Welcome back to Distributed Ledger. This is Frances Yue, reporter at MarketWatch.
The crypto sector has matured a lot, but hacks still happen.
On Monday, Solana-based decentralized exchange Cypher lost about $1 million in crypto in a security incident. The platform has frozen the smart contract and offered a roughly $120,000 white-hat bounty for return of the funds from the attacker.
Last week, another decentralized exchange Curve Finance saw over $70 million worth of tokens stolen in a hack. The platform has recovered over 70% of the stolen funds as of Aug. 7, according to PeckShield.
With hacks still happening periodically in the crypto space, is it safe for institutional investors to come in? I spoke to Chen Arad, co-founder and chief-experience officer at Solidus Labs, a crypto risk surveillance company.
Find me on Twitter at @FrancesYue_ to share any thoughts on crypto or this newsletter.
Crypto hacks and institutional adoption
“Are we ready for institutions? Just looking at everything that happened, probably the answer is no,” Arad told Distributed Ledger in an interview. “But the map comes with the territory.”
As financial heavyweights such as BlackRock
BLK,
Fidelity and BNY Mellon expand their footprints in the crypto market, they could help raise the standard of security for the industry, Arad noted.
“Ultimately real liquidity, big liquidity, institutional liquidity flows to safety and stability,” Arad said. “Those funds are only going to flow to places that can assure to a sufficient degree that these sorts of things don’t happen.”
Arad said for the past several years, he has seen constant improvement of security in the crypto space.
“I don’t see as many the kinds of exploits I used to see two three years ago today,” Arad said.
Investors are learnings to put their assets into platforms that are more tested and regulated, while crypto projects are bringing in new solutions, according to Arad.
“I think at the end of the day, part of it is just battle testing the technology and recognizing there are a lot of problems that people may have not anticipated and constantly trying to solve them,” Arad said.
Bitcoin halving
Crypto investors hoping that bitcoin’s coming halving event could trigger a rally of the coin’s price may be disappointed, according to Kaiko Research.
Bitcoin has been stuck under $30,000 for the past few weeks, but a past catalyst for its rally might not work this time, Kaiko Research said on Monday.
Bitcoin halving refers to a process where a block reward is given to crypto miners after every 210,000 blocks are mined, or about every four years. The crypto has gone through three halvings in history, and the next one is expected to happen in April or May next year.
Historically, bitcoin has seen price appreciation take hold in the months after halvings, but the rallies have gradually diminished over the years, as the crypto market matures, according to the analysts at Kaiko.
“Before previous halvings, BTC saw significant volatility in the months leading up to the event. However, so far, there hasn’t been a notable increase in leverage or trade volumes, which may indicate that traders are not heavily positioning for the upcoming halving at this stage,” the analysts wrote.
I wrote more about it here.
Crypto in a snap
Bitcoin
BTCUSD,
gained 1.3% in the past seven days and was trading at around $29,438 on Thursday, according to CoinDesk data. Ether
ETHUSD,
edged up 0.6% during the same period to around $1,850.
Must-reads
- SEC Seeks to Appeal Ruling That Ripple XRP Isn’t a Security (Bloomberg)
- PayPal is trying to drag its 435 million users into the $120 billion stablecoin market — here’s why (CNBC)
Read the full article here
