PA Daily Report | Trend Research liquidates ETH holdings, incurring a loss of $688 million; Bitcoin mining difficulty decreases by 11.16%.

Today's top news highlights:

1. Macroeconomic Outlook for Next Week: Non-Farm Payrolls and CPI Data Ignite Gold-Dollar Showdown, Traders Face a "Hell Week"

2. Trend Research has liquidated its ETH holdings, selling 658,000 ETH in 8 days, resulting in a loss of $688 million.

3. Bithumb will begin distributing compensation starting today.

4. Li Lin: I haven't reduced my BTC or ETH holdings during this market rally, and I'm not an investor in LD or Garrett Gin.

5. Bitcoin mining difficulty decreased by 11.16%, the largest drop since May 2021.

6. Yi Lihua: The market cycle remains valid; I am optimistic about the next bull market opportunity and will continue building.

Macro & Regulatory

Macro Outlook for Next Week: Non-Farm Payrolls and CPI Data Ignite Gold-Dollar Showdown, Traders Face a "Hell Week"

U.S. stocks rebounded on Friday after a plunge in some of Wall Street's most crowded trading sessions. The S&P 500 rose 2%, and the Dow Jones Industrial Average touched 50,000 for the first time. Earlier this week, the release of a new automated tool by artificial intelligence company Anthropic PBC triggered a sell-off in software, financial services, and asset management stocks, which then spread to the wider market. This scene is reminiscent of the market's reaction to the DeepSeek AI model in early 2025. Traders are bracing for a new week with retail sales data, the delayed January U.S. nonfarm payrolls report, and CPI inflation data. Here are the key points the market will be focusing on this week:

At 2:30 AM on Tuesday, Federal Reserve Governor Waller will speak on digital assets;

At 04:15 on Tuesday, Atlanta Fed President Bostic, a 2027 FOMC voting member, will speak on monetary policy and the economic outlook.

At 01:00 on Wednesday, Hamak, a 2026 FOMC voting member and president of the Cleveland Federal Reserve, will speak on "Banking and Economic Outlook".

At 02:00 on Wednesday, Dallas Fed President Logan, a 2026 FOMC voting member, will deliver a speech;

At 08:00 on Friday, Dallas Fed President Logan, a 2026 FOMC voting member, delivered a welcome speech at an event, with Fed Governor Milan in attendance.

Uncertainty surrounding the outlook for Federal Reserve leadership has heightened market caution, raising questions about the future direction of policy. The market is currently reassessing the timing of potential rate cuts, with expectations for a June rate cut growing stronger.

Vietnam is considering imposing a 0.1% tax on cryptocurrency trading, similar to that on stocks, and raising the entry requirements for exchanges.

Vietnam's Ministry of Finance plans to levy a 0.1% transaction tax on cryptocurrency transfers completed through licensed service providers, maintaining the same rate as the current stock transaction tax. According to the draft policy, individual investors, regardless of tax residency, will be required to pay this tax based on the transaction amount when transferring crypto assets. Institutional investors, however, will be subject to a 20% corporate income tax rate on profits generated from cryptocurrency transfers, calculated after deducting costs and related expenses. Simultaneously, cryptocurrency transfers and transactions will be explicitly exempt from value-added tax (VAT).

Furthermore, the draft law defines crypto assets for the first time at the legal level, recognizing them as digital assets that rely on encryption or similar technologies for issuance, storage, and transmission verification. Regarding industry entry, Vietnam plans to set high thresholds for digital asset exchanges, requiring a minimum legal capital of 10 trillion Vietnamese dong (approximately US$408 million) and limiting foreign ownership to 49%.

Project Updates

Prediction market analyst Kalshi does not disclose details of Giannis Antetokounmpo's shareholdings, only confirming that it is less than 1%.

NBA Milwaukee Bucks star Giannis Antetokounmpo previously announced that he has become a shareholder of Kalshi, a prediction market platform regulated by the U.S. Commodity Futures Trading Commission (CFTC). According to a company spokesperson, Antetokounmpo's shareholding is less than 1%, but the specific shareholding data was not disclosed, nor was the difference between the actual shareholding and 1%. However, based on Kalshi's recent valuation of $11 billion, 1% of the shares are worth $110 million.

Arweave network block data display anomalies due to browser caching issues.

@mil_itia, an active member of the Arweave ecosystem, stated on the X platform that since yesterday, outdated Arweave block data has been displayed, making it appear as if the chain has stopped generating blocks. However, Arweave is actually generating blocks normally, and all transactions are being processed correctly. The issue is that Viewblock's browser is using a local cache count instead of the actual network block height, and the team is contacting them to resolve this problem.

Previous reports indicated that the Arweave network had not produced a block for over 24 hours.

Bithumb will begin distributing compensation starting today.

