OKEx Sees Biggest Bitcoin Outflow for 6 Months Soon After Resuming Withdrawals
Cryptocurrency exchange OKEx recorded a major bitcoin outflow just minutes after it lifted a five-week-long withdrawal suspension at 08:00 UTC Thursday.
About 2,822 bitcoins were moved from OKEx in block number 658,728 mined at 08:12 UTC. That’s the biggest single-block outflow since May 2019, according to blockchain analytics firm CryptoQuant.
Of the 2,822 coins withdrawn, 456 were transferred to cryptocurrency exchange Binance and more than 400 were moved to other exchanges. Meanwhile, 54 accounts or addresses took direct custody of some coins.
OKEx halted withdrawals indefinitely on Oct. 16 after one of the exchange’s key holders went “out of touch” with the exchange because they were held by authorities to “assist an investigation.”
Some analysts have associated bitcoin’s recent meteoric rise to 35-month highs above $19,000 with a supply shortage in part due to OKEx’s suspension of crypto withdrawals. That’s because the price rally began after OKEX’s decision dated Oct. 16.
Bitcoin plunged nearly $3,000 on Thursday, soon before OKEx was due to restart withdrawals. It’s also not clear if the two events may be linked.
VanEck Launches Bitcoin Exchange-Traded Note on Deutsche Boerse
VanEck, the New York-based investment management firm with around $50 billion in AUM, has launched a bitcoin exchange-traded-note (ETN) that for trading on the Deutsche Boerse Xetra.
Listed on the Frankfurt, Germany-based trading venue Wednesday, the VanEck Vectors Bitcoin ETN (VBTC) is physically backed by bitcoin and tracks the MVIS CryptoCompare Bitcoin VWAP Close index.
“Bringing to market a physical, fully-backed major exchange-listed bitcoin ETP was a top priority of our firm,” Gabor Gurbacs, director of digital-asset strategy at VanEck, said. “We hope to serve many clients and partners in Europe, Asia, and across the world using our innovative, investment-friendly, and regulatory-conscious access vehicles.”
An ETN is a type of unsecured debt security payable to the bearer that tracks an underlying asset or an index. In effect, they mean, investors can gain exposure to an asset class without owning it.
VanEck has partnered with Liechtenstein-based crypto custodian Bank Frick for secure bitcoin storage services. The total cost associated with managing and operating the instrument, or the total expense ratio, is 2%. The investment product is currently limited to investors from Germany, the Netherlands and the U.K.
There are now three bitcoin ETNs listed on Xetra. ETC Group was first listed in late June, followed by crypto ETP issuer 21Shares in July.
The firm’s decision to launch an ETN comes after several failed attempts to win approval for an exchange-traded fund, or ETF, from the U.S. Securities and Exchange Commission.
‘Bypass’ Attack in Coldcard Bitcoin Wallet Could Trick Users Into Sending Incorrect Funds
The bitcoin-only hardware wallet Coldcard has released a beta firmware patch for a vulnerability that also affected a competitor hardware wallet earlier this year.
Ben Ma, a security researcher who works for hardware wallet manufacturer Shift Crypto, discovered that the Coldcard hardware wallet has a flaw: An attacker could trick a Coldcard user into sending a real bitcoin transaction when they think they are sending a “testnet” transaction – or a payment on Bitcoin’s testing network, which is not the same as the mainnet.
Both testnet and mainnet bitcoin transactions, though, “have the exact same transaction representation under the hood,” Ma writes in his post disclosing the vulnerability. An attacker, then, could generate a bitcoin mainnet transaction for the hardware wallet but make it look like a testnet transaction. The mainnet transaction is presented like a testnet transaction on the user’s wallet, making it difficult for users to recognize the error.
Ma learned of the vulnerability after a pseudonymous researcher discovered the so-called “isolation bypass” attack in the French-manufactured Ledger hardware wallet.
Unlike Coldcard, Ledger supports many coins, so the bypass attack could work by tricking wallet users into sending bitcoin when they mean to send litecoin and bitcoin cash, in addition to testnet BTC.
When the initial vulnerability in the Ledger wallet was disclosed, Coinkite founder and Coldcard creator Rodolfo Novak said, “Coldcard doesn’t support any shitcoins, we find that to be the best path,” implying that his bitcoin-only wallet would be safe since the flaw (in part) resulted from the fact that Ledger devices previously managed different coins using the same private key.
Since Coldcard doesn’t support multiple coins, it theoretically shouldn’t have this problem. And it wouldn’t, if it weren’t for the fact that it can be exploited with bitcoin testnet addresses, as well.
If a user’s computer is compromised – and their Coldcard device is unlocked and connected to that computer – then an adversary could trick them into sending real bitcoin when they think they are sending testnet bitcoin.
“The attacker merely has to convince the user to e.g. ‘try a testnet transaction’ or to buy an ICO with testnet coins (I’ve heard there was a ICO like this recently) or any number of social engineering attacks to make the user perform a testnet transaction. After the user confirms a testnet transaction, the attacker receives mainnet bitcoin in the same amount,” Ma writes in the post.
Seeing as an attacker could execute this attack remotely, it met Shift Crypto’s criteria as a critical issue, triggering the responsible disclosure process.
According to the post, Ma disclosed the vulnerability to Coinkite on Aug. 4 and Novak acknowledged it the next day. On Nov. 23, Coldcard released a beta firmware to patch the vulnerability.
Bitcoin Options Market Suggests Investors Preparing for All-Time High
Activity in bitcoin’s options market shows investors are eyeing more gains for the top cryptocurrency, which is now just 2.8% below a record high.
Bitcoin‘s one-month implied volatility, which is influenced by demand for call (bullish) and put (bearish) options, has risen to 81%, the highest level since May, having begun the month at 58%, according to data source Skew.
The major part of the move (from 60% to 81%) occurred over the past five days. The three-and six-month implied volatility metrics have also jumped to multi-month highs.
Further, put-call skews, which measure the spread between the cost of puts and calls, are hovering near record lows. In other words, call options have been drawing more robust demand than puts, a sign of investor expectations being skewed to the bullish side.
A week ago, the skews witnessed a bounce from lifetime lows, as some traders bought put options following bitcoin’s sudden pullback from $18,400 to $17,100.
However, the price dip was short-lived, and the cryptocurrency rose above $19,000 on Tuesday. As such, call buying continued, pushing the skews lower once more.
At press time, the one-month metric is seen at 24%, having reached a low of 27.8% on Nov. 17.
On-chain data also favors an extension of the ongoing bull run. For instance, bitcoin’s trade intensity, which measures the number of times each coin deposited on a spot exchange is traded, rose to 7.28 on Tuesday, the highest level since June 7, according to Chainalysis.
The metric shows demand is still strong, and suggests the market could absorb a potential rise in supply. However, holding sentiment remains strong, as evidenced by the continued decline in the number of coins held on exchanges.
Some investors, though, may look to take profits if and when the cryptocurrency scales the $20,000 mark.
“We could see massive movements in the bitcoin price over Thanksgiving,” said Peter Smith, co-founder and CEO of Blockchain.com in an emailed statement. “A new all-time-high won’t be a surprise to some who’ve seen it as a ‘not if, but when’ scenario. It’s an inevitability, but the world will take notice, and that’s good for adoption.”