Crypto Weekly: A week of all-time highs
Summary: Bitcoin hit a new all-time high on Saturday of $61,500 a few days after US president Joe Biden signed a $1.9trn stimulus program. A new all-time high was also set in the non-fungible tokens space with a collage selling for $69mn.
Bitcoin reached a new all-time high
On Saturday, Bitcoin spiked to a new all-time high of $61,500. The upward trend surpassed the previous high of $58,300 set in late February. The surge comes only two days after a $1.9 trillion stimulus program was signed by US president Joe Biden sending a check of $1,400 to many U.S. citizens. The new all-time high also comes after the Chinese-based internet firm Meitu purchased $17.9mn worth of Bitcoin and $22mn in Ethereum some weeks ago. The trending NFT space has most likely also contributed positively to the surge. Bitcoin is currently trading at $55,300.
NFTs are trending – one selling for $69mn
Non-fungible tokens – known as NFTs – have gained extreme traction for the past months. Non-fungible tokens are unique digital files stored on a blockchain, mainly on the Ethereum-network. As they are only stored in one single copy, they are excellent to verify the ownership of an asset. Currently, NFTs are mainly used to provide proof of authenticity of digital art. Particularly these NFTs for digital art have surged in value over the past months. This culminated last week as one previously unknown artist called Beeple sold an NFT for $69mn reaching a new all-time high for an NFT sold. The NFT was a collage called: “Everydays: the First 5000 Days”. Until October 2020, the most money Beeple had sold a piece for was $100. Last month, an NFT from Beeple originally sold for $66,666.66 in October 2020, was resold to a price of $6.6mn. Yesterday, Elon Musk posted a new song on his Twitter-account about NFTs stating that he intends to sell it as an NFT. The highest bid currently to buy the song is slightly above $1mn. It is no secret that the market for NFTs is red-hot, and you should as an investor act with caution. On the other hand, it shows that tokenized assets work in practice, and can in the future be used for other assets like stocks and real estate with the option to trade the assets directly on decentralized exchanges.
DNS attack shows the vulnerability of decentralized finance
Speaking of decentralized exchanges, one of the largest decentralized exchanges called PancakeSwap on Binance Smart Chain suffered yesterday from a DNS spoofing attack. The attackers added a pop-up to the website asking users for their seed phrase. The seed phrase is used to recover lost cryptocurrency wallets. By obtaining access to the phrase the attackers can easily gain access to the user's wallet. Experienced users are aware that they should never give anyone access to their seed phrase. However, more inexperienced users are more likely to fall for the attack. This attack shows the vulnerability to decentralized finance in general, especially the centralized part of the protocols. The PancakeSwap website is e.g., centralized. Thereby, attackers can change the website if they gain access to it and potentially steal millions of funds. However, the attackers are by default not able to change the decentralized protocol itself, and users can always access the protocol through other means than just the official website, even though many use the official one.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.