CryptoNews of the Week
- The US authorities announced the detention of persons they consider involved in the hacking of the Bitfinex exchange in 2016, and the confiscation of $3.6 billion worth of bitcoins stolen from it. According to a press release from the US Department of Justice, the accused are the spouses: a 34-year-old Russian and US citizen Ilya Lichtenstein and a 31-year-old Heather Morgan. “According to court documents, Liechtenstein and Morgan allegedly colluded to launder proceeds of 119,754 BTC stolen from Bitfinex after the platform’s systems were hacked and more than 2,000 unauthorized transactions were performed,” the agency’s website says.
Approximately 25,000 of these stolen bitcoins have been withdrawn from a Liechtenstein-controlled wallet through a complex money laundering process over the past five years, according to investigators. The rest of the stolen coins, more than 94,000 BTC, remained in the wallet, which allowed special agents to seize them legally. Representatives of the Ministry of Justice stressed that this is the largest case of cryptocurrency confiscation in the history of the department.
According to the latest information, the court of the Southern District of New York released the spouses on bail of $8 million, and the seized bitcoins were returned to the Bitfinex exchange.
- A trader nicknamed macromule shared a trading algorithm that could bring about 1000% per annum. The signal to open a position is the tweets of the Bitcoin skeptic and gold supporter Peter Schiff about the first cryptocurrency. The user recommended buying BTC every time after the next such tweet and closing the position after 72 hours. According to macromule, this strategy could have made 203 trades since last May, of which 65% would bring an average profit of 3%.
- Sean Farrell, an analyst at the financial research company FSINsight, believes that the
price of the first cryptocurrency is likely to reach $200,000 in the second half of 2022. According to his observations, the correlation of bitcoin and the crypto market as a whole with the shares of technology companies increased in the last quarter of last year. At the same time, according to Farrell, bitcoin’s dominance over altcoins remains unshakable and its price, despite a “shaky start” in early 2022, could eventually reach $200,000.
The FSInsight report also states that the ethereum platform is undervalued and the second largest cryptocurrency by capitalization may reach $12,000 this year. The analyst is optimistic about the transition of ethereum to the Proof-of-Stake algorithm. And if the process goes smoothly, capital inflows into the ecosystem will increase, “regardless of bitcoin’s performance.”
- The CEO of the KuCoin crypto exchange, Johnny Liu, shared his vision of the trends in the digital asset industry and focused on the decrease in the share of BTC relative to the entire crypto market. “Bitcoin dominance index is now 42%. Most innovative projects are launched on ethereum, and I believe that it will pull ahead in the long term,” Liu said.
As for regulatory issues, the head of KuCoin recommends patience. The authorities will gradually deal with the benefits and risks of cryptocurrencies. According to him, there is a trend in the mass adoption of cryptocurrencies at the state level, governments are exchanging experience in their legalization, so any restrictions are only a temporary measure.
- Billionaire Ray Dalio, founder of Bridgewater Associates, expressed the opposite point of view. He believes that cryptocurrencies are too vulnerable, they are easy to trace, and it is likely that this asset class will be banned by the governments of a number of countries. Given the small size of the cryptocurrency market, Dalio said, “it gets too much attention.” He confirmed that he invested in ethereum in December 2021, but digital assets make up a "negligible percentage" of his personal investment portfolio.
The head of Bridgewater Associates also advised to create an investment portfolio that is diversified across asset classes and markets. At the same time, the billionaire noted that "cash is garbage."
— Ricardo Salinas Pliego, one of the richest people in Mexico and the founder of the Grupo Salinas group of companies, said in an interview with Bitcoin Magazine that the first cryptocurrency was superior to fiat. “Anything we have in fiat can be completely seized by the authorities,” he noted and explained that the decentralized nature of the first cryptocurrency makes it much more difficult to ban or control it. Therefore, “the government is not interested in facilitating the use of bitcoin.”
He called the limited emission of 21 million BTC an additional advantage of the first cryptocurrency, which allows using this cryptocurrency as a store of value in the long term. “But don’t expect to easily make money on it in 30 days,” the billionaire warned.
- Cryptocurrency trader Dave the Wave believes that BTC could break the $100,000 mark at the end of this year or early 2023, while his scenario assumes a “decent correction”. The trader notes that the cyclical curve pointing to $100,000 should not be interpreted as a support level, but as an average exchange rate trajectory that bitcoin can follow roughly.
In regard to the near future, Dave the Wave noted that while bitcoin's monthly chart may still look bearish, certain bullish signals are emerging on the weekly chart. In addition, bitcoin managed to break out of the narrow downward channel.
- North Korea continues to develop its nuclear programs, and funds received from attacks on cryptocurrency exchanges have become an important source of their financing. This is reported by Reuters with reference to a UN report.
The authors of the report refer to Chainalysis data, according to which cybercriminals from the DPRK carried out at least seven attacks on cryptocurrency platforms last year, stealing assets worth about $400 million. Most of the funds were stolen in hacks that targeted at least three crypto exchanges in North America, Europe and Africa. According to Chainalysis, North Korea controls $170 million in the current balances of exchanges, but these amounts have not yet been laundered.
Recall that Pentagon officials previously claimed that more than 6,000 hackers around the world are working for North Korea.
- The author of the book The Ascent of Money, historian and economist Niall Ferguson said that if the historical dynamics of BTC fluctuations repeat, the price of the first cryptocurrency will fall by November 2022 to a low of $11,515. This is 83% below the historic peak in bitcoin value reached in November 2021.
At the same time, Ferguson disagrees categorically with the opinion of the Nobel Prize winner in economics Paul Krugman, who draws a parallel between the volatility of the cryptocurrency market and the collapse of the US real estate market in 2007-2008. Which, as you know, was followed by the global economic crisis.
Niall Ferguson believes that “it is not worth waiting for a polar vortex or a giant ice cyclone. However, this does not mean that crypto winter will bring less cold.” The crypto skeptic clarified that a fall in the value of bitcoin to the lows of the 2010s is unlikely, since BTC has become a larger asset than it was ten years ago, and its market capitalization has grown to almost $1.0 trillion in 2021.
- According to Robert Breedlove, CEO of Parallax Digital, the price of bitcoin will increase over the next few years, and its market capitalization will exceed $5.0 trillion.
Inflation in the US is at a 40-year high at the moment. And according to the businessman, the same thing can happen with the dollar as with the currency of Venezuela. The US dollar will hyperinflate by 2035. At this point, the price of bitcoin in dollar terms will become astronomical: 1, 5, 10 million USD per coin.
In terms of downside risks to BTC, the world's largest cryptocurrency faces few existential threats, and only finite probability or black swan events can significantly hurt its price. It could be a cryptographic hack, it could be some kind of cosmological event, an electromagnetic pulse could destroy all the electronic equipment in the world. However, the biggest threat to bitcoin comes from regulators, according to Robert Breedlove.
The authorities will try to make life as difficult as possible for cryptocurrencies, as a class that poses a threat to their financial systems, which are already under heavy debt pressure. Therefore, it is highly likely that the authorities will use all their tools to regulate digital assets as much as possible.
Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds.
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