6 min read

Massive Hacks, VC Wars, and Governments Embrace Blockcain: This Week in Crypto

Last Updated March 4, 2021 5:06 PM

By Jake Sylvestre

Make sure you check out last weeks post here, now let’s go over what happened in crypto this week.

Price Watch:

Bitcoin is up 5% this week after a strong gain of 15% last week. Much of the price gain came in a giant green candle when the price hit $9,000 before soaring up to $9,230 and stabilizing around there. The move comes as Bitcoin prepares to retest the important $10,0000 level. Analysts are extremely bullish with some setting near-term price targets of $11,500. The 5% up move was dwarfed by Bitcoin Cash’s 20% upward move this week.
Ethereum is up 7% this week after 2 straight weeks of 30% gains. The move comes as almost all of the high market cap cryptocurrencies have struggled to maintain double-digit gains. Many analysts have suggested this is a consolidation pattern and that the prices behavior at the $700 level will decide what happens in the short term.
The entire crypto market gained 10% this week following strong gains of 40% last week and 20% last week. With the move comes a further fall of BTC dominance to 36%. Just 4 points higher than the all-time low of 32.66% on January 12th. The move is huge since as recently as November Bitcoin dominance was as high as 61%. Overall analysts have been optimistic about crypto and are predicting huge increases in market capitalization.

Hacks:

MyEtherWallet Hacked: Popular Ethereum wallet interface MyEtherWallet succumbed to a DNS hijacking attack that allowed a hacker to redirect users to a malicious version of the website and phish their private keys. Hackers appear to have been able to obtain 215 Ethereum ($150,000) from the attack. It’s been reported that 85 Ethereum or about 40% of the Eth stolen was from one user. Similiar to past attacks on the Ethereum chain there are no plans to fork in order to get these users their lost Ethereum back.
Parity will not split Ethereum over $320 million in frozen Ethereum: Parity announced in a statement this week that it has no intention to split the Ethereum blockchain to recover funds lost by a bug in a smart contract several months ago. Recovery efforts are still active and EIP-999, meant to resolve the issue has been merged into the Ethereum codebase. Some have stated that a hard fork is inevitable. Only time will tell if Parity’s wishes are respected and a hard fork is avoided.
Coincheck made $491 million prior to hack: It’s been reported this week that crypto exchange Coincheck, which suffered a record-setting $432 million breach earlier this year was able to make a profit of $491 million before paying off damages resulting from the hack. Even after paying back all the users for money lost during the hack, the exchange managed to make a net pretax profit of $57.6 million. Despite all this, the disgraced exchange was acquired for a measly $34 million.

Technology:

AWS releases Blockchain Templates: Amazon subsidiary Amazon Web Services announced this week that it would be providing users with a fast and easy way to create and deploy secure blockchain networks with open source frameworks. The announcement comes despite reports earlier this year that AWS CEO Andy Jassy was not “buying into blockchain hype”.
Nasdaq Ventures Further into Crypto: Nasdaq, the world’s second-largest stock exchange with a $9 trillion market cap, is open to becoming a cryptocurrency exchange in a regulated market. In an interview with Squawk Box , Nasdaq CEO Adena Friedman excitedly talked about the liquidity her company’s exchange would be able to provide should the regulatory environment allow them to list cryptocurrencies on their exchange. The announcement comes in the same week that Gemini, the Winklevii owned crypto exchange supplying data to the CBOE, announced it would use Nasdaq technology as part of its trading platform.
10% of AMD’s revenue from Crypto: AMD in Q1 generated 10% of its revenue from sales of its graphics chips that are used to power computers in the cryptocurrency mining process for digital currencies like Ethereum. The massive expansion of GPU mining has caused a dearth of GPU’s resulting in stalled scientific progress, The lack of available GPU’s has also resulted in a rivalry between gamers, traditionally the biggest consumers of GPU’s, and miners. AMD competitor Nvidia has chosen to remain loyal to its core customer base and prioritize gamers over miners. Several analysts have speculated that AMD may be becoming overreliant on miners in such a way that could “devastate” it’s business.

Venture Capital:

Sequoia V. Binance: Venture capital firm Sequoia Capital is suing the founder of Binance, the world’s biggest cryptocurrency exchange, for allegedly violating an exclusivity agreement requiring him to negotiate exclusively with Sequoia for a set period of time by speaking to VC firm IDG capital. Later this week, Zhao issued a statement denying all of the allegations Sequoia has come forward with.
Andreessen Horowitz Plots a Dedicated Cryptocurrency Investment Fund: Job postings this week on Andreessen Horowitz website describe hiring needs for a “separately managed fund focusing on crypto assets’. While the company does not invest in crypto assets right now it’s blockchain investments include investments include Coinbase, Ripple, CryptoKitties, Polychain Capital, a crypto specific fund, and ICOs.

Regulation:

China crackdown: The People’s Bank of China, the country’s central bank, said it will continue to curtail risks from financing over the internet after stating it had ‘safely closed down’ all initial coin offering (ICO) platforms and cryptocurrency exchanges in the country. This claim has been heavily disputed as sources inside the country claim investors have continued to plow money into cryptocurrencies despite tight restrictions with harsh penalties.
India ban backfires: An Indian court has admitted a petition this week alleging that the bans surrounding cryptocurrencies issued by the Reserve Bank of India are unconstitutional.
California Embraces Blockchain: A California Senator has is introduced a bill that would allow blockchain technology into formal documentation known as a corporation’s articles of incorporation throughout the state of California. The bill essentially allows for the issuance of legally recognized corporate share certificates denoting ownership. The race to pass blockchain related legislation is tight with Arizona, Wyoming, and Delaware all working to pass blockchain regulations to attract the economic activity that comes with it.
France Slashes Cryptocurrency Tax Rate: France has more than halved its cryptocurrency income tax rate on capital gains, incentivizing citizens to invest in the burgeoning market. This move has come as a result of crypto assets being considered “moveable property” and therefore subject to different laws than traditional assets.

Featured image from Shutterstock.