Weekly Crypto Review: Market Rollercoaster – Bitcoin’s Struggle, Rise and Fall of NFT Collections, and DeFi Sector Under Hackers’ Attack

The past week has been filled with exciting developments in the world of cryptocurrencies and technology. From major fluctuations in Bitcoin's value, significant regulatory news in the UK, to major changes in the NFT and DeFi markets, the world of cryptocurrencies and technology has been in motion. Some players have taken hits, while others have achieved great successes, leading to shifts that will reflect on the future of the crypto space.
Stay with us as we walk you through the key events of the week. We cover weekly key developments in the world of crypto assets and blockchain that have influenced price action and general sentiment.

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This week in crypto

Illustration: Lenka Tomasevic

Investment developments

Bitcoin, the frontrunner of the digital currency pack, has suffered a substantial dip of 10% in its market value, leaving the question of whether its stronghold at $25,000 will prevail. With hawk-eyed investors and traders tracking the market’s every move, the fate of Bitcoin’s price stabilization and recovery from this critical point hangs in the balance.

The current price activity and overall market sentiments are vital determinants in the projection of Bitcoin’s trajectory and whether it will regain its upward trend.

The UK tax authorities, HMRC, are contemplating new legislation that will empower them to seize bitcoins from firms that do not meet their cryptocurrency tax liabilities. The government is considering various options to allow the tax agency access to online wallets as part of its drive to revamp tax collection in the digital era. According to The Telegraph, this move is a small part of a larger scheme to modernize tax collection methods.

In a consultative document, HMRC suggests that if virtual currencies become more popular for online transactions, this could extend to business cryptocurrency wallets.

This development puts even more strain on BTC/USD prices, causing some investors to have doubts about its future prospects.

Finally, according to data from CoinMarketCap, the global crypto market cap stands at $1.10 trillion, a 2.60% increase from May 11 to 12. Meanwhile, the total crypto market volume over the last 24 hours (May 12) is $42.52 billion, a 9.15% decrease.

The Crypto Fear and Greed Index, which uses six measurements to asses the current sentiment in the markets, still shows the emotion of neutral with a value of 49. The index rates market emotions from 1, extreme fear to 100, extreme greed.

Fear and greed index

Crypto Fear & Greed Index. Source: Alternative

The crypto markets are dominated by a neutral emotion, closer to fear, which is evident by the drop in price we’ve seen in BTC and other currencies.

Crypto Exchange developments

Tether, the controversial company behind the world’s largest stablecoin, has reported a staggering net profit of $1.48 billion, leaving them feeling “very optimistic for the future.” In a recent blog post, Tether revealed its 2023 Q1 assurance report, showcasing their reserves reaching an all-time high of $2.44 billion. While only 1.8% of their reserves were held in Bitcoin, the majority was invested in US Treasury Bills and cash equivalents.

Although their report was prepared by accounting firm BDO Italia, it has yet to be independently audited. Tether’s CTO, Paolo Ardoino, expressed his thrill for the company’s success and the surplus of their reserves. With a market cap of $82.5 billion, USDT is the most traded cryptocurrency, with traders using it to enter and exit trades without relying on traditional banks or fiat currency. It seems that Tether’s stablecoin has set a new standard for digital finance.

Web3 developments

The Milady non-fungible token (NFT) collection saw a meteoric rise in value thanks to an unexpected nod from Twitter titan Elon Musk, drawing comparisons to his treatment of the infamous dogecoin (DOGE). The collection itself, made up of over 9,000 wide-eyed, childlike images, has courted controversy due to its creator’s questionable past.

Despite this, prices skyrocketed by a jaw-dropping 60% following Musk’s tweet featuring a Milady NFT adorned with the words, “There is no meme, I love you.” In the aftermath, the collection quickly shot to the top of NFT marketplace OpenSea, commanding prices of up to $13,700 worth of ether (ETH) per NFT. Trading volumes went through the roof as well, surging by a staggering tenfold in just 24 hours. Looks like Milady is having quite the moment in the spotlight!

Meanwhile, Pudgy Penguins has recently secured a whopping $9 million in a seed round with lead investor 1kx as they strive to expand their Web3 intellectual property. Ever since their inception in 2021 and their acquisition by current CEO Luca Netz in April 2022, the popular NFT brand has been working diligently to widen their IP reach. Boasting over 3 billion views for their Pudgy GIFs and hundreds of thousands of Instagram followers, Pudgy Penguins has made a significant impact in the NFT space. Their 40,000+ member-strong Discord community is a testament to their success and the sense of belonging they have created.

While speaking about their brand, Netz emphasized that Pudgy Penguins isn’t just another NFT project, it’s a community-driven brand that provides crypto and non-crypto natives with enjoyable experiences, content, and products. Their 8,888 Pudgy Penguin NFTs, featuring adorable penguins in various outfits, are owned by 4,592 lucky individuals.

With this latest fundraise, Pudgy Penguins is well on its way to becoming the leading Web3 IP brand of tomorrow, said Netz. Vi Powlis, the head of investor relations, added that this accomplishment showcases the company’s unwavering resilience in the face of a bear market. Pudgy Penguins is undoubtedly a transcendent brand that has revolutionized the NFT world with their unique vision and community-driven approach.

DeFi developments

Hundred Finance, a multi-chain lending protocol, has been dealt a major blow after a devastating hacking attack resulted in the theft of approximately $7 million worth of crypto. The nefarious attacker was able to gain access to the funds through Optimism, an Ethereum layer-2 blockchain. Despite the setback, Hundred Finance is determined to reach a resolution with the hacker, expressing their hope that they will come forward to engage in dialogue.

The protocol has also taken proactive steps to mitigate the vulnerability that was exploited, urging Compound V2 fork users to reach out for information sharing. Meanwhile, Uno Re, a decentralized finance risk-based insurance and reinsurance protocol, has offered to lend a hand in tracing the stolen funds and bolstering security measures moving forward.

Tech developments

Cardano’s blockchain just got an exciting upgrade – Hydra Head! This nifty scaling tool has been unleashed onto the mainnet by its ingenious developers, promising lightning-fast transactions and significantly lower fees. Acting as a mini ledger shared among a small group of participants, each Hydra Head propels DeFi protocols to new heights, adding specialized and complex features atop Cardano’s already impressive platform. And this is only the first of many Hydra Heads to come!

This year, Cardano’s DeFi-focused upgrades have been nothing short of impressive, from the launch of decentralized stablecoin djed in January to IOG’s groundbreaking proposal for improving cross-chain transactions in February. The future is certainly bright for Cardano, and we can’t wait to see what other exciting innovations lie ahead!

In other news, Threshold Network and cross-chain token protocol Wormhole have joined forces to make the movement of a tokenized representation of bitcoin (BTC) seamless across a whopping twenty blockchain ecosystems! Wormhole proposed the idea to Threshold in mid-April, with the aim of helping tBTC dominate on-chain DeFi ecosystems. Thanks to overwhelming community support and a successful governance vote on April 29th, the proposal is now a reality.

For those not in the know, tBTC is a Bitcoin-backed token that opens the door to Ethereum and cross-chain DeFi ecosystems. Every tBTC token is 100% backed by one bitcoin held in reserve. With the Wormhole integration, transferring tBTC will be possible on both Ethereum Virtual Machine (EVM) chains like Arbitrum, Optimism, and Polygon, as well as non-EVM chains such as Solana, Aptos, Sui, and Cosmos. It’s an exciting time for crypto enthusiasts who can’t wait to see how this collaboration will change the game.


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