Crypto space hot news review dated 24.05.2021

It was a difficult week for the cryptocurrency community, because the rollback of Bitcoin to the $30K mark brought newcomers to a swooning state, enthusiastic schadenfreude of opponents and the joy of buying on the failure of professional players.

News digest of the past week

Almost the entire past week was devoted to two topics: the fall of Bitcoin, and the loss of the altcoin market. Driven to hysteria, newcomers to the cryptocurrency space day and night did not take their eyes off the price indicators of the BTC, calculating losses. At the same time, the media was filled with toxic statements that the Bitcoin bubble burst, and it (once again) can be put an end to. But the former and the latter were far from the truth. Bitcoin, like the Phoenix bird, has started to recover.

But let’s take a look at what has happened over the past seven days.

• The price of Bitcoin has fallen to $30,000!

The carnage in the cryptocurrency market began on the morning of May 19, when BTC fell to the level of $38,000 at the opening of the Asian market. By the evening, the session in the US came to an end with the closing price of Bitcoin at $30,000 on Binance.

The drop in the value of the king of the crypto market was quite large, as a result of which altcoins sank by more than 50%.

This, of course, was a real slaughter for many new traders and investors who, in a state of panic, sold the Cue Ball under the pressure of this downtrend. Some traders were hoping for a rebound on the morning of May 20, but they ran out of patience, which led to the liquidation of hundreds of thousands of positions worth $8 billion.

As usual, in such an extreme situation, some crypto exchanges like Binance or Coinbase were unavailable due to increased traffic from users who all wanted to access their accounts.

The collateral victim of any Bitcoin drop, of course, is altcoins, which paid dearly for this drop – by more than 50%!

With such a significant drop in the price of BTC, it is safe to say that we have reached the bottom of the cryptocurrency market.

• Payments for ransomware exceeded $81 million in the first quarter of 2021

Chainalysis ‘ semi-annual report shows that the total number of cryptocurrencies paid to ransomware addresses increased by 337% in 2020, with Russia-linked cybercriminals mostly (of course!) to blame.

A report on crypto-crimes published by Chainalysis in February of this year showed that victims of ransomware programs paid almost $350 million in cryptocurrencies in 2020. However, other ransomware addresses have since been discovered, and a new report estimates the damage at more than $406 million.

This means that the value of the cryptocurrency obtained as a result of ransomware attacks in 2020 has increased by 337% since 2019. And the rise in ransomware attacks shows no sign of abating. Already in 2021, the addresses of ransomware programs received cryptocurrencies worth more than $81 million. This, again, is considered a minimum, and this figure is likely to increase as more addresses are discovered.

A factor driving the growth was the emergence of new varieties of ransomware in addition to older varieties that use larger amounts. Many strains use the Ransomware as a Service (RaaS) model. This assumes that the attacker “rents” a strain of ransomware from their creators, who in return receive a share of the ransom from successful attacks.

The report also shows that the vast majority of the proceeds from the most common ransomware strains went to Russian-affiliated (well, without Russia) cybercriminals, mainly due to the Russian market for the Hydra darknet. This is something the US government is already taking seriously, announcing punitive measures last month. However, to solve this problem, it will probably require the cooperation of companies from the entire crypto sector, and not just a wild desire of the US to annoy the Russian Federation.

• Bitcoin Recovers after Black Wednesday

The issuer of crypto asset products Stack Funds has published a report stating that Bitcoin will soon recover.

Bitcoin fell 30% on Wednesday, touching lows of $30,000 not seen since January, and represents a 54% drop from an all-time high in April. All other major cryptocurrencies also suffered, as the total market capitalization of all coins fell by $400 billion in an hour on a day that became known as the”Black Environment of Cryptocurrencies”.

However, the Stack Funds analysis showed a more positive note. “We think this is a good reset for the euphoric conditions we’ve had in recent weeks”.

This week, the dominance of the BTC also declined, reaching a three-year low of 39.66%. Dominance has been falling since the beginning of this year, and has been falling sharply since March. At the end of April, it fell below 50%, for the first time since July 2018.

Although the dominance of Bitcoin is falling, the total capitalization of the cryptocurrency market is growing, according to CoinMarketRate, from the beginning of March to May 12 this year by about 80%. This suggests that the majority of investors ‘ capital remained anchored in the cryptocurrency markets, and the drop in Bitcoin dominance was just a sign that traders are looking to maximize opportunities when the altcoin season has arrived.

This is evidenced by the impressive progress achieved by Ethereum during this time. In fact, searches for the word “cryptocurrency”have been growing since the end of March, and last week reached the highest level since January 2018, according to Google Trends. However, during the fall on Wednesday, Google Trends revealed that searches for the query ” Should I sell my cryptocurrency?» in the US, they grew by 400%.

However, Bitcoin’s dominance appears to have improved on Wednesday: it rose by 11% and closed the day by almost 45%. The Stack Funds report says: “We expect investors to return to Bitcoin as uncertainty increases and markets experience another reset. Hence, there should be a rebound in Bitcoin’s dominance, which will further support its value in the short term”.

• SEC Strengthens Cryptocurrency Regulations

The Securities and Exchange Commission (SEC) will be impartial and strict in enforcing the rules of the crypto space.

Gary Gensler, chairman of the Securities and Exchange Commission (SEC), confirmed that the regulator will take a careful approach to ensuring compliance with the rules regarding cryptocurrencies. Gensler was sworn in last month, and many in the cryptocurrency sector were eager to see him lead the commission.

Speaking at the financial industry regulator’s Annual Conference in 2021, Gensler said that the regulator will do everything in its power to ensure that violators of the law are forced out of the crypto sector. To this end, the commission will be persistent and strict in the implementation of the rules of the cryptocurrency.

“When we think about law enforcement, for me the idea is pretty simple: we need traffic rules and a police officer in the topic to protect ordinary investors and fulfill our mission, ” he said during the virtual event.

Gensler said the SEC is investigating all kinds of misconduct in the sector.

“It also means that everything that matters to all parts of our mission, whether it’s deception by private funds, offer or accounting fraud, insider trading, market manipulation, failure to act in the best interests of retail customers, reporting violations, best execution, and trust management, these cases will be brought to an end”.

He also acknowledged that the market is evolving along with technology. The Chairman of the Securities and Exchange Commission noted that the commission is relevant, and will not have problems with the consideration of cryptocurrency cases related to FinTech and cybersecurity.

The chairman also suggested that additional investor protection is needed, which will be achieved by introducing more regulations on crypto exchanges. He added that the rules regarding exchanges will also apply to platforms that trade exclusively in Bitcoin, and do not require registration with the SEC.

Gensler had previously hinted at the same thing when he appeared before the House Financial Services Committee two weeks ago. He recommended adopting a framework for digital asset platforms established by the Commodity Futures Trading Commission or the SEC itself. He explained that this will help protect investors from fraud, and instill confidence in them.

Crypto platforms and companies have recently found themselves in a difficult position. The former were targeted by the Office of the Comptroller of the Treasury, and the latter by the Senate Banking Chairman.