In response to the Bitcoin misissue incident, Bithumb released an update on its handling of the situation. It stated that it has completed the process of resolving the incident, recovering 99.7% of the mistakenly issued Bitcoins on the same day. The remaining 0.3% (approximately 1,788 Bitcoins) had already been sold and were fully replenished using the exchange's own assets. As of 22:42:52 on February 7, 2026, Bithumb's Bitcoin asset consistency has been restored to 100%.

The main developments in this incident are as follows:

• 2026-02-06 19:00: Overpayment of event rewards occurred.
• 2026-02-06 19:35: Start freezing transactions and withdrawals of accounts that have exceeded payment limits.
• 2026-02-06 19:40: Completed freezing of transactions and withdrawals in accounts with excessive payment limits, and began recovery efforts.
• 2026-02-07 00:23: First Announcement (Incident Situation and Progress of Preliminary Measures)
• 2026-02-07 04:30: Second Announcement (Cause of the Incident and Progress of Asset Recovery for Overpayment)
• 2026-02-07 13:00: On-site inspection by the State Financial Supervision and Administration Bureau begins.
• 2026-02-07 17:33: Third Notice (announcing a plan to prevent recurrence and provide customer protection and compensation)
• 2026-02-07 22:42: All 1,788 bitcoins sold have been settled using company assets.

In addition, according to the previously announced compensation plan, the compensation will be distributed in sequence starting today.

• 1) For all customers who were logged into the Bithumb application or website at the time of the incident: 20,000 Korean won will be paid.
• 2) Compensate users who sold Bitcoin at a low price during the event with 100% of the actual selling price difference plus an additional 10% consolation money.
• 3) All trading instruments will be exempt from transaction fees for 7 days (effective from 00:00 on February 9, 2026).

Analysis & Opinions

Analysis: This cycle exhibits characteristics of a "reverse knock-off season," with structural weakening and increased divergence.

Analyst Ali published a lengthy analysis on the X platform, pointing out that this cycle may have entered a "reverse altcoin season" unlike the traditional pattern. Historically, altcoin seasons typically involve a surge in Bitcoin followed by a rotation of funds into altcoins, driving a general rise across the board. However, the current cycle is characterized by structural weakness and increased divergence among altcoins. A review of the cycle shows that Bitcoin bottomed out around $15,000 after the FTX incident in November 2022, subsequently embarking on a bull market and reaching a high of around $126,000 in October 2025. However, during this period, the market did not experience a typical broad-based altcoin rally. Most altcoins exhibited characteristics such as breaking down long-term trend channels, failing to hold key support levels, and experiencing increased downward volatility. In this environment, market opportunities are more concentrated on structural divergence and two-way trading than a one-sided upward trend. From a market structure perspective, the current situation resembles a phase of selective deleveraging and valuation correction for altcoins, rather than a traditional full-blown altcoin bull market. In the short term, the market may continue its divergent pattern, and the structural downside risks have not yet been fully released.

Bloomberg analysts: Underestimating selling pressure from early Bitcoin holders impacts the market; ETFs fail to effectively reduce volatility.

Eric Balchunas, a senior ETF analyst at Bloomberg, published an article on the X platform reflecting on his assessment of the Bitcoin ETF's funding structure. He stated that his previous judgment that the investor structure of Bitcoin ETFs would be stronger than the market expected remains largely valid. However, his earlier prediction that ETF funds would reduce market volatility has proven to be incorrect. Balchunas explained that he initially believed ETF retail funds would replace the highly speculative retail investors who were active before the FTX incident, thereby improving market stability. However, he failed to fully consider the selling pressure from early holders (OGs) reducing their positions at high levels. He also pointed out that Bitcoin's approximately 450% increase in two years is itself a potential risk signal, as rapid price increases are often accompanied by high volatility. Therefore, Bitcoin's high-volatility, high-risk asset characteristics will continue in the foreseeable future.

Wintermute CEO: Recent rumors of "institutional collapses" are extremely unreliable. The current crypto market is more orderly and the risks are controllable.

Wintermute CEO Evgeny Gaevoy published a lengthy article on the X platform, expressing strong skepticism about the rumors circulating in the market regarding a "large institution's liquidation." He believes that even if individual institutions experience problems, it is unlikely to have a medium- to long-term systemic spillover effect. Historically, when 3AC collapsed after the Terra incident, the industry quickly confirmed the news through internal communication channels; the FTX incident also rapidly revealed risk signals during discussions with Binance regarding a bailout. Currently, no similar signs have been observed, and the related rumors mostly originate from anonymous accounts lacking credibility.

Evgeny Gaevoy believes that the leverage in this cycle primarily comes from perpetual contracts. Compared to the leverage facilitated by opaque, unsecured lending platforms like Genesis and Celsius in the previous cycle, its structure is more orderly. Exchanges have also learned from their margin management mistakes and are using mechanisms like ADL to avoid losses. Furthermore, he believes that no institution would now adopt FTX's model of investing user deposits in illiquid assets. Finally, he states that if a company truly goes bankrupt, publicly denying it is very risky, especially if the company is located in Europe, the US, the UK, or Singapore, potentially facing lawsuits.

