Are you curious about the latest in the crypto world? Here’s a rundown of today’s key trends and events affecting Bitcoin prices, blockchain technology, DeFi, NFTs, Web3, and crypto regulations.
Ethereum trails Bitcoin since Fed’s September rate cut amid weak institutional demand: Kaiko Research.
Since the U.S. Federal Reserve's 50-basis point rate cut last month, Bitcoin's price has increased by 14%, briefly surpassing $69,500 on Monday. This rise has been attributed to strong inflows into exchange-traded funds (ETFs) and increased risk sentiment. While Ether has also benefited from these macroeconomic factors, it continues to underperform Bitcoin, showing a more modest increase of around 12% since the Fed's rate cut on September 18.
Furthermore, the ETH/BTC ratio has dropped to its lowest point since April 2021, falling below 0.04 in October, according to a report by Kaiko Research released on Monday. The report emphasized that this decline underscores Ethereum’s slower rate of institutional adoption when compared to Bitcoin.
Kaiko Research analysts attribute the ongoing performance gap between Ethereum and Bitcoin primarily to Bitcoin's first-mover advantage with institutional investors. They highlighted that open interest in Bitcoin CME futures has recently reached record highs, while Ethereum futures on CME remain comparatively low at 7,300 contracts, representing a notional value of $970 million.
"Demand for Ethereum has also been weak in spot markets. In October, Ethereum underperformed most altcoins in trading volume. The volume gap between Ethereum and the top 50 altcoins has reached its widest margin since March," noted the Kaiko analysts.
Transak disclosed that a data breach had affected nearly 100,000 users, and Stormous ransomware gang claimed responsibility.
Transak, a Miami-based fiat-to-crypto payment gateway used by platforms such as Metamask, Trust Wallet, Coinbase, and Ledger, announced on Monday that it had experienced a data breach impacting 1.14% of its users.
In a blog post, the company explained that an attacker gained unauthorized access to one of its employee’s laptops through a sophisticated phishing attack. Using the compromised credentials, the attacker could log into the system of a third-party KYC vendor Transak uses for document scanning and verification services.
The breach exposed sensitive personal data, including names and other personally identifiable information (PII). However, Transak, a non-custodial on-ramp, confirmed that no assets or financially sensitive data such as social security numbers or credit card information were compromised.
With over 5 million users, Transak reported that 92,554 users were affected by the breach. "We are reaching out to all of these users to provide clarity," CEO Sami Start stated in an email to The Block. The company also cooperates with law enforcement. It has notified data protection authorities, including the Information Commissioner’s Office (ICO) in the UK and regulators across the EU and US, with further analysis ongoing for other regions.
Hedge funds side with 'Trump trades' in equities, says JPM
Global hedge funds have exhibited "a strong preference" for stocks that are expected to perform well in the event of a victory by Republican presidential candidate Donald Trump, according to a note from JPMorgan released late last week. The analysis highlights how market positioning is shifting ahead of the election.
JPMorgan noted that "net flows year-to-date have been closely correlated with Trump's election odds," adding that there is potential for disappointment and market reversal if those odds decline in the coming weeks.
In a Reuters/Ipsos poll released on Tuesday, Democratic candidate Kamala Harris led Trump by a narrow margin of 45% to 42%, with the gap between the two candidates remaining stable. However, other national polls have shown that the race is tightening.
In online prediction markets, Trump has taken the lead, with a 60% chance of winning the election on Polymarket.
In recent weeks, portfolio managers have purchased assets in sectors likely to benefit from a Republican government, according to JPMorgan’s positioning intelligence unit, which tracks hedge fund portfolios. At the same time, hedge funds have been selling assets expected to perform well under a Democratic administration. For example, JPMorgan highlighted that stocks in the renewable energy sector were sold off quickly recently as Trump’s election odds increased.
Trump's energy policy platform opposes President Joe Biden's clean energy agenda, favouring traditional industries.
Crypto Employee's Use of Laptop Outside of Work Cited in Data Breach Affecting 93K Transak Users
A data breach affecting approximately 93,000 unique users has been traced to an employee's laptop use for non-work-related activities, and a ransomware group is now attempting to negotiate with the targeted company.
Transak, an "onramp" platform used by several prominent blockchain companies to facilitate cryptocurrency purchases, disclosed the breach in a blog post on Monday. The compromised data was reportedly limited to "names" and "basic identity information."
In an interview with CoinDesk, Transak CEO Sami Start confirmed that the breach impacted 93,000 individuals, with exposed data including passports, ID cards, and selfies submitted for identity verification with crypto financial products.
Start categorized the incident as "mild to moderate," noting that no highly sensitive information was compromised, reducing the overall risk. According to the company, only 1.14% of its user base was affected.
"There were no bank statements, social security numbers, credit card details, or even email addresses and passwords accessed, which significantly reduces the severity of the breach," Start explained.
BIS report highlights risks in traditional finance’s move toward tokenization
The Bank for International Settlements (BIS) released a report on Monday titled "Tokenization in the Context of Money and Other Assets: Concepts and Implications for Central Banks," which explores how tokenization could transform the financial sector and impact the role of central banks.
The report highlighted that tokenization offers substantial benefits, including lower transaction costs and faster transaction processing, which has attracted the attention of institutional investors. However, the BIS, which plays a key role in ensuring liquidity for global central banks, also cautioned that these benefits come with significant risks and challenges.
The report outlined risks associated with tokenization, such as potential governance and legal framework issues, as well as credit, liquidity, custody, and operational risks. These risks could emerge in different forms than those encountered in traditional market infrastructures, making it essential for central banks to conduct a careful evaluation.
The BIS stressed that "central banks need to assess the trade-offs and the appropriate balance between different types of settlement assets in token arrangements" while ensuring that tokenization systems are "subject to sound regulation, supervision, and oversight."
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