Share this article

Crypto Markets Today: Bitcoin Dips Below $23K Ahead of Fed’s Meeting

Also: The Sandbox’s SAND token surges ahead of its token unlock. Equities close lower.

Updated Jan 31, 2023, 2:46 p.m. Published Jan 30, 2023, 10:26 p.m.

Latest Prices

CoinDesk Market Index (CMI) 1,065.79 −55.7 ▼ 5.0% Bitcoin BTC$92,527.70 $22,722 −1078.0 ▼ 4.5% Ethereum ETH$3,318.36 $1,555 −89.5 ▼ 5.4% S&P 500 daily close 4,017.77 −52.8 ▼ 1.3% Gold $1,923 −6.1 ▼ 0.3% Treasury Yield 10 Years 3.55% ▲ 0.0 BTC/ETH prices per CoinDesk Indices; gold is COMEX spot price. Prices as of about 4 p.m. ET

Bitcoin (BTC): The largest cryptocurrency by market value was recently trading at about $22,700, down more than 4% over the past 24 hours and well off its high Sunday near $24,000. Bitcoin-related funds dominated last week's digital-asset investment products inflows, accounting for almost all of the $117 million coming in.

STORY CONTINUES BELOW

Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters

By signing up, you will receive emails about CoinDesk products and you agree to our terms of use and privacy policy.

Equities closed lower as traders awaited the Federal Reserve’s decision on interest rates Wednesday and studied a flurry of fourth-quarter earnings reports from big techs including Apple and Meta. The tech-heavy Nasdaq Composite closed down 1.9%, while the S&P 500 and the Dow Jones Industrial Average (DJIA) fell 1.3% and 0.7%, respectively.

Want to receive our daily markets updates in your email inbox everyday? Subscribe to our First Mover newsletter here.

Top Story

A co-founder of LayerZero, which provides services to help blockchains bridge digital assets between each other, is denying accusations from a competitor that it covered up the existence of a critical “backdoor” vulnerability in its code, as CoinDesk's Sam Kessler reported.

James Prestwich, founder of the cross-chain bridging service Nomad, alleged in a blog post on Monday that LayerZero can bypass security controls to pass data between blockchains without anyone’s permission.
“A trusted-party vulnerability (also called a ’backdoor’) is an undisclosed capability of a trusted party that can compromise the function of the system,” Prestwich explained in a tweet outlining his findings. According to Prestwich, LayerZero has the ability to unilaterally steal or move around funds locked up with platforms that use its bridging services with default settings.
Bryan Pellegrino, a co-founder of LayerZero, said the project does have backdoor-like capabilities but denied the platform has ever tried to hide them. Pellegrino said LayerZero was open about its security practices and gave the developers the ability to set parameters barring LayerZero from special access privileges.
“What they have wrong is that every application has the ability to just select their own security properties,” Pellegrino told CoinDesk. “All you have to do is set your configuration and there's nothing that anybody can ever do,” he continued. “James knows that describing anything as a critical security vulnerability is insane.”
Pellegrino suggested Prestwich’s motives may be tied to an upcoming Uniswap governance vote to pick a bridge provider.

Token Roundup

Ether (ETH): ETH was trading down 5% at about $1,560. The ether-bitcoin ratio, or ETH/BTC, is on track to post its second straight monthly decline.

The Sandbox (SAND): Virtual world The Sandbox’s native token saw a surge in price over the month ahead of its token unlock scheduled for Feb. 14. SAND was recently trading down 11% to $.71 cents Monday, but is up 86% this year so far.

Dogecoin (DOGE): Dogecoin spiked to its 24-hour high Monday to trade at 9 cents after a report from Financial Times said Elon Musk wants Twitter payments system to accommodate crypto. The meme token was recently changing hands at 8 cents, down 2% from Sunday, same time.

Crypto Market Analysis: 'Whale' Deposits on Exchanges Surpass Withdrawals

By Glenn Williams Jr.

Per on-chain intelligence firm Glassnode, the net volume of BTC from wallets to exchanges has been increasing since Jan. 22. The movement of coins onto exchanges is often a bearish signal reflecting investors intent to sell assets.

To be sure, the number of whale, or large bitcoin holder, deposits to exchanges has declined in recent weeks, which in isolation is bullish. But the volume of deposits to exchanges exceeds the number of withdrawals on a relative basis, which is not. The withdrawal of assets from exchanges is generally a bullish signal.

Historically, the net volume metric tends to move in waves. Although the current development does not guarantee a selling spree, it may foreshadow what larger investors will do. A prolonged movement of bitcoin to exchanges would signal that larger holders are preparing to sell, which could lead to a price drop. The movement is in early stages, though.