crypto-evangelists. All in all, it seems Youssef is now regretting making the suggestion

So, while Youssef's suggestion could well have been a way to get the real Satoshi Nakamoto to please stand up, it would likely have done much more damage than good.