In the crypto market, the start of the new month brought some challenges. Investors are carefully considering the risks associated with the recent DeFi hack and a federal court decision regarding the classification of crypto assets as securities.
Bitcoin, according to Coin Metrics, remained relatively stable on Tuesday at $29,271.90, temporarily dropping to $28,800 earlier in the day. It ended July with a 3.93% decrease.
Ether, another significant cryptocurrency alongside bitcoin, experienced a 0.5% decline on Tuesday and closed July with a 3.35% drop. However, it faced additional pressure due to the recent exploit in DeFi platform Curve.
An analyst at investment firm eToro, Josh Gilbert, highlighted the importance of Ethereum in the DeFi space. Despite being a major project, Ethereum is still affected by issues like the Curve exploit.
Altcoins also experienced a decline after a federal judge’s ruling that classified certain crypto assets as securities regardless of the context of their sale. This contradicted a previous ruling regarding Ripple’s XRP. XRP, after recovering from earlier losses, was down 1.5%.
Other tokens mentioned in recent SEC lawsuits against Binance and Coinbase, such as those connected to Solana and Cardano networks, also faced initial pressure but ended up relatively unchanged.
DeFi giant hacked
In the DeFi segment of the market, smaller coins managed to recover their losses. Curve Finance’s native token, CRV, saw an 8% increase in the past 24 hours. Aave’s loss of 9% was reduced, while Compound and the Synthetix network’s tokens experienced 5% and 4% decreases, respectively.
Curve Finance, which operates on Ethereum, was exploited due to a bug in the programming language Vyper. The hacker targeted various liquidity pools and managed to drain around $100 million worth of cryptocurrency from the platform, including $20 million of CRV and ether.
Although the crypto market has been resilient, bitcoin volumes have significantly decreased despite its consistent performance. It has remained within a narrow range throughout July but has seen a 76% increase overall in 2023.
Gilbert believes that the initial optimism surrounding the Blackrock ETF has faded, leading to a slight downturn in bitcoin and most altcoins. Additionally, the ongoing issues with Curve have further contributed to the sell-off.
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