Weekly Wrap: Bithumb’s 10% BTC Flash Crash, SBF’s DOJ Claims, & Bear Market Divide

It was another uncomfortable week for crypto markets. Bitcoin slipped deeper into instability, exchange issues rattled traders, and political pressure crept further into stablecoins and centralized platforms. 

At the same time, institutions did what they often do in downturns — buy quietly. Between market errors, courtroom claims, regulatory shifts, and infrastructure launches, this week made one thing clear: crypto is still moving forward, just not quietly.

Top Headlines

Bitcoin Volatility Dominates the Conversation

Bitcoin once again dictated market mood this week, as thin liquidity amplified price movements. A series of disruptions exposed how quickly localized issues can spill into global sentiment when traders are already on edge.

Price Disruptions Shake Confidence

Bitcoin had a rough week, with sharp swings hitting a market that was already low on liquidity. As trading depth slowly disappeared, even small shocks started to generate bigger price movements than usual.

The most striking example was in South Korea, where, due to a sudden pricing mishap on a major exchange, Bitcoin was briefly pulled down well under global levels.

Causes Forced Selling

On Bithumb, a crediting mistake from the inside led to Bitcoin being traded almost 10% cheaper than the rest of the world.

Such a price difference triggered forced liquidations and panic selling, which made the sentiment even more negative in a situation where traders were already worried.

Moreover, the sell-off that had already started had also overflowed into the general market even after the problem was solved.

Exchange Guarantees 110% Refund

Bithumb issued a statement promising that they would compensate the users who had been affected at 110% of their losses in response to the incident.

In fact, the intention behind the measure was to bring back the trust of the public but at the same time, it was pointing out the bigger issue that during volatile markets, confidence can be lost very rapidly, and it takes more than a mere technical fix to regain it.

Billions Vanish as Holders Capitulate

As prices slid, estimates suggested close to $500 billion in Bitcoin holder value has been wiped out in recent weeks. Long-term holders remained largely intact, but short-term traders showed clear signs of capitulation.

“This Is a Bear Market,” Scaramucci Says

Investor Anthony Scaramucci didn’t sugarcoat it, openly calling the current environment a bear market — though he also suggested the end phase may be closer than many expect.

Institutions Buy While Retail Steps Back

As volatility discouraged retail participation, institutional behavior moved in the opposite direction. Accumulation continued quietly, reinforcing the growing divide between short-term fear and long-term positioning.

Strategy Adds More Bitcoin

While prices struggled, Strategy quietly added 1,142 more BTC to its balance sheet. Executive chairman Michael Saylor repeated his familiar message: long-term conviction matters more than short-term noise.

Bhutan Keeps Selling Bitcoins

Bhutan sold another 100 BTC, continuing their plan to gradually reduce their holdings. This seems like they’re managing their money, not just giving up on Bitcoin.

Infini Hacker is Back

Strangely, the Infini hacker is back, buying Ethereum near its lowest price in nine months using old wallets. This shows that everyone, even those with a bad reputation, looks for chances when the market attention returned to Binance as new questions emerged around market influence, transparency, and political exposure, placing the exchange back under the spotlight. The market is down.

Binance Faces Scrutiny Again

Questions About Trump-Related Stablecoin

Reports show Binance holds about 87% of the Trump-related USD1 stablecoin. This raises worries about who controls it, how open it is, and if it’s too connected to politics.

CZ Denies Manipulation

Binance’s founder, Changpeng Zhao (CZ), strongly denied claims that Binance gained from big Bitcoin positions or protected itself through BitMEX during market problems. He said the accusations don’t make sense and aren’t backed up.

Exchange Says It Wasn’t Behind Crash

Binance also said they weren’t responsible for the market crash on October 10, going against stories that say centralized exchanges caused the sell-off.

Stablecoin Issues Heat Up

Stablecoins moved back into political focus as banks, regulators, and crypto firms debated yields, incentives, and systemic risk.

Banks and Crypto Fight Over Interest

Stablecoins are back in the political spotlight as banks try to limit interest earned on stablecoins, saying they’re a threat to regular bank deposits. Crypto firms pushed back, especially after White House talks hinted at possible compromises.

