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Crypto Wrap: Is Crypto Back on the Menu?

Fresh Capital

Thursday, February 3, 2022

Thursday, February 3, 2022

An Ethereum hack loses $320 million USD

An Ethereum hack loses $320 million USD

It was a classic cryptocurrency week with micro bear and bull runs taking investors on an surging rollercoaster. The bear run has now lasted three months, with prices sliding since November last year. However, in recent weeks there been some resemblance of stability in the market, which turns us to this week question: is crypto back on the menu?

The Usual Suspects: A Rollercoaster of a Week

Bitcoin and Ethereum both had a micro bull run to start the week and then finished on mixed results. Interestingly, both bull runs coincided with the Reserve Bank announcing that the cash rate would remain at 10 basis points. While the RBA statements provide some certainty that the low interest rate environment may continue for a bit longer, it unlikely that this had a lasting impact given the global nature of the coins.

Bitcoin started the week at just over $54,250, and saw quick dip to start the week and then a midweek really rally to a high of $55,000 per coin before dropping to $52,140 by Friday, representing a weekly decline of 4%. Bitcoin continues to gather interest from governments and regulators around the world: El Salvador announced they would accept Bitcoin as legal tender and rejected pushback from the International Monetary Fund. This announcement may have spurned short-term trading volumes, driving a micro price increase before a short sell off to end the week.

Ethereum started the week at just over $3650, enjoyed an early rally to $3931 before dropping down to $3730 at the end of the week, and could be positioned to finish the week at a 2% gain. Interestingly, Ethereum prices seem largely unscathed from this week Ethereum hack, which saw more than 120,000 Ethereum (roughly worth $320m USD) stolen' from the Solana blockchain.

Despite the rollercoaster of a week, there seems to be indications that stabilisation prices may be occurring but with crypto, you never know.

The Best of the Rest: All Coins Are on this Rollercoaster

It wasn't just Bitcoin and Ethereum that had an oscillating week. Our next tier of popular coins; Cardano, XRP (Ripple), Avalanche and Polygon all experienced swings, dips and rallies but ended the week with some stability as they finished within the ranges of their Monday price.

Cardano is positioned to finish flat, hovering at its Monday price of $1.47. XRP held strong this week despite two micro rallies and dips, finishing at ~0.85 cents (down from 0.88 cents on Monday).

Avalanche also held steady but a midweek rally could have helped day-traders with a short-term gain, finishing at -1% of its Monday price. Polygon looks to be the cohort winner this week and could close the week finishing 5% above its Monday price.

For investors who trying to guard against volatility, this goes to show the powers of diversified portfolios.

The Weekly Loser: Solana Hack Leads to Midweek Losses

Solana, the coin that has said to rival Ethereum, suffered a major loss this week declining from $151 to $138 in just one day this week! For those unfamiliar, Solana is another blockchain that is said to be more efficient and cost effective than Ethereum. Solana has been especially popular with NFTs due to the lower gas fees involved as a result of its efficiency.

Earlier this week, over 120,000 Ethereum (worth over $320m USD) was stolen via the Wormhole Bridge'. This is a blockchain bridge' that allows users to convert Ethereum into Blockchain through a smart contract. The hacker exploited a vulnerability in the Wormhole Bridge, which enabled them to transfer the Ethereum away from the Bridge and into private addresses.

Developers from the Wormhole Bridge are looking into the exploit and have taken it down for maintenance, but this hack has had major impacts on the price of Solana and may shake investor confidence in Solana moving forward.

Weekly Winner: GameStop and Immutable X Partner to Win Gaming

Australian based NFT start-up Immutable X and US gaming company GameStop have formed a partnership. GameStop will use Immutable X Ethereum solution to be the infrastructure of their NFT platform. The two have formed a $100m token incentive fund focused on gaming and NFTs. The announcement late this week propelled the Immutable X token by 34%, where it is now one of the top 100 coins by market cap.

For those unfamiliar with Immutable X, they provide an Ethereum layer for companies to use which has zero gas fees and carbon neutral instant trades, enabling companies to build NFT marketplaces incredibly quickly. GameStop, the company who made headlines in 2020 after Reddit investors rallied against short-sellers to send the share price rocking. GameStop will leverage Immutable X layer to build an NFT marketplace as part of their future growth strategy.

Immutable X is only getting started as a company, and, as a relatively successful and well-funded start-up who are making big waves, they may be a long-term hold for those feeling bullish on NFT gaming.

Now that we're in February, the bear run has lasted three months and could continue despite the week short-term, particularly in the second-tier cohort of coins. There never a dull moment in cryptocurrency, so look out for our Monday Look-Ahead' to get informed on the latest updates and movements in the crypto space!

Sources: BTC Markets, CoinMarketCap

This post was written by Fresh Capital Media.

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