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Crypto Weekly

Yaёl Bizouati-Kennedy

Crypto Weekly

It's during crypto winters that the best entrepreneurs build the better companies. This is the time again to focus on solving real problems vs. pumping tokens

Cryptos have been collapsing since the start of the year, reigniting fears of potential crypto winter. However, experts disagree with this premise and point to differences with previous crypto winters - notably, that of 2018 - stating that increased adoption will help temper the current bear market.

Despite reaching an all-time high of $69,000 in November 2021, Bitcoin has suffered from one of its biggest drawdowns - the 52.3% drop from the peak thus far ranks 6th in Bitcoin's history, according to a NYDIG report.

"This is a strikingly similar decrease and duration as the drawdown exhibited over the spring of 2021, with the caveat that this drawdown could continue to grow larger. Bitcoin's largest three drawdowns were also its longest, coinciding with the end of cyclical price rises."

While many investors are reeling from their losses, not everyone agrees that the current situation can be compared to the crypto winter of 2018, when Bitcoin fell more than 75% from previous peaks, according to Barron's. Some experts believe we already have entered another so-called crypto winter, including David Marcus, former head of Novi at Meta, who tweeted on Jan. 24 that "it's during crypto winters that the best entrepreneurs build the better companies. This is the time again to focus on solving real problems vs. pumping tokens."

Josh Olszewicz, head of research at Valkyrie Funds, told GOBankingRates that the drawdown in this market might be similar to the one we saw in 2018 and a correlation to the spectre of rising interest rates is notable. Still, the market is not the same as it was back then. Venture capital inflows totaled $33 billion last year, and many of these investments were directed toward building the financial system of the future, Olszewicz said. He added that El Salvador has adopted Bitcoin as legal tender, and many other countries are considering the same. He noted that another point of difference is that there are several spot Bitcoin products trading on exchanges outside the U.S. and Bitcoin futures exchangetraded funds and other ETFs. These offer indirect exposure to Bitcoin trading in the U.S., alongside the many companies that hold Bitcoin in their treasuries, which he describes as "a massive leap forward for digital assets." "Sure, things look a bit grim right now, but the stage is hopefully set for a strong recovery, and we remain far more optimistic that this is merely a correction before the consolidation that leads to a recovery sooner than many expect," he added.

BLOCKv co-founder Reeve Collins told GOBankingRates that this time around's crypto winter will look different than the last, in part because the space has grown not just in size but also in functionality and players. Collins said that what crypto can do now -- banking without banks with DeFi, NFTs, even fun games -- is far superior to what the OGs could do in 2017-2018. "Even if we see big price drops, the development of worthwhile projects in the cryptoverse will continue apace, thereby spurring even more adoption. Most investors and most people would benefit from zooming out, not getting too worried about volatility, and focusing on quality projects. This moment, when we look back in time, will be seen as a crypto spring."

Some in the industry believe that this crash is similar to the one of last May, when prices recovered in only a few short months, including Josh Goodbody, COO of Qredo, who tells GOBankingRates that this is less likely to be a prolonged crypto winter and more likely to be a short-term bear market.

"The price action is a distraction from the fundamental mission — that we are rebuilding the financial industry and changing the way the internet works. It is going to take a lot more than a quick sell-off to take us back into a cryptowinter," Goodbody said. 

GOBankingRates

Crypto Weekly

NFT Collectors Suffer Catastrophic Losses Due to Marketplace Exploit

Sean Dickens

API errors on popular NFT marketplaces OpenSea and Rarible have caused NFT collectors to suffer massive losses on their prized Bored Apes and Cool Cats. The problem was caused by NFT collectors accidentally canceling their listings on OpenSea by transferring their assets to another wallet in order to avoid cancellation fees, which can reach as high as $100 depending on gas prices.

The listing was 'canceled' as it no longer appeared on the front end of OpenSea's user interface as 'listed'. Nevertheless, the listings were still available as older 'listings' on the alternative marketplace Rarible, which uses OpenSea API data to list and display NFTs.

Over time, collectors began transferring their NFTs back to the original wallet. Now, unbeknownst to them, their prized assets were again purchasable for unbelievably low prices as the listings were still 'valid' on Raible. As collectors began to transfer their NFTs back to the original wallet, the listings remained 'open' on Rarible as the blockchain still recognized that the NFT was listed at the original listing price. Collectors lost their prized assets at unbelievably low prices, even though the listings were no longer available, as OpenSea's front end indicated that the listings had expired, meaning they were unaware their prized assets were still available, causing catastrophic losses to a select few.

The exploit started early this morning with a number of below-market-value purchases from OpenSea user' jpegdegen love 'for three Bored Apes, two Mutant Apes, a Cool Cat, and a Genesis CyberKongz NFT.

It's now believed that the exploiter interacted directly with smart contracts to 'bypass' the OpenSea interface and discover the listings that were still available for purchase 'on-chain' – thus making them purchasable without the holders being aware.

OpenSea Rarible exploit hack Coin Rivet The person behind the exploit, 'jpegdegenlove,' has managed to gain around 332 ETH ($737k) following the exploit. Following the low-ball purchases, the NFTs were then relisted at their perceived market value and instantly snapped by other collectors seeking the rarest assets available on the market.

Collectors are now being urged to cancel their older listings on Rarible to ensure that their assets are safe from the exploit. In addition, some prominent members of the Bored Ape community are planning on opening a fund to help recuperate the losses incurred by the unfortunate BAYC holders affected.

Raible moved swiftly to encourage users to cancel their older listings when the exploit was first discovered by canceling all OpenSea orders on its platform and informing users how to cancel their listings properly.

Today's exploit now provides the first stark reminder of the potential ramifications of the exploit and the costly mistakes that can be made in the unpredictable NFT space. 

Coin Rivet