Today Bitcoin and ether sink more than 5% to kickoff the month of August Coinbase's David dang explains what's Driving crypto's sell-off and Valerie Kennedy of chainalysis breaks down a new Report on malign interference in Crypto welcome to cnbc's crypto world I'm TAA mckel cryptocurrencies tracking Lower alongside a broad selloff on Wall Street by noon Eastern Bitcoin tumbled More than 5% to the $62,000 level ether Dropped more than 5.5% now down to the $3,100 level and xrp sank more than 9% To 59 that drop from Ripple's token Comes despite an announcement from The Issuer Today the tokenization platform Open Eden will bring tokenized treasury Bills to The xrp Ledger taking a look at Bitcoin miners all are in the red as of Around 12:30 with Riot falling more than 2% after disappointing Q2 results the Bitcoin minor reported second quarter Earnings yesterday showing losses Widened to more than $84 million as Costs surged of course the Bitcoin Having took place in April when the Reward for mining was cut in half and That added pressure on Miners okay sticking with markets I Spoke with David dang head of Institutional research at coinbase about What we can expect as the new month Kicks off all right David thank you so Much for joining us today uh we are
Kicking off what is typically kind of a Sleepy trading month not just for bit Bit coin but for risk assets more Broadly um if we could look back at July For a little bit it did finish well um You know of course the month before that Not so great but what what did you make Of the trading month for July what were Some of your key takeaways um especially You know takeaways that we'll be Bringing through into August with us Yeah I think July was really focused on The supply overhangs in this market and We saw with Bitcoin in particular for Example the German government selling Bitcoin in a rather indiscriminate way Which I think kind of created some Volatility for Market players who didn't Know how to really respond to that but We also had Mount gaau uh selling that Really initiated in early July uh We've Now seen that around 40% of that has uh At least gone to the exchanges we don't Have a lot of transparency on if anyone Is actually selling that away uh but I Think that some of those willly Overhangs as we get into the uh Beginning of August have started to Abate uh we had the FED meeting Yesterday uh I and I think it went Exactly as most people expected it what Was your reaction to that and what does That tell you about um where things are Headed in the next few weeks yeah you
Know it's interesting because I think Macro has had less of an influence over Crypto prices very recently it's still Relevant however um and you know we've Kind of made this point in the past but The FED uh decision doesn't exist uh in A vacuum which is to say that uh you Know an ideal situation rate Cuts would Unlock liquidity and be very supportive For long duration assets like crypto uh But it also depends on how is the Economy doing at the moment and if the Perception is that the economy is Weakening for example if we were headed Into recession which I don't think we Are but if we were I think that that Would keep retail customers uh from from Perhaps deploying more Capital here than They would otherwise so I think that That's what's relevant here it's not Just what the FED decision is but are is The economy doing well and I think that Uh some of the data that we got today For example seem to suggest that it's More likely that we could see a downturn Now I think that we've already seen the Economy Peak and so I'm more optimistic That when the FED starts cutting rates Beginning in September that that's going To be very supportive uh for crypto uh But I think that there's a very large uh Gap between what people think is going To happen Here ETFs another key theme so we saw
Eth ETFs in July uh tell me about what That looked like to you in terms of the Market reaction compared to what it Looked like when we got Bitcoin ETFs in January and how you expect that to Change over August and in the second Half of the year yeah I think a really Good point to mention about the eth ETFs Is that the conditions in which the e ETF launch are different from the ones That we saw with Bitcoin and you know That sounds uh like you know super Sensible obviously but uh you know we've Saw that even within how the ETFs for Eth were launched compared to bitcoin There are a lot of small differences Here for example uh the outflows coming From grayscales ethe I think have been Front loaded compared to what we saw With the Bitcoin e I'm sorry the Bitcoin ETF launch uh predominantly because and In the case of Bitcoin we saw that there Were some several large entities who Were restricted from selling uh their Gbtc shares until they were approved by The courts um that's not that's not the Case with eth there are fewer entities Who actually have those same Circumstances so they were not blocked From selling it uh early on so I think That's one thing that we're we're Getting PR shares uh got their ETF Application approved but they didn't get To launch and they're one of the largest
Holders uh in terms of people who hold Their Futures e uh ETF so that Transition away from Futures in spot Also like didn't necessarily happen in The same way it did with Bitcoin so I Think that there are those kinds of Small nuances that people aren't Considering uh 21 shares and arkc for Example like like 21 shares went on this Eth ETF alone so you know like Arc for Example included their Bitcoin ETF Inside of many of their other funds that Didn't necessarily happen with the eth ETF um I do think that once you see see A lot of those issues kind of clear up Like actually eth looks very attractive As far as like it's a its performance Over the last week and B uh what I would Suspect the flows are going to look like In the weeks ahead you know between now And the election it does kind of feel Like all of the you know big overtures Are kind of behind us now um and that The focus is a little bit more on Legislation which you know nothing may Happen there in an election year so Politics and the election as a catalyst For the crypto Market how much weight do You give that right now yeah we actually Wrote a report where we were kind of Break down a lot of the driving factors Over the first half of 2024 and one of The omissions we had was politics Because we do suspect that the US
