Bitcoin Crashes With Tech Stocks; DeFi’s $1 Billion Token

Bitcoin Crashes With Tech Stocks; DeFi’s $1 Billion Token

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CRYPTO MARKETS

Bitcoin topped $12,000 early in the week before falling off a cliff Wednesday and Thursday, sinking as much as 17% toward $10,000. Crypto hedge fund executive Joe DiPasquale referred to the range between $10,000 and $10,500 as “the last zone of defense,” as a futures trading gap set in late July just below $10,000 is a foreboding signal of more pain if bitcoin sinks below five figures.

Ether certainly wasn’t immune to the crash, but its rally of about 10% on Tuesday was much stronger than bitcoin’s. Those gains were erased by the end of the week, but it didn’t suffer much more damage after it returned to where it started last weekend.

DEFI TOKEN SOARS TO RECORD

Not all cryptocurrencies have struggled in recent weeks. Just a month and a half after its launch in July, yearn.finance (YFI), the governance token behind the DeFi protocol yEarn, reached a market cap of more than $1 billion. It rose 3,500% from its launch to a peak of more than $35,000 despite its creator Andre Cronje calling it “completely valueless” in a Medium post.

YFI sank with the rest of the crypto market later in the week, though anybody who invested close to its launch would still be exponentially richer.

FBI AND JUSTICE DEPARTMENT TARGET HACKERS

Elon Musk confirmed this week that the FBI foiled a ransomware plot against Tesla
TSLA
that likely would have demanded millions of dollars in bitcoin. In July and August, 27-year-old Egor Igorevich Kriuchkov was allegedly in touch with a Tesla employee offering $1 million and an upfront payment of one bitcoin. The employee alerted his coworkers, who contacted the FBI. Kriuchkov was charged and faces up to five years in prison if he’s convicted.

In a separate investigation, the U.S. Justice Department filed a civil forfeiture complaint to try to recover millions of dollars worth of cryptocurrency stolen in a successful hack by North Korean actors. The complaints highlights hacks in July and September 2019 that stole ALGO and Proton tokens and laundered them through Chinese over-the-counter traders.

BLOCKCHAIN ALLY VOTED OUT

Tyler Lindholm, a member of the Wyoming House of Representatives who sponsored several laws that made Wyoming perhaps the most forward-thinking state in the nation on crypto and blockchain policy, lost his Republican primary to conservative “alt-right” candidate Chip Neiman in August. The Casper Star-Tribune called the race part of a wave of “stunning upsets” that shifted the balance of power in Cheyenne further to the right.

GRAYSCALE’S PREMIUM PROBLEM

Grayscale, whose bitcoin trust fund has long served as a barometer for institutional adoption of bitcoin, launched two new funds for litecoin and bitcoin cash last week, but one of the funds quickly surged to an irrational value. The litecoin fund was briefly trading at a staggering 1,200% premium over the underlying litecoin price, casting doubt on the intelligence of its investors and the idea that the cryptocurrency market has matured since bitcoin’s 2017 boom and bust.

ELSEWHERE

Whistleblower Kidnapped in Ukraine After Accusing Crypto Firm of Exit Scam [CoinDesk]

California Man Pleads Guilty in $722 Million Crypto Fraud Plot [Bloomberg]

New Crypto Derivatives Let You Bet on (or Against) Tether’s Solvency [CoinDesk]

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