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ALPEX Global Weekly Newsletter — January Week 4

In this week’s newsletter — we discuss Rio de Janeiro investing 1% of its Treasury in Bitcoin, just as Bitcoin drops below the $35,000 mark on Saturday as global market volatility spreads to cryptocurrencies. We have these stories and more in this week’s newsletter.

To Begin — A global selloff in equities spreads to cryptocurrencies, causing bitcoin to drop below $35,000 on Saturday. Despite a selloff of perceived riskier assets, Bitcoin prices hit levels not seen since August on Saturday. Prices have fallen more than 50% from their record high in November.

The price of bitcoin dropped as low as $34,042.78 Saturday, a drop of 7.2%, before paring losses. Ethereum ETHUSD, -2.23% fell 12% as well. Reports estimate that Solana and Cardano each fell by at least 17%.

On Friday, stocks plunged following a volatile session on Wall Street, with stocks swinging from early gains to a selloff, as investors followed this week’s pattern of selling rallies, pushing the Nasdaq Composite into correction territory.

In other news — was hacked for $34 million as a result of a 2FA compromise. A recent hack on was revealed in a statement on the company’s website today. It indicates that 483 of its users were affected and that unauthorized withdrawals of more than $15 million of ETH, $19 million of BTC, and $66,200 in “other currencies” occurred. Analysts predicted losses of over $34 million before made its announcement.

As a precaution, the company revoked all customer 2-factor authentication tokens before asking customers to create their tokens again. Users should be notified about unauthorized withdrawals by contacting support within 24 hours of registering a withdrawal address.

Lastly, but by no means least — The Mayor of Rio de Janeiro announced Thursday that the city plans to invest 1% of its Treasury reserves in Bitcoin. Mayor Eduardo Paes was a keynote speaker at the Rio Innovation Week and discussed how Rio de Janeiro was aspiring to become a cryptocurrency hub. A small portion of Treasury reserves will be held in Bitcoin as part of this plan. Furthermore, additional discounts will be offered to property taxpayers paying in Bitcoin. The Brazilian government plans to publish a decree establishing a working group to address issues surrounding Bitcoin investments.

Every day, ALPEX Global provides market wrap. The following analyses are based on keeping an eye on the markets and what we anticipate.

As fears of a Russian attack on Ukraine sparked a sell-off of riskier assets, Bitcoin, the largest cryptocurrency by market value, fell over 7% to its lowest since July. Bitcoin traded last at $33,820, down 6.8% from its November all-time high of $69,000.

The price of Ethereum fell 11% to its lowest level since 29 July. It last traded at $2,253. In addition to bitcoin, a number of smaller cryptocurrencies also fell. During premarket trading, the mining companies Riot Blockchain, Marathon Digital, and Bit Digital all fell between 7.3% and 12%, while the crypto exchange Coinbase Global fell 7.8%.

During this slump, bitcoin is moving like never before in tandem with stocks, but that link-up could still bring some relief if shares rebound.

During the recent pandemic, speculative assets were boosted by the prospect of Federal Reserve stimulus easing, causing cryptocurrencies to drop from their highs. A total of more than $1 trillion has been erased from digital coins since a November high.

Cryptocurrencies are currently trudging through a dark stretch, but we will continue to monitor events and keep you informed.

*Disclaimer* Investment in cryptos carries various risks and is not suitable for all investors. Be sure to do your research thoroughly before making any decisions to invest.

At its lowest point, Bitcoin fell below $35,000, which represents a severe downturn for the crypto market. In our analysis of the bull and bear cycles in various crypto markets, this retracement resembles March 2020 and September 2017, but from a macro perspective, BTC is now likely in the middle or late stages, as the overhead hedging discs need time to digest, while the Fed’s rate hike expectations may accelerate BTC into a cyclical bear market.

As reported by Cryptographer, Metamask has a critical vulnerability that could lead to the disclosure of IP addresses as well as the loss of assets in Alexandru Lupascu’s wallet. The Metamask wallet, which has over 2 million active users, has been found to have a vulnerability by a security analyst and cryptographer who co-founded the OMNIA protocol. Lupascu’s research indicates that a hacker can create an NFT and gain access to a user’s IP address by transferring ownership of the NFT, while a hacker can target someone’s private address for as little as $50.

That concludes our weekly newsletter. Thank you for reading. We hope it was insightful and helpful. Stay tuned for more exciting news about crypto and blockchain next week.

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