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Bitcoin (BTC) price slides as US seizes most of Colonial ransom

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A banner with the logo of Bitcoin is seen during the Bitcoin 2021 Convention at the Mana Convention Center in Miami, Florida on June 4, 2021.

Marco Bello | AFP | Getty Images

Bitcoin’s price slipped again on Tuesday. The reason for the move was unclear, but could be related to concerns about the security of the cryptocurrency after U.S. officials managed to recover most of the ransom paid to hackers targeting the Colonial Pipeline.

According to court documents, the investigators were able to access the password for one of the hackers’ Bitcoin wallets. The money was brought back by a recently launched Washington task force that was created as part of the government’s response to the rise in cyberattacks.

The world’s largest cryptocurrency slipped over 7% to $ 32,936 at 7:30 a.m. ET, according to Coin Metrics. Smaller digital coins also slumped, with Ether falling more than 7% to $ 2,512 and XRP also falling around 7%.

April 2021 was set to be a stellar year for digital assets, with Bitcoin topping $ 60,000 for the first time. But a recent slump in crypto prices has shaken confidence in the market. Bitcoin fell to nearly $ 30,000 last month and is currently nearly 50% below its all-time high.

The digital currency has only risen 14% since the start of the year, but it has still more than tripled from the previous year.

US is bringing back most of the colonial ransom

On Monday, U.S. law enforcement officials said they had seized $ 2.3 million worth of bitcoins paid to DarkSide, the cybercriminal behind a crippling cyberattack on the Colonial Pipeline.

According to a court document, the Federal Bureau of Investigation was able to access the “private key” or password for one of the hackers’ Bitcoin wallets. Bitcoin has often been the currency of choice for hackers demanding ransom payments to decrypt data locked by malware known as “ransomware”.

Crypto media company Decrypt reported that there were unsubstantiated rumors that the attackers’ Bitcoin wallet was “hacked”, an unlikely scenario.

DarkSide, which allegedly received $ 90 million in Bitcoin ransom payments before it closed, operated a business model called “Ransomware as a Service” in which hackers develop and market ransomware tools and sell them to affiliates who then carry out attacks.

According to blockchain analytics firm Elliptic, the seized funds represented the majority of the DarkSide subsidiary’s share of the ransom paid by Colonial.

John Hultquist, Vice President of Analysis at Mandiant Threat Intelligence, said the move was a “welcome development.”

“It has become clear that we need to use a variety of tools to contain the tide of this serious problem, and even law enforcement agencies need to broaden their approach beyond building procedures against criminals who may be beyond the reach of the law,” said Hultquist .

“In addition to the immediate benefits of this approach, a greater focus on disruptions can discourage this behavior, which is growing in a vicious circle,” he added.

Crypto penetration

A number of issues weigh on cryptocurrencies, including fears of regulatory crackdowns and recent tweets from Tesla CEO Elon Musk.

Chinese authorities last month called for crackdown on crypto mining and trading. Once a major player in the market, China has since scrapped speculative investments in cryptocurrencies, banned a fundraising method known as Initial Coin Offerings, and closed local exchanges.

In the meantime, Elon Musk has gone from being a supporter of Bitcoin to an apparent infatuation within a few months. Musk’s electric car company stopped accepting Bitcoin as a payment method last month due to concerns about its environmental impact, resulting in a sell-off in the crypto market.

“Bitcoin bulls have been chastened by the market retreat and may feel bitten once, shy twice,” Charles Hayter, CEO of digital currency data company CryptoCompare, told CNBC.

“The euphoria has subsided to some extent in the retail frenzy as regulators have moved to soften manias,” he added. “The data shows that institutions continue to corner the market.”

Last week, thousands of bitcoin investors came to Miami for what is considered the largest bitcoin event in history.

The conference had some bizarre high points, including El Salvador’s President Nayib Bukele, who announced plans for the country to accept Bitcoin as legal tender.

Cryptocurrency

Crypto retreats as bitcoin and ethereum lead mild sell-off

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Bitcon and Ethereum prices fell 4% on Friday. Photo: Yuriko Nakao / Getty Images

The cryptocurrency market saw a small sell-off on Friday morning, with Bitcoin (BTC-USD) and Ethereum (ETH-USD), the world’s first and second largest coins, down around 4%.

Bitcoin, currently trading at $ 37,866 (£ 27,259), hit levels of $ 41,330 on June 15, a key resistance area of ​​$ 41,250, but has continued to decline since then.

This week it was rocked by an announcement by the US Federal Reserve that it could hike rates through the end of 2023. Assets deemed risky, such as certain stocks and crypto, have also been weighed down by ongoing fears that the Fed may unwind its bond purchase program earlier than expected.

Bitcoin has been in decline for the past few days.  Chart: Yahoo Finance

Bitcoin has been in decline for the past few days. Chart: Yahoo Finance

On Thursday, the World Bank also rejected a request from El Salvador to help introduce Bitcoin as legal tender.

