Bitcoin’s hashrate recovers from 40% plunge as crypto industry consolidates
Data from CryptoCompare shows that the price of Bitcoin started the final week of 2022 trading close to the $17,000 mark, and throughout it plunged to $16,400 before recovering. The flagship cryptocurrency is now trading at $16,700.
Ethereum’s Ether – the second-largest cryptocurrency by market cap – traded in a similar way, seeing a high near $1,250 before dropping below $1,200. A subsequent recovery saw it move up to $1,220, where it’s currently trading.
Headlines in the cryptocurrency space this week focused on a number of topics, including Bitcoin’s hashrate recovering from a temporary drop it saw over the previous week over freezing temperatures in the United States, which put a stain on the country’s electricity grid and saw BTC miners in Texas voluntarily curtail operations.
The Bitcoin network’s hashrate, a measure of the amount of computing power dedicated to mining new blocks, experienced a drop from 276.40 EH/s to 170.60 EH/s on December 25 before recovering to 241.29 EH/s on December 26.
A high hashrate is seen as a key indicator of network security. Texas, with its cheap electricity and favorable mining regulations, has attracted several large mining companies, including Riot Blockchain, Argo, Bitdeer, and Genesis Digital Assets.
While Bitcoin’s hashrate was part of the focus, so were the legal proceeding surrounding collapsed cryptocurrency exchange FTX and its former Chief Executive Officer Sam Bankman-Fried. The week started with District Judge Ronnie Abrams withdrawing from the case, as her husband Greg Andres is a partner at Davis Polk & Wardwell, a law firm that served as an adviser to FTX in 2021 and has also represented parties that may be opposed to FTX and Bankman-Fried.
In a filing, Abrams wrote that her husband had “no involvement in any of these representations,” but was nonetheless recusing herself from the case “to avoid any possible conflict, or the appearance of one.”
Over the week, it was also revealed that the Bahamian Securities Commission has taken custody of more than $3.5 billion worth of FTX customer deposits, according to a media release.
Shortly after the exchange filed for bankruptcy, around $372 million worth of tokens were stolen from its wallets by an unknown actor, believed to be an external hacker. Given the risk of possible looting by former employees, the regulator moved in as it “determined that there was a significant risk of imminent dissipation as to the digital assets under the custody or control of [FTX] to the prejudice of its customers and creditors.”
As the proceedings are ongoing, Bankman-Fried’s trading unit Alameda Research has sold millions of dollars worth of several Ethereum-based tokens as the firm’s founders face criminal charges related to the collapse of both Alameda and FTX.
Blockchain data provided by cryptocurrency research firm Arkham Intelligence suggests some $1.7 million were sold on the open market from Alameda-linked wallets on Wednesday. Data shows that sold tokens include USDC, DAI, Curve’s CRV, ETH, and Convex’s CVX.
These tokens were consolidated form several wallets into two, before being sold for USDT, which were then converted into BTC using swapping services like FixedFloat and ChangeNow.
Fidelity to launch NFT marketplace and financial services in metaverse
Meanwhile, financial services giant Fidelity Investments has applied for trademarks in the United States to offer various Web3 products and services, such as an NFT marketplace, financial investment services, and cryptocurrency trading in the metaverse.
The firm could offer various investment services in virtual worlds, including mutual funds, retirement funds, and retirement planning. It could also provide metaverse-based payment services, including electronic bill payments and fund transfers.
While Fidelity moves to offer its services in the metaverse, crypto lender Nexo terminated discussions of a potential acquisition of its rival crypto lender Vault, which has until January 20 to present a restructuring plan to creditors. The deal fell through after six months of dialogue.
In a letter to Vauld creditors, Nexo cited “challenges” during the talks, including “defamation” and the “spread of misinformation on social media.” The firm added it remains “dedicated to offering the creditors the most favorable recovery path forward,” and to “working for the benefit of the creditors and to support the development of the blockchain ecosystem”.
On top of that, crypto investment firm Midas Investments, which focused on decentralized finance (DeFi) yields, is shutting down following significant losses experienced in 2022.
Midas Investments will be shifting its focus to a new project centered around Centralized Decentralized Finance (CeDeFi), according to Levin. In preparation for this transition, the company has disabled deposits, swaps, and withdrawals.
FBI investigates 3Commas data breach
The US Federal Bureau of Investigation (FBI) is investigating the data breach at trading bot platform 3Commas, after weeks of criticism from users of the Estonia-based service, who claim that its CEO repeatedly ignored warning signs that the platform leaked user data.
Recently, 100,000 Binance and KuCoin API keys linked to 3Commas were leaked. On Thursday, the trading bot service’s users reported being contacted by agents from the FBI’s Cincinnati Field Office in connection to the leak.
Over the past several months, numerous 3Commas users have discovered that the platform traded away funds on linked crypto exchanges without their consent.
3Commas initially attributed these unauthorized traders to user phishing, and maintained its platform was secure. It only confirmed the API keys were leaked this week, before asking exchanges to “revoke all of the keys that were connected to 3Commas”.
Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.
Featured image via Unsplash.