News
25
Jan
crypto news

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News Summary 1/25: Markets, El Salvador, Hacks, NFT, and Solana

The stock market is in a deep dive, which is also reflected in cryptocurrencies. El Salvador’s President Bukele has been active on social media. YouTube and Crypto.com suffered strange data breaches. UFC will join the NFT sector. There have been technical issues on the Solana platform again.

The decline continues in the markets

There is a deep correction going on in the stock market right now. The biggest reason for this is the uncertainty that has caused cryptocurrencies to drop for two months as well.

Markets are trying to price in the new era of non-zero interest rates and tighter monetary policy. January has been terrible for markets overall. We haven’t seen anything like this since the collapse of March 2020.

The technology sector has suffered the most. There have been many big drops we usually tend to see only in the crypto markets. For example, trading platform Robinhood was yesterday 86 percent below its all-time high price! About half of the companies in the S&P 500 index have dropped more than 50 percent from 52-week highs.

It seems that the Federal Reserve (Fed) has created a market correction before interest rates have even been raised. There will be another Fed meeting this week. What will Jerome Powell reveal to investors? The popular trading firm Hedgeye published its own view of Fed’s decision-making.

There are two scenarios. Powell sticks to tightening, causing the market (and cryptocurrencies) to drop again. Then he could arrive a few months later as a market savior when the situation is getting out of hands.

Another scenario is that Powell softens his previous statements and tells that Fed is ready to support the market in case of further decline. This would most probably cause the market to shoot up.

January has proven the size of the bubble both the stock market and the crypto market was in at the end of 2021. A lot of money has left the market, even if interest rates are still at zero.

Traditional investors have often laughed at Bitcoin’s price drops. This time we are all in the same boat. Both stock and crypto portfolios have had a meltdown. We are experiencing a very exceptional time in the investment world.

A crypto investor must keep an eye on the development of the stock market and the comments of central banks. They affect directly cryptocurrency prices.

The president of El Salvador is once again in the spotlight

El Salvador’s President Nayib Bukele is a familiar character in the crypto industry. He features almost weekly in Bitcoin-related news. Here are some of the latest regarding Bukele.

First of all, El Salvador bought a dip! This really shouldn’t surprise anyone. Bukele missed an earlier crash in mid-January, but now he acquired bitcoins for about $15 million.

El Salvador now owns 1691 bitcoins, according to bitcointreasuries.net. Their exact purchase price is unknown, but most likely Bukele’s holdings are likely to be minus at least $20 million. That doesn’t seem to scare the president.

Instead, this “meme president” took the market crash with humor and updated his Twitter profile picture a few days ago with a McDonald’s employee’s outfit.

McDonald’s is a popular meme subject in the crypto world. The joke is that Bitcoin investors have to get back to work at McDonald’s during the market crashes. Even McDonald’s official Twitter account was joking at crypto investors yesterday.

President Bukele is also sticking firmly to his chosen line against credit rating reviewers. He firmly commented on the news that Moody’s had downgraded El Salvador’s debt rating due to Bitcoin purchases.

The third news relating to El Salvador is about the country’s official Chivo wallet. Bitcoin adoption has fared fast, or at least President Bukele tweeted so a week ago.

Four million users are a great achievement in a country of 6.5 million people. As Bukele commented above, the real percentage is even bigger as only adult citizens are taken into account. According to the news, up to 70% of the unbanked population would have downloaded a Chivo wallet.

The Chivo wallet is not the perfect solution for Bitcoin adoption, as it is provided by the government and requires KYC. However, this is the first step in decades-running adoption. It should also be remembered that in El Salvador you can use all the free Lightning wallets.

YouTube and Crypto.com being hacked

We’ve seen two quite strange data breaches in the past week. The targets were YouTube and the popular Crypto.com exchange.

Let’s start with YouTube. On Sunday, we saw a very strange attack targeted on the most famous YouTube channels of crypto industry. Among the victims were Boxmining, Ivan On Tech, Coin Bureau, and Andreas Antonopoulos.