The bank said it could not support El Salvador’s plans due to the environmental impact of Bitcoin mining and the transparency drawbacks.

It came when the UK’s Financial Conduct Authority (FCA) reiterated its warning that people “should be ready to lose all their money” when investing in cryptocurrencies.

The regulator estimates that 2.3 million adults in the UK now own crypto assets, up from 1.9 million last year, with more and more people viewing them as either a complement or an alternative to mainstream investments.

Enthusiasm for crypto assets is also growing. More than half of crypto users said they have had positive experiences so far and are likely to buy more, from 41% to 53%, according to the FCA. Fewer people also regret buying cryptocurrencies, from 15% to 11%.

Sheldon Mills, FCA’s Executive Director, Consumer and Competition, said, “The market has continued to grow and some investors have benefited from rising prices.

Watch: What is Bitcoin?

“However, it is important that customers understand that if something goes wrong, they will likely not have access to the FSCS or the Financial Ombudsman Service as these products are largely unregulated.

The story goes on

Cryptos have recently been empowered with institutional support. Several organizations, including MicroStrategy (MSTR), have invested billions of dollars in cryptocurrencies, and traditional financial firms like PayPal (PYPL) and Goldman Sachs (GS) have started managing the asset on behalf of customers.

“While things may seem calm to the inexperienced, behind the scenes activity is still strong,” said Paolo Ardoino, CTO at Bitfinex. “Options markets are buzzing while institutions test strategies.”

He added, “Bitcoin has become an integral part of some of the most diverse portfolios around the world. Long-term private investors ride the wave. The builders of Bitcoin keep building. The first Bitcoin upgrade in four years has been approved and will take effect in November. The developers are working in anticipation of the upgrade. The community continues to improve the global financial networks. “

However, according to a survey by Bank of America, 81% of fund managers say Bitcoin is still a bubble.

View: What are the risks of investing in cryptocurrency?

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Cryptocurrency

bitcoin price: Top cryptocurrency prices today: Ethereum, Polkadot, Uniswap down up to 6%

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NEW DELHI: Major cryptocurrencies traded lower on Friday as US regulators delayed Bitcoin ETF approval. This has clouded the sentiment of crypto investors. However, digital tokens pegged to dollars have shown signs of resilience. The majority of the top 10 digital tokens traded with cuts at 9:30 a.m. IST.

The Securities and Exchange Commission (SEC) said in a regulatory filing that it will seek public comments on a proposal to list Bitcoin ETFs with Cboe Global Markets Inc. It’s not the first time this year the SEC has delayed responding to crypto advocates.

Contrary to the views of the US Securities and Exchange Commission, the UK’s Financial Conduct Authority said more people are viewing crypto assets as a mainstream investment rather than “gambling” with ownership of bitcoin and similar cryptocurrencies in the UK this year rose to 2.3 million adults.

Regulators have repeatedly warned investors about the “speculative” nature of largely unregulated crypto assets, which have fallen between 40 and 50 percent since peaking in May. However, global securities index publisher MSCI is considering the introduction of indices for cryptocurrency investments, another step towards mainstream adoption for digital currencies.

“It was an eventful week for cryptos. Both BTC and ETH have been trading almost unchanged since the beginning of the week. We might see a small sell-off as sellers become more active. Polkadot remains under tremendous selling pressure The dollar-pegged cryptocurrency Tether, which is usually very stable, has risen slightly, “said Edul Patel, CEO and co-founder of Mudrex.

Bluechip venture capital funds, known for placing risky bets, like to invest in Indian crypto and blockchain startups, but say the uncertain political environment stands in their way.

Crypto shopping cart: Quick Glance (Source: coinmarketcap.com, as of 9:30 a.m., ACTUAL on 06/18/2021)

  • Bitcoin: $ 37,963.57, down 2.32 percent
  • Ethereum: $ 2,346.29, down 3.65 percent
  • Tether: $ 1.00, up 0.06 percent
  • Binance Coin: $ 354.07, down 0.99 percent
  • Cardano: $ 1.48, down 3.62 percent
  • Dogecoin: $ 0.3052, down 2.73 percent
  • XRP: $ 0.8415, down 1.84 percent
  • USD coin: $ 1, up 0.05 percent
  • Polkadot: $ 22.31, down 5.58 percent
  • Uniswap: $ 21.73, down 4.51 percent

Note: price change in the last 24 hours

Tech View from ZebPay Trade Desk

1inch was launched in 2019 with the aim of helping users find the best asset prices on decentralized exchanges. Within 2 years, 1inch has grown into one of the most widely used decentralized exchanges with over $ 290 million in their liquidity pool.

The 1 inch network is a collection of decentralized protocols with a DeFi aggregator and an Automated Market Making Protocol or AMM. Last December, 1inch launched its 1inch (1INCH) governance token, and the 1inch network was supposed to be managed by a decentralized autonomous organization (DAO).

