Ransomware & Crypto’s Meltdown
Oil Supply Chains Find Stability While Bitcoin Crashes
Quick Facts From Around The Market
💰🤯 Retirement account balances hit an all time high this week with a number of 401(k) and IRA millionaires hitting a record. The overall average 401(k) balance is now $123,900 in the first quarter of 2021.
🚗⚡️ Ford’s new 5–150 Lightning pickup is one of their first electric trucks and has already attracted more than 20,000 preorders for the car.
💸📉 Jobless claims fell more than expected this month. There were only 444,000 new jobless claims this month, which is a pandemic record low.
🧬🇺🇸 The United States is now reporting fewer than 30,000 Covid cases per day for 5 days straight. The country is also averaging around 1.8 million vaccinations per day.
🌴🤪 Lumber futures had a crazy day this week with a 10% swing in one session. Lumber is still up 37% since the beginning of the year though.
Colonial Pipeline Pays Ransom to Hackers
The largest fuel pipeline operator in the country, Colonial Pipeline, confirmed this week that it paid $4.4 million in a ransom to hackers that took over their computer system and prevented the company from accessing any of the systems.
Colonial Pipeline disclosed that the attack occurred around 6am on the morning of May 7th, when the company’s entire system was taken offline. The pipeline which was shutdown, accounts for 45% of the gas consumed on the East Coast, and halted gas deliveries for about a week, leading to gas shortages and panic buying. On Wednesday, 9,500 gas stations on the east coast were out of gas. Half of the gas stations were sold out in DC and 40% in North Carolina.
In order to restart the system and resume business operations, Colonial Pipeline decided the best path forward was to pay the ransom, particularly since the company was nervous that the hackers could have gained access to operational controls.
The CEO, Joseph Blount told the Wall Street Journal that he authorized the payment since they were unsure of the damages that the ransomware caused and did not know how long it would take to get the systems back online.
The ransomeware group responsible is known as DarkSide, which rents out its ransomware software to others to preform the attacks. DarkSide typically request their payment in cryptocurrencies with this attack including a demand of 75 bitcoins.
Crypto Craziness
On Wednesday this week, Bitcoin dropped 30% to almost $30,000. This comes as there has been a major sell-off in the crypto markets. The low point hit $30,001.51, a price not seen since January which represented a 40% decline. As the day continued, Bitcoin rebounded over $38,000, however it’s unclear if the worst is already over.
The sharp drop comes after Tesla made their announcement to not accept the coin for purchases of cars due to environmental impacts of mining, which derives a large amount of energy from coal-fired power plants. The gains Bitcoin had seen was largely inspired by Tesla’s original announcement to accept the coin, which pushed it up to its record high of $64,829 in mid-April.
This announcement to end Bitcoin payments came three months after Tesla bought $1.5 billion of the cryptocurrency and would start accepting payments.
In addition to Tesla’s announcement, three Chinese banking and payment regulating bodies issued a statement warning companies against using cryptocurrencies for business. This is a major issue as China is one of the larger adopters of crypto and accounts for a majority of mining related to the cryptocurrency.
Although the crash may seem like validation for crypto-skeptics, Bitcoin is up 30% year-to-date and 300% in the last 12 months.
JPMorgan Chase launches new Health-care Business
JPMorgan’s announced the launch of a new in-house healthcare company, Morgan Health, which is aiming to serve JPMorgan’s 165,000 US employees and improve the quality of medical aid that they receive.
This comes in the wake of the disbandment of the joint health-care venture by Amazon, Berkshire Hathaway and JPMorgan. After moving away from prior commitments and abandoning their ambitions healthcare company, all three companies to try to provide better more affordable health benefits to their employees.
JPMorgan’s business will be led by Dan Mendelson, a seasoned health-care consultant who worked in the Clinton Administration before founding Avalere Health. The business unit will have $250 million to make venture capital investments in companies that have innovative and promising healthcare solutions, which isn’t that large of a number considering that JPMorgan spends $1.3 billion annually on healthcare for their employees.
JPMorgan’s foray into healthcare isn’t surprising, as companies have been trying to crack the American medical system for a long time. It’s no wonder, when health insurance costs the country $3.8 trillion in 2019 .