Security is certainly in order on these channels, so it’s not about a weak password or a lack of 2FA. The accounts showed a scam video of One World Cryptocurrency.

It is still unclear how the accounts were accessed. Many people have speculated that the hacker was a YouTube employee or someone else who would have gained access from inside. It would be very difficult to believe that two-factor authentication failed.  YouTube has not published a wider explanation of the case.

Also, at Crypto.com, hackers managed to bypass the two-factor authentication.

The popular cryptocurrency exchange lost about $34 million worth of cryptocurrency – mainly Ether and Bitcoin. The coins were stolen from the wallets of 483 users. Hackers managed to withdraw funds, even though (at least some of the) accounts were protected by the two-factor authentication.

Apparently, it was a security risk at the end of Crypto.com, which allowed 2FA to be bypassed. You can read more on what happened on Crypto.com.

All losses will be compensated. In addition, each app user had to log in to the account and re-enable 2FA. Crypto.com will also have a 24-hour time lock after accepting a new withdrawal address.

NFT news: UFC, Top Shot, Twitter

Not a week without NFT news! Although cryptocurrencies have been on a downtrend since November, the NFT sector is booming. Let’s check few interesting news from the past week.

UFC got its own NFT marketplace over the weekend. You can check it out at ufcstrike.com. The first NFT drop sold out quickly.

ufc-strike

The marketplace is powered by Dapper Labs, which is also known for the super-popular Crypto Kitties and NBA Top Shot NFT platforms. Both UFC and NBA-themed marketplaces are built on Dapper’s Flow blockchain. The NFT marketplace of the NFL will soon be launched on the same platform.

Many feel that the aforementioned NBA Top Shot is the platform that brought the NFT into the mainstream in 2021. Top Shot has been slightly in the shadows after the biggest boom, but now its NFT videos are selling better than in eight months.

You can watch a promotional video starring NBA player Kevin Durant below.

 

The third NFT news is related to Twitter. This popular social media platform has enabled a feature for users to have their NFT profile pictures verified. For example, many users who own Bored Ape Yacht Club NFT’s use the money pictures as their Twitter profile.

Below is an example of rapper Eminem’s Twitter profile.

eminem

The problem at the moment is that anyone can copy an NFT image and put it on their own profile. Twitter is working to prevent this through a certificate of authenticity. In the first phase, it will only be available to Twitter Blue subscribers. Read more from Decrypt’s news.

Although an authenticity certificate is a good idea, it can still be bypassed as NFT images are not limited to verified collections. Most likely, this issue will be fixed in the future.

Anyone can take a copy of a Bored Ape Yacht Club image and mint a new NFT from it on the OpenSea marketplace. Then they can buy this NFT image for themselves and use it to verify their Twitter profile.

Twitter advantages OpenSea’s API connection on its new feature. The most important NFT collections are verified on the platform to ensure their authenticity.

Solana had technical issues again

Solana is often considered to be an “Ethereum Killer”. This refers to a new generation of smart contract platforms that have solved Ethereum (and Bitcoin) scaling issues.

Or have they, actually? This question has been brought up in the case of Solana, which has been advertised as the best scalable blockchain. Solana’s network has been congested again recently.

Technical problems have further accelerated Solana’s price to drop. The price of the SOL token has dropped more in recent weeks than any other top 20 cryptocurrency. At the time of writing, it is more than 64 percent below its ATH.

Solana has suffered similar issues in the past. According to founder Anatoly Yakovenko, the drastic use of bots and duplicate transactions have made the problem even worse.

Solana’s brand received a huge lift in 2021 and the SOL token also ended up in the portfolios of many institutional investors. One of Solana’s biggest supporters is Sam Bankman-Fried, founder of the popular FTX exchange.

The issues described above indicate that blockchain scaling is not as easy as many platforms suggest. “Ethereum Killers” are capable of great TPS (Transactions Per Second) readings on paper, but few of them have been tested with actual high traffic.

Solana is now in heavy use, and its infrastructure does not seem to be keeping up. One question is also to sacrifice decentralization in order to gain scalability. It has not been a major problem for investors, as you could see from the development of new platforms last year.

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