ETMarkets.com

Tech-wise, 1inch has hit a ‘Morning Star’ pattern (Three Candle Trend Reversal Pattern) in the daily timeframe at the support level of $ 2.4 and is up nearly 56 percent, hitting the weekly high of $ 3.945.

However, the bulls failed to get a grip on the asset and failed to break the $ 4.00 resistance. As a result, the price has declined nearly 15.5 percent from its recent highs. To continue to bounce, 1inch needs to trade above $ 4 and close. The asset is currently trading at $ 3.319.

Main stages

Support: 2,442, $ 2.9

Resistance: $ 4, $ 5.4

The time is in UTC and the daily time frame is 12:00 PM – 12:00 PM UTC

(The views and recommendations in this section are the analysts’ own views and recommendations and do not represent those of ETMarkets.com. Please consult your financial advisor prior to entering into any position in any of the above assets.)

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Bitcoin (BTC) flaws set stage for alternatives

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Bitcoin, the most famous cryptocurrency in the world, has some shortcomings – and that, according to a Cornell University professor, has led other digital currencies to develop more workable options.

It’s not as anonymous as people think, and “mining” bitcoin is bad for the environment, stressed economics professor Eswar Prasad. It doesn’t work well as a currency either, he told CNBC on Thursday.

One interesting aspect is that other cryptocurrencies have come up with solutions to address some of Bitcoin’s shortcomings, said Prasad, who was formerly head of the China division of the International Monetary Fund.

1. Mining is harmful to the environment

Bitcoin mining refers to the energy-intensive process required to produce new coins and ensure that the payment network is secure and verified.

The electricity used to validate transactions on the Bitcoin blockchain as well as the mining process is “certainly not good for the environment,” said Prasad.

Tesla CEO Elon Musk said last month that his electric car company is no longer accepting bitcoins as payment for environmental reasons, causing the price of bitcoin to drop 5% in minutes.

He has since made a U-turn, saying in a tweet on Sunday that Tesla will accept Bitcoin in transactions if it can confirm “reasonable” and “clean energy use by miners”.

Crypto miners use specially designed computers to solve complex mathematical equations that make a coin transaction effective. The miners are rewarded for their efforts by getting paid in the cryptocurrency.

However, the entire process of creating a bitcoin requires a lot of energy and, according to the Cambridge Bitcoin Electricity Consumption Index, can use more electricity than entire countries like Finland and Switzerland.

On the other hand, Ethereum – the second largest cryptocurrency sometimes seen as an alternative to Bitcoin – is developing a different mining method that uses less energy, as Prasad pointed out.

Read more about cryptocurrencies from CNBC Pro

It is called “Proof of Stake” and is the underlying mechanism for Ethereum, which activates so-called “validators” in the network if they can prove that they own ether or a “stake”.

Ultimately, it should eliminate the need for massive computing power to validate transactions, and the Ethereum Foundation claims it will use 99.95% less energy than before.

“This will be a lot less energy intensive and could offer many of the benefits that Bitcoin should offer. It could also make transactions a lot cheaper and faster, ”said Prasad.

It’s not there yet, however, he added.

2. Not so anonymous after all

Earlier this month, U.S. law enforcement officials announced they had recovered $ 2.3 million in Bitcoin paid to a cyber criminal group involved in the ransomware attack on the Colonial Pipeline in May.

The FBI said its agents were able to identify a virtual wallet that the hackers used to collect payments from the Colonial Pipeline.

“The main idea of ​​Bitcoin … was to provide pseudonymity,” said Prasad. “But it turns out that if you use Bitcoin a lot, and especially if you use Bitcoin to get real goods and services, it will eventually become possible to link your address or physical identity to your digital identity.”

What is interesting, he said, is that there are other cryptocurrencies trying to fix this and provide more anonymity. He named Monero and Zcash as examples.

Chris Ratcliffe / Bloomberg via Getty Images

“So Bitcoin has really started a search for a better alternative and people seem to be looking for a medium of exchange that doesn’t have to go through a trustworthy institution like the government or a commercial bank – but that’s not quite there yet “said Prasad.

3. Doesn’t work well as a currency

In theory, Bitcoin should provide an anonymous and efficient medium of exchange, but “it didn’t work in that regard,” said the economics professor.

Rather, it is “slow and awkward” to use Bitcoin to pay for goods and services, and the market is very volatile, Prasad said.

Bitcoin is prone to large fluctuations in volatility, as evidenced by the 30% decline in a single day over the past month.

“So you could take a bitcoin to a store and get a cup of coffee one day and a lavish meal with the same bitcoin the next. So that doesn’t work well for the medium of exchange, “he said.

Bitcoin has become a speculative asset for people who hope it will increase in value instead of using it as a means of payment, Prasad said.

– CNBC’s Sam Shead contributed to this report.

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