Bitcoin breaks $30,000 as ethereum hits $2k after Shanghai, global crypto adoption rising | Weekly recap
This week was mostly bullish for crypto assets, particularly considering the stellar performance of top virtual currencies. The successful implementation of the Shanghai upgrade on Ethereum saw ETH, the native currency of the smart contracting network, push above $2,000 for the first time in 2023. Meanwhile, bitcoin (BTC) broke above $30,000 as bulls extended gains. Meanwhile, there were more positive news on adoption despite a wave of disheartening breaches and fraud puncturing investor confidence.
A resurgence of hacks and fraud schemes
Terraport Finance, a decentralized finance (DeFi) project on the Terra Classic ecosystem, was hacked this week. The project, which featured a decentralized exchange, was launched on March 31.
The team behind Terraport confirmed the hack on April 10, a few hours after multiple Terra Classic community influencers picked out the incident. On-chain data suggested that the hacker targeted the Terraport liquidity pool, draining over 15b terra classic (LUNC), 9.7 million TERRA, and an estimated 5.5 million USTC.
On the same day, GDAC, a crypto exchange in South Korea, was hacked for around $13m. The funds, drained from a GDAC hot wallet, represented 23% of the platform’s total holdings. The exchange investigated the incident and reported it to local authorities.
Rashawn Russell, a licensed broker who previously worked as an investment banker for Deutsche Bank AG, was indicted this week. He was accused of orchestrating a fraudulent scheme related to crypto investments and was arrested on April 11.
On April 13, circulating claims alleged that SyncDEX Finance, a DEX on zkSync, rugged its investors and deleted as social media accounts. It is reported that the rug pull saw liquidity providers lose 200 ETH.
Meanwhile, Yearn Finance, a yield farming platform, was targeted in an exploit affecting its yUSDT token, which functions as the protocol’s proprietary USDT token. The attacker created up to 1.2 quadrillion yUSDT tokens by exploiting a misconfiguration in the yUSDT’s design. The illegitimately-generated tokens were converted to other stablecoins, causing the protocol to lose $11.5m.
A hack on Bitrue, a crypto exchange, closely followed the Yearn Finance exploit. On April 14, the exchange was hacked and lost SHIB, ETH, QNT, GALA, HOT, and MATIC, cumulatively valued at an estimated $23m. Bitrue launched an investigation into the event, temporarily paused withdrawals, and promised full compensation for affected users.
Amid this spate of security breaches, Certik, a blockchain security resource, published a report detailing the recent wave of exploits that have plagued the industry over the past week. Their analysis revealed that there had been 27 such exploits since last Friday, resulting in a combined loss of $52.2m. Among the breaches were 14 phishing attacks, four Discord exploits, and one Twitter hack.
Global adoption rising
Despite the flurry of fraudulent activities and security breaches, the digital asset and blockchain industry experienced a notable uptick in adoption this week. Numerous private and government organizations were keen to leverage the benefits of the industry’s underlying technology.
On April 11, the Central Bank of Montenegro announced plans to partner with Ripple, a San Francisco-based technology company, to develop a central bank digital currency (CBDC) project.
Amid this increasing interest in CBDCs globally, the International Monetary Fund (IMF) said there was a need to provide greater clarity to the CBDC initiative, helping boost adoption. To this end, the IMF disclosed plans to publish a handbook to guide and support CBDC developments.
The UK government also showed its readiness to tap into the promise of the blockchain industry. Reports indicated that the government wants to set up a new Department of Science, Innovation, and Technology to oversee the country’s efforts to leverage the metaverse and web3 sectors.
A marked uptick in adoption among private firms
Besides government organizations, private entities are also interested. One notable example is ZA Bank, one of Hong Kong’s leading banks. The bank announced plans to expand its services to include accounts denominated in cryptocurrencies, enabling users to convert their assets between crypto and fiat currencies.
Billionaire Elon Musk’s Twitter also took a step forward in its goal to accommodate digital assets. Twitter partnered with the global trading platform eToro this week to enable users to trade digital assets and traditional stocks.
On April 12, Avalanche disclosed that several top Wall Street firms would be leveraging its new subnet, dubbed Spruce, to explore the potential of the Avalanche blockchain to enhance several financial services, including trade execution, asset tokenization, and settlement.
More US investors troop into crypto
Meanwhile, research from this week revealed that investors in the United States have become increasingly interested in digital assets in recent times despite the general bearishness in 2022. The report disclosed that almost a third of the country’s residents invest in bitcoin and other digital assets.
Moreover, a separate survey from April 11 found that most American-based crypto investors are unfazed by market turbulence. The survey discovered that 69% of crypto investors continued to hold on to their assets despite unfavorable market conditions, with only 31% resorting to capitulation.
Ethereum was bullish throughout the week, primarily driven by the anxieties and anticipations surrounding the upcoming Shanghai (or Shapella) upgrade. Earlier, Glassnode revealed that staked ETH deposits had slightly decreased in the days leading up to the upgrade, further compounding the uncertainty surrounding ether’s performance.
With the upgrade scheduled for April 12, fears were heightened among investors that the asset’s price would plummet as a result of significant withdrawals from the beacon chain. However, Glassnode forecasted that only 1% of staked ETH would be withdrawn in the first week following the upgrade.
ETH prices firm
On April 12, Ethereum developers completed the long-awaited Shapella upgrade, which triggered a rush of withdrawals from the network, resulting in 17,350 ETH within two hours. However, the price of ETH remained resilient, increasing by 2.3% within the 24 hours leading up to April 13.
The asset’s rally persisted, partly bolstered by bitcoin’s run during the same period. ETH reclaimed the $2,000 price zone on April 13 before soaring to an 11-month high of $2,128 on April 14.
The rally is despite a report showing that up to 292,000 ETH had been withdrawn 40 hours after the Shanghai upgrade.
Bitcoin bulls upbeat
At the beginning of this week, charts suggested that bitcoin was poised for a major breakout. The asset was trading at $28,321 at the time.
Moments later, bitcoin reclaimed $30,000 for the first time since June 2022. The asset rallied to a high of $31,000 on April 11 before recoiling to print lows at $29,637 and bouncing higher above $30,000 by this week’s close. This sudden downturn had a ripple effect across the broader cryptocurrency market, leading to a wave of liquidations worth approximately $98m.
A report from April 13 disclosed that long-term bitcoin investors had embarked on a redistribution campaign, seeking to cash in on the asset’s latest rally to $30,000. An analysis of BTC’s price movements also indicated that a price correction could be looming for the asset at its current position.
However, several analysts remained optimistic, maintaining that bitcoin’s upward trajectory is far from reaching its terminus. Bitcoin appreciated by 6.8% this week, briefly hitting $31,000 before facing stern resistance.