Analysis: The decline was not a systemic crisis, but rather a result of Bitcoin's inherent volatility and the market's misjudgment of the Federal Reserve's policies.

Hedge fund veteran Gary Bode said that Bitcoin's nearly 50% drop from its recent high is consistent with its historically sharp but short-lived corrections, rather than a sign of a systemic crisis.

Gary Bode believes the market misinterpreted Kevin Warsh's nomination as a signal of the Federal Reserve tightening policy, and that market expectations, margin calls, and profit-taking by large investors were the main reasons for the sell-off. While whale selling and pressure from Strategy may put downward pressure on prices in the short term, they will not change Bitcoin's supply ceiling or its long-term investment value as a volatile store of value.

Coinbase CEO: Crypto market volatility is cyclical; long-term outlook remains positive.

Coinbase CEO Brian Armstrong stated that the recent volatility in the cryptocurrency market is nothing new. The crypto market has experienced numerous cyclical fluctuations to date. Armstrong said, "Personally, this doesn't change my view—I can't think of any reason not to be bullish on cryptocurrencies in the long term. It's eating away at the financial services industry at an alarming rate. Coinbase will continue to provide services in any market environment, as always."

Li Lin: I haven't reduced my BTC or ETH holdings during this market rally, and I'm not an investor in LD or Garrett Gin.

Huobi co-founder Du Jun stated on the X platform that Li Lin will not sell Bitcoin to exchange for Ethereum. His family office, Avenir Group, remains the largest holder of BlackRock's IBIT in Asia, and its SEC 13F report is updated quarterly. Regarding Ethereum, approximately 80% of its holdings are staked and held long-term. According to Du Jun, 95% of Li Lin's funds are managed by his family office team and have not been entrusted to external institutions or individuals.

In addition, Li Lin emphasized in his WeChat Moments that he is not an investor in LD or Garrett Gin; he has not reduced his BTC or ETH holdings during this round of market activity.

Yi Lihua: The market cycle remains valid; I am optimistic about the next bull market opportunity and will continue building.

Yi Lihua stated on the X platform, "First, we acknowledge that market cycles remain valid. With the strong performance of US stocks and the new phase of DAT/ETFs, the consensus in the crypto community has not been broken, coupled with the market's susceptibility to manipulation. However, conversely, the crypto market entering a bear market also presents the best opportunity to position ourselves, just as we profited from the previous bear market. The future is bright, and we remain optimistic about the next bull market opportunity in the industry. We will continue to work hard building; pessimists are right, optimists win."

mechanism

A new wallet, suspected to belong to Bitmine, withdrew 20,000 ETH from Kraken, worth $41.67 million.

According to Onchain Lens monitoring, a new wallet, possibly belonging to Bitmine, withdrew 20,000 ETH from Kraken, worth $41.67 million.

Trend Research reports a loss of $688 million from selling 658,000 ETH in 8 days.

According to on-chain analyst Ai Yi, Trend Research, owned by Yi Lihua, sold 658,168.58 ETH in 8 days, worth $1.354 billion, even depositing the last 0.148 ETH into exchanges; the cost price was approximately $3,104.36, and the selling price was $2,058.05, resulting in a total loss of $688 million in this round. The previous round's profit of $315 million has been completely wiped out, resulting in a loss of $373 million.

Trend Research has liquidated its ETH holdings and currently has only 0.165 coins remaining.

According to Arkham data, Trend Research, a subsidiary of Yilihua, has liquidated its ETH holdings, and currently only 0.165 ETH remain in its on-chain address.

Important data

Bitcoin mining difficulty decreased by 11.16%, marking the largest drop since May 2021.

According to CloverPool data, Bitcoin mining difficulty was adjusted at block height 935,424 at 21:56 today, dropping to 125.86 T, a decrease of 11.16%, marking the largest drop since May 2021. The current network hashrate is 948.13 EH/s, and analysis indicates that the next Bitcoin mining difficulty adjustment is expected to be further reduced.

Bybit ranked first in daily ETH contract trading volume, with a year-on-year increase of 354.01%.

According to on-chain analyst Ai Yi, ETH's 24-hour contract trading volume ranked first on Bybit, reaching $21.58 billion, a year-on-year increase of 354.01%. Market speculation suggests that the abnormal price fluctuations in the early morning were caused by problems with Bybit's market makers.

Previous reports indicated that BTC and ETH experienced unusual price fluctuations within a few minutes starting at 00:05, with abnormally high trading volumes on multiple exchanges. Market speculation suggests this may be related to errors in the grid trading strategies of some market makers.