Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
The sharp sell-off in Bitcoin and other digital currencies — which has seen the crypto market shed a total of over $1 trillion in value since Nov 2021 — has led to a fear of a ‘crypto winter’ among investors. David Marcus, Meta’s former crypto head, indicated as much when he tweeted that during crypto winters, “the best entrepreneurs build the better companies”, and that it was now “time again to focus on solving real problems versus pumping tokens”. On the other hand, tech research firm L’Atelier COO Nadya Ivanova is hesitant to confirm the arrival of a crypto winter, saying instead that the market is merely “in a cooling-off period”. She also said such a period “might actually be an opportunity to start building the fundamentals of the market”.
The International Monetary Fund (IMF) is pushing El Salvador to strip Bitcoin of its legal tender status in the country, saying in a report that “there are large risks associated with the use of Bitcoin on financial stability, financial integrity and consumer protection, as well as the associated fiscal contingent liabilities”. The report, published following bilateral talks with El Salvador, also states that some directors had voiced concerns about the risks of issuing Bitcoin-backed bonds, referring to president Nayib Bukele’s plan to raise $1 billion through a ‘Bitcoin Bond’ in partnership with digital assets infrastructure firm Blockstream.
Indonesia’s Financial Services Authority (OJK) has prohibited financial firms from using, marketing, and / or facilitating crypto trading. It also warned the public to beware of fraudulent Ponzi schemes masquerading as crypto services. The OJK does not supervise or regulate crypto in Indonesia, which is under the purview of the Commodity Futures Trading Authority (CoFTRA) and Ministry of trade. Currently, the ministry is preparing a digital asset bourse, the Digital Futures Exchange, which will launch in Q1 2022.
Tesla CEO Elon Musk tweeted on Tuesday that he will eat a McDonald’s happy meal on live TV if the fast food giant adds Dogecoin (DOGE) as an official payment method. A few minutes later, the price of DOGE rose 7% from $0.135 to $0.145, a muted increase compared to the impact of previous tweets from the billionaire — a recent announcement on DOGE being used for Tesla merchandise payments saw the token’s price jump by over 25%. While current market conditions may be responsible, this also suggests Musk’s power to move markets is waning. McDonald’s replied to his tweet 10 hours later: “Only if Tesla accepts Grimacecoin.” Grimacecoin is a fake coin depicting one of McDonald’s previous mascots, Grimace.
Joe Grand, a Portland-based computer engineer and hardware hacker who goes by the alias Kingpin, has revealed in a YouTube video how he managed to crack a Trezor One hardware wallet containing more than $2 million in funds. In 2018, entrepreneur Dan Reich and a friend lost the security PIN and private key to the Trezor One on which $50,000 worth of Theta they had cashed out were stored. They were unsuccessful in guessing the PIN but with their investment rising to $2 million this year, they contacted Grand, who took three months to successfully recover the lost PIN. Grand explained that he caused “misbehavior on the silicon chip inside the device in order to defeat security” and once he saw he could do so, “the private information, recovery seed, and PIN I was going after popped up on the screen”. Trezor said that Grand’s exploit will not work on its latest wallets.
Show me the money
According to data from Huobi Global, BTC is currently located near 36,900 and is seeing strong pressure above 37,000, with daily charts showing signs of a long-term downward trend. ETH is now located near 2,450, with daily charts showing signs of a down-trend. In terms of contracts, Huobi Futures data shows that the open interest (OI) of BTC futures are stable, with slightly decreased volume. The OI of ETH futures saw a slight increase, with stable volume amid a relatively inactive market.