Vitalik Defends Algorithmic Stablecoins

Ethereum co-founder Vitalik Buterin weighed in, arguing that algorithmic stablecoins can still represent “true DeFi” if designed responsibly — a statement that reopened debate after past failures in the sector.

Malaysia Moves Toward Tokenised Finance

Malaysia announced plans for a wholesale ringgit-backed stablecoin alongside tokenised deposits, showing how governments are choosing controlled adoption over outright bans.

Exchanges and Infrastructure Keep Evolving

Despite market pressure, development across trading platforms and regulated hubs continued at a steady pace.

Robinhood Launches Ethereum Layer 2

Robinhood launched its own Ethereum Layer 2 network, though its Q4 results painted a more cautious picture of retail demand than the product launch alone suggested.

Hong Kong Expands Crypto Market Access

Hong Kong confirmed it will allow perpetual contracts and crypto-backed financing, reinforcing its position as one of the most crypto-forward regulated markets in Asia.

Arkham Shuts Down Its Exchange

Arkham Intelligence announced it is shutting down its exchange arm, highlighting how difficult it has become to sustain trading venues under tighter conditions.

Wall Street Doesn’t Step Back

Traditional finance continued building crypto exposure, even as volatility dominated headlines.

Franklin Templeton Joins Binance

Asset manager Franklin Templeton partnered with Binance for institutional crypto trading, another sign that large firms continue building infrastructure regardless of market cycles.

Tom Lee Backs BitMine Over ETH

Strategist Tom Lee said BitMine could offer more upside than holding Ethereum outright, arguing that equity-linked exposure gives investors a different — and potentially more leveraged — way to play an ETH recovery.

ETH Upside Tied to Bitcoin’s Long Game

Lee added that Ethereum could still deliver a sharp move higher, suggesting gains of more than 80% if Bitcoin eventually reaches the $250,000 mark. His point was simple: ETH’s long-term trajectory remains closely tied to how far Bitcoin ultimately runs.

Legal and Political Pressure Builds

Courtroom developments and regulatory scrutiny continued to shape sentiment around major industry figures.

SBF Claims FTX Was Never Bankrupt

Sam Bankman-Fried has claimed that FTX was never actually bankrupt, saying he never personally filed for bankruptcy and that lawyers pushed through the filing to gain control of the company. 

He alleges the legal team’s decision to seek bankruptcy was unnecessary and obscured evidence that the exchange could have covered its obligations.

“Weaponized DOJ” Allegations Surface

Bankman-Fried also accused the U.S. Department of Justice (DOJ) of pressuring witnesses during his trial, a claim that adds yet another layer of controversy to an already messy legal battle.

DeFi, Prediction Markets, and New Launches

Polymarket Shortens the Clock

Polymarket introduced five-minute crypto trades powered by Chainlink, pushing prediction markets closer to fast-paced trading environments.

Hoskinson Sets Midnight Timeline

Cardano founder Charles Hoskinson said the Midnight mainnet is on track to launch by the end of March, marking a major step forward for Cardano’s privacy-focused roadmap.

Security Risks Extend Beyond Crypto

AI Supply Chain Attacks Hit ClawHub Skills

ClawHub Skills revealed it was affected by AI-driven supply chain attacks, underscoring how artificial intelligence is increasingly being used to exploit weaknesses even outside core crypto infrastructure.

News You Might Have Missed

Cash App removed fees on Bitcoin purchases over $2,000 to push higher-value adoption.

X confirmed crypto trading features are coming, while warning users about elevated risk.

Vitalik Buterin reiterated that decentralization should not be diluted for convenience.

Exchange errors reignited debates around self-custody versus centralized platforms.

What to Expect Next Week

The market’s focus will remain on Bitcoin stability after repeated exchange-driven shocks, while attention turns to whether institutional buying can offset retail fatigue. 

Stablecoin policy discussions are likely to intensify following White House talks, and infrastructure launches in Hong Kong, Ethereum, and Cardano may influence sentiment. Volatility remains high, but signs of long-term positioning are becoming harder to ignore.

Disclaimer: The information researched and reported by The Crypto Times is for informational purposes only and is not a substitute for professional financial advice. Investing in crypto assets involves significant risk due to market volatility. Always Do Your Own Research (DYOR) and consult with a qualified Financial Advisor before making any investment decisions.