Elections are going to be a major factor For crypto performance in the second Half of the year we just didn't know That it was going to happen so soon um And there are a lot of reasons for that Which you've kind already enumerated uh But you know I would suspect that now That crypto is becoming more of a bip Partson issue and we're seeing that it's Not just Trump's and uh Cynthia Lum is Speaking at uh the Bitcoin Nashville Conference for example but it's also the DNC considering putting changing their Stance on crypto and putting something In there uh in their statement about Crypto so we're seeing that on both Sides of the aisle uh you know there is There are a lot of discussions about how Do we approach uh this this topic so I Think that crypto is fast becoming a an Election issue uh which I think is Really good for the space um and I think That we'll probably see over the course Of the second half of the year that It'll remain uh a likely driver for it Now I think it could kind of you know Oscillate back and forth uh that's Really kind of hard to predict because Politics by nature is kind of hard to Predict uh but I do think that for the Most part it's going to be a positive uh For this space All right for our main story chain Analysis released a new report last week
On harmful interference and crypto in The past few years mign foreign State And non-state actors have conducted Systemic influence campaigns to try and Interfere with Democratic processes CH Analysis notes that historically these Activities are most impactful in the Runup to elections with much of the World's population set to hold national Elections this year CH analysis Published the new report which takes a Look at how groups behind malign Interference and misinformation Campaigns fund their operations using Crypto crypto world's Talia Kaplan spoke With Valerie Kennedy the blockchain Analysis firm's director of Investigations about the report's Findings and why the revelations are More important now than ever Before so she analysis published a Comprehensive report last week on how Groups behind malign interference and Disinformation campaigns fund their Operations using crypto I want to start Off by asking what is the role crypto Plays in facilitating these campaigns Around the world your research notes That while the spread of misinformation Is not new government agencies have Observed novel tactics that are being Employed to facilitate these campaigns And after going through your report I Take it these methods involve crypto so
Could you take us through some of those Tactics indeed so just like traditional Finance cryptocurrency is being utilized As a tool in the disinformation Ecosystem so that can look like a number Of things one it can look like Cryptocurrency being utilized to Actually fund disinformation campaigns Whether it's disinformation Outlets Soliciting cryptocurrency donations or Malign actors paying for disinformation Utilizing crypto and the Third Way is Disinformation campaigns paying for Infrastructure utilizing cryptocurrency For some context CH analysis uses Onchain data to trace crypto Transactions to identify fraudulence and Elicit activity involving digital assets So how can Crypt tracing ident ify these Interference networks how do analysts Use crypto transaction tracing to expose And disrupt these efforts that's a great Question so because cryptocurrency is Inherently built on inherently Transparent technology we can actually Turn to that technology to help us Understand these networks better so Blockchain analytics help us helps us Better understand the people places and Things underlying disinformation Outlets So for example we can connect uh Different Outlets that we think might be Connected to one another using Blockchain technology we can see how
These things are being paid for and we Can even understand where these actors Are then going to cash out proceeds so Utilizing blockchain analytics we can Understand these networks in a way we Never were able to Previously so why do you think this kind Of report is important especially now do You think all the elections taking place Around the world this year including the Upcoming presidential election in the US Plays into the report's Importance so certainly because this is The largest election year in a very long Time we wanted to ensure that we're Highlighting the role that Cryptocurrency plays in this type of Election interference I wouldn't say That cryptocurrency is necessarily the Key facilitator Behind these campaigns But it does make it easier cheaper and Faster to pay for this type of activity Just like other emerging Technologies And at on the other hand as I mentioned Previously it also allows us to better Illuminate and understand these Networks so can you take us through some Examples of disinformation campaigns With a crypto Element certainly so a very recent Example was just published by the doj a Few weeks ago and it involved the Takedown of 968 FSB backed X accounts and the role
That crypto played in this is really pay Payments for infrastructure so in order To create these X accounts the FSB was Using cryptocurrency to pay for domains Those domains allowed them to register Email addresses which were then used to Create X accounts so basically Cryptocurrency helped pay for the Underlying infrastructure that helped Facilitate this activity so how can this Issue be resolved what are some of the Solutions chainalysis uncovered and how Is chainalysis helping to investigate This are you potentially working with Government and law enforcement agencies To try and cut down on these potential Misinformation Campaigns so the best way to understand And prevent and disrupt disinformation Campaigns is really shedding light on The fact that they are happening um and Also uh better facilitating their Disruption so that includes the tactics And techniques that are utilized to run These campaigns to include the payments Underlying them and so while I can't Comment on ongoing investigations with Our customers I can say that chainalysis Is taking this very seriously we're Taking a really diligent approach in Helping uncover this type of activity And helping better illuminate it to our Customers and are there any steps that Governments can take to track down this
Kind of activity what would you Recommend and are governments taking Steps already to try and crack down on This kind of Interference yes so as we're seeing this Type of interference increase we're also Seeing seeing governments ramp up their Efforts across different types of Disruption techniques so that can Include counter messaging it can include Better cyber prevention data protection And then of course the other is also Blockchain analytics so understanding How these networks are operating working To disrupt them blockchain analytics Helps us take a better approach to being Able to do That what would you say is the main Takeaway from this report the main take Away from this report is twofold one Cryptocurrency plays a role in Disinformation campaigns and other types Of malign interference worldwide and Similarly because of the inherent Transparent nature of cryptocurrency That also leaves us with a hopeful note So that means that we can better Understand and disrupt these Campaigns okay that's all for crypto World today we'll be back again tomorrow And we'll see you then
