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The past week has offered a lot of excitement in the cryptocurrency world. Much of the week was spent with crypto markets reacting to China’s intensified crackdown on cryptocurrency activity. A number of cryptocurrencies were in free fall following the news.
Here are some of the top stories that caught our eye.
Crypto Crash Caused by China’s Policy
China is cracking down on cryptocurrencies. In the past week alone, the Chinese provincial government of Sichuan has ordered 26 of the largest cryptocurrency mines to shut down until authorities complete an investigation and tell banks not to handle crypto.
Several Chinese banks have sent a damning warning to many of its state-owned banks and Alipay, owned by billionaire Jack Ma, to investigate and identify accounts showing signs of crypto activity.
As for our own central bank, Merryn spoke to Andy Haldane, the outgoing chief economist of the Bank of England (yesterday was his last day) on the MoneyWeek Podcast. He has some good things to say about bitcoin (he’s not a fan), stablecoins and central bank digital currencies, listen to them here.
Many cryptocurrencies made the news. Bitcoin fell below $30,000 as market watchers speculated whether the cryptocurrency will break through other levels of support. However, it has since bounced back and is indeed the only cryptocurrency to rise in the past seven days. Earlier this week, Dominic looked to see if it has bottomed out – or if the defeat should go further.
Has the dogecoins bubble burst?
Dogecoin, the prank cryptocurrency, had a tumultuous week. It fell 36% on Monday and prices remained volatile for much of the week after. The cryptocurrency has launched a breathtaking rally in recent months due to some bullish tweets from Elon Musk and has risen with broader cryptocurrencies. But now investors may be realizing that the bubble has finally burst.
It is worth looking at the excess by which dogecoin rises or falls compared to other cryptocurrencies. The meme cryptocurrency is hyper sensitive to market movements and tends to rise more than other cryptocurrencies and tank more than others after any market news.
Cyber criminals abandon bitcoin in favor of monero
Bitcoin has long been a favorite of cybercriminals to use for criminal activity, but a report suggests they could be leaving the popular cryptocurrency for another.
As bitcoin transactions are mirrored on the underlying blockchain, a niche privacy coin called monero is gaining traction as the ability to hide both sender and receiver is attractive to cybercriminals, the Financial Times says.
Monero’s rise is the result of weaknesses revealed in last month’s Colonial Pipeline hacking incident. The incident involved the hacking of America’s largest pipeline by the hacking group Darkside.
After DarkSide encrypted Colonials data, it demanded cryptocurrency payments as ransom in exchange for giving Colonial Pipeline a decryption tool to unlock the systems that DarkSide hackers had brought to a halt. As a result, Colonial Pipeline paid nearly $5 million to the hackers.
We’ve seen ransomware groups shift to monero specifically, Bryce Webster-Jacobsen, director of intelligence at cybersecurity group GroupSense, told the FT.
Update for crypto markets
Here’s What Happened In The Crypto Market Over The Last Seven Days
- Bitcoin rises 6.5% to $33,274
- Ether dropped 17.9% to $1,865
- Dogecoin Down 13% to $0.25
- Cardano is down 10.3% to $1.30
- Binance Coin Down 15.9% to $290
What investors should watch out for next week
Watch the price of ether
Ethereum’s London Update Coming in July, which includes two new Ethereum enhancement proposals (EIPs). EIP-1559 is the one that investors should pay the most attention to as it will result in a reduced supply of tokens and a significant change in transaction costs.
Ether price could remain supported in the run-up to the update.
All Fed guidelines on rate hikes
And much of this week has been about Fed mania. The US Federal Reserve stunned markets last week when it said it could raise interest rates earlier than expected in 2023. But Fed officials have been ambiguous and contradictory in recent days. John Williams, president of the Federal Reserve Bank of New York, said this week that the US economy is not ready to withstand higher interest rates. Higher interest rates can make holding non-interest-bearing cryptocurrencies less attractive.
There is much more on all of these topics in upcoming issues of MoneyWeek magazine. If you are not yet a subscriber, you can first six issues plus a beginner’s guide to bitcoin, all for free here.
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