Possible Black Swan in Sight for Cryptocurrencies and Bitcoin

Welcome back to our weekly report on the most important and significant events to keep in mind regarding the financial markets and cryptocurrencies.
Get ready, get comfortable, and have a hot drink because today we have plenty of material to talk about.
Let's start with the most relevant economic events in the United States, since in recent months all eyes have been on it, and the markets are moving waiting for news from that country.

Monetary Policy and Economic Data in the United States
During this period, the US economy showed mixed signals, both bearish and bullish, which influenced the expectations of traditional and crypto investors in their trading:
Persistent Inflation: The Consumer Price Index (CPI) for January registered an increase of 0.5% monthly and 3.0% annually, exceeding market expectations (bearish data). This increase was driven by increases in food, services, and energy, which had a negative impact on the markets, and after this news, we see that $BTC, as a risk asset, remains more than 15% below its historical maximum, while the S&P500 registered a new maximum last week.

Labor Market Resilience: Initial unemployment claims stood at 213,000, below estimates, indicating a robust labor market. We already know that this is one of the data that the Federal Reserve looks at the most for its policies in the coming months (bullish data).

Federal Reserve Position: Jerome Powell, president of the Fed, emphasized the need to maintain a restrictive monetary policy due to inflationary pressures, suggesting that interest rates could remain high for longer. (bearish data).
Despite the uncertainty, stock futures showed upward trends, driven by significant corporate investments, such as Apple's commitment to invest $500 billion in domestic operations.

Another event that could mark big news this week is next Wednesday, the 26th. Attention is focused on Nvidia and the technology sector due to Nvidia's results presentation on Wednesday. Revenue growth of 72% and an increase of 62% in earnings per share for the fourth quarter were anticipated.

These results may be the catalyst that moves bitcoin and cryptocurrencies out of the range they have been in for the last 3 weeks (between 95k-97k), and surely, in traditional markets, it will be a push to reach historical highs again.

Regarding geopolitical events and their impact on crypto and traditional markets, it is worth mentioning the following events that may bring movements in the medium and short term.
German Elections: The victory of the German conservatives suggested possible economic reforms, including the modification of the "debt brake", which could increase public and military spending, strengthening the euro and benefiting companies in the defense sector. This news from the United States was very well received, as it opens up the possibilities for President Trump to generate more allies in Europe and carry out his reforms.
We will be waiting for the development of this news that may have repercussions in the war between Russia and Ukraine. (Remember that any event that could mark the end of the war can be great news for cryptocurrencies and markets in general, so in the future, this could be positive news).

Let's now talk about the blockchain and cryptocurrency news that made the news last week.
One of the most important events (although it went unnoticed by all the noise in the Bybit news) was the approval of a stablecoin by the SEC: The United States Securities and Exchange Commission approved the launch of $YLDS, a stablecoin that generates interest backed by traditional assets such as Treasury bonds. This decision marks a milestone in the integration of digital assets into the regulated financial system. (although it is bullish news, the market did not show any interest in this event).

Another key event was the withdrawal of the lawsuit against Coinbase: The Trump administration continues to be in the news in the crypto world and this time it was due to the withdrawal of the SEC lawsuit against Coinbase, which indicates a shift toward more favorable policies for cryptocurrencies in the US. Although the crypto sector did not show a movement due to this news, it is expected that in the long term, it will bring positive repercussions.

Let's now talk about the big news and possible black swan that may reach all cryptonauts in the next few weeks or days (even hours), and that is that on February 21st, Bybit, one of the main cryptocurrency exchange platforms based in Dubai (and to put this into perspective, Bybit is the second-largest Exchange in the entire ecosystem, bigger than Coinbase even), suffered a cyber attack that resulted in the theft of approximately $1.5 billion in Ethereum (400k ETH). This incident has been classified as the largest digital theft in the history of cryptocurrencies and yet, after the news, no movements greater than 2% were recorded in the crypto market that day.

Details of the Attack
The attack occurred during a routine transfer of funds from a cold wallet (offline storage) to a hot wallet (used for daily operations). The attackers managed to manipulate the signing interface, displaying the correct address while altering the underlying logic of the smart contract, and as a curious fact, this could not have been done on the bitcoin blockchain, it is a vulnerability that they knew how to exploit in the ETH smart contracts. As a result, 401,000 ETH were transferred to an unknown address controlled by the hackers.

Bybit Response
After the incident, Bybit CEO came out to speak to calm the FUD that was being generated, Ben Zhou, assured users that the company remains solvent and that all customer assets are backed 1:1. In addition, Bybit is collaborating with cybersecurity experts to track the stolen funds and has offered a 10% reward of the recovered amount to anyone who helps recover the stolen cryptocurrencies. (If anyone was looking for a freelance job, here is an opportunity).

Let's do a summary of the most important cryptocurrency thefts of recent years.
Over the years, the cryptocurrency ecosystem has been the target of multiple attacks and surely, in the future, the most centralized protocols in crypto will always be attacked:

Mt. Gox (2014): One of the first and most notorious incidents, where approximately 850,000 bitcoins were stolen, valued at the time at around $450 million. (And which is still in the news today after several of the stolen funds were recovered and there has been talk for 2 years of the return of the assets to the affected users).
Coincheck (2018): Hackers stole $530 million in NEM from the Japanese platform, another sad event in centralization.

Ronin Network (2022): The Lazarus Group was identified as responsible for the theft of $600 million in Ethereum and USDC from the Ronin Bridge, used by the Axie Infinity game. Axie was a trending topic, reaching historic figures and establishing NFT games as a new market in blockchain technology.

Theories about the perpetrators
The crypto community and cybersecurity experts have speculated about the possible perpetrators of the attack on Bybit. Given the magnitude of the theft and the social intelligence tools that were applied, the Lazarus Group's history is related to similar incidents, it is suspected with a high degree of certainty that this organization could be behind the attack. However, to date, the identity of the perpetrators has not been officially confirmed and will probably never be confirmed. As a curious fact, it is worth emphasizing that these attacks by the Lazarus group and what is known about their assets so far have been to hold their cryptocurrencies, since the wallets continue to largely retain the assets stolen over these years. (hold until death)

As a closing to this news that has a bearish connotation, we want to close with something positive and that is that Bybit did not see problems or restrictions for users when withdrawing their assets from the Exchange.
After all this, we can only reflect on seeing decentralization as the best possibility to take care of our interests and our funds, that is why from Nudex, we want to invite you to never abandon the decentralized spirit that characterizes the crypto world.

Remember to create your account in Nudex and start trading now.