Bitcoin struggles to rebound, update on WazirX cyberattack, market losses update, and more…

The cryptocurrency market and its largest digital asset, Bitcoin, have been struggling to make gains this month, Bloomberg reported. The slide has been noticeable despite an overall upturn in global stocks, which have climbed back up to record highs after slumping due to concerns over a recession in the United States economy.

Bitcoin hit a record of $73,798 in March 2024, fueled by US Federal Reserve moves and activity in US exchange-traded funds (ETFs), but these subscriptions subsequently cooled. More recently, the upcoming 2024 US elections are also a looming uncertainty, as Democratic candidate Kamala Harris is yet to detail her stance on digital assets. Rival Donald Trump has declared himself pro-crypto.

As of 1 pm on August 20, Bitcoin rose 3.2 per cent to $60,982.31; and Ether rose 2.2 per cent to $2,674.77.

Bitcoin Struggles to Rebound

According to the Bloomberg report, Bitcoin has slipped close to 9 per cent so far in August 2024. The world’s largest cryptocurrency is lagging a gain of almost 1 per cent in MSCI Inc.’s world share index and a jump in gold to all-time highs.

A Bloomberg global bond gauge has added nearly 2 per cent over the same period.

Analysts told the publication that the $12 billion worth of crypto seized by the US government is at “risk of disposal” and is a challenge. Arkham Intelligence tracked blockchain data to note that the US moved $600 million worth of confiscated Bitcoin to a wallet operated by Coinbase, the report added.

Possible US government sales are resulting in this temporary downward price pressure. We expect this gap to close soon,” Khushboo Khullar, venture partner at Lightning Ventures told Bloomberg.

Big Crypto Selloff Looms

On August 5, a gauge of the top 100 digital assets showed its worst performance since November 2022 as equities sank on fears of a US economic downturn and lower yen “damaged risk appetite worldwide”, the report said. However, despite expectations for the economy that have since turned better, the crypto market is still flailing.

The report noted that CryptoQuant figures showed that Bitcoin perpetual futures (with no set expiry) have seen negative activity (funding rate cost for positions), where fast-money speculators usually engage in these contracts, showing low appetite.

WazirX Says Laptops Were Not Compromised

Meanwhile, in a blog post on August 19, Indian cryptocurrency exchange WazirX said they have recieved a “clean chit” from a forensic analysis conducted by Google subsidiary Mandiant Solutions.

“Weeks after WazirX was targeted by a cyberattack resulting in the theft of digital assets exceeding $230 million ( ₹2,000 crores) from one of their Multisig wallets, they have received a clean chit from Mandiant Solutions,” the post read.

The cybersecurity firm was engaged to conduct a forensic analysis and determine whether any of the three laptops used by WazirX team members to perform transactions were compromised.

In its report, Mandiant said, “We did not identify evidence of compromise on the three laptops that were used for signing transactions.”

The wallet that was attacked was managed using Liminal’s digital asset custody and wallet infrastructure. A spokesperson for WazirX said, “We have full faith in the investigating agency and shall cooperate with them to the fullest extent. We are actively working on recovering the stolen funds and are hopeful that those responsible will be brought to justice.”

WazirX’s Multi-signature Wallet Breached

In July, WazirX said it halted withdrawals from the platform after discovering that one of its multi-signature wallets had been breached.

“We’re aware that one of our multisig wallets has experienced a security breach. Our team is actively investigating the incident. To ensure the safety of your assets, INR and crypto withdrawals will be temporarily paused,” the exchange said on social media platform X (formerly known as Twitter).

WazirX’s total assets stood at about $500 million in June, according to its most recent proof-of-reserves report.

(With inputs from Bloomberg)