Anika Begay
A wallet linked to a major cryptocurrency theft two years ago exchanged $39.75 million worth of the DAI stablecoin for 16,892 Ethereum (ETH), according to Bloomberg, as the second-largest cryptocurrency plunged as much as 23% on Monday.
Cryptocurrency Hacker Exploits Ethereum Crash
For the relationshipThe hacker behind the 2022 attack on the Nomad cross-chain bridge protocol, which resulted in the theft of nearly $200 million in cryptocurrency, appears to have spotted an opportunity to convert some of his ill-gotten gains into discounted ETH prices.
On-chain data showed that after purchasing ETH, the hacker then transferred the tokens in batches of 100 to Tornado Cash, a privacy-focused exchange that has come under scrutiny from U.S. regulators for its alleged use for launder illicit funds from cryptocurrency hacks.
Despite this, strong selling pressure prevented a significant rebound of the second largest cryptocurrency on the market, as large companies contributed to the ongoing decline.
DeFi market researcher Mochi pointed out that ETH’s “annihilation” was caused by the capitulation of large investment funds. Second According to the researcher, venture capital firm Paradigm sold 46,000 ETH tokens worth approximately $138 million at $3,000.
Similarly, the asset manager and ETF Issuer Grayscale reportedly sold 372,000 ETH at a valuation of $1.1 billion through its recently approved U.S. Ethereum exchange-traded fund (ETF).
Finally, the market maker Jump Trading has sold over $500 million in Ethereum in recent days, after liquidating his funds following rumors that he was leaving the cryptocurrency market-making industry.
ETFs See $430 Million in Net Outflows
Amid these bearish developments, digital asset investment products saw their first significant outflows in over a month, according to the latest relationship from CoinShares. The report says these products, which include exchange-traded funds and cryptocurrency trusts, saw total outflows of $528 million last week.
The outflows are believed to be a reaction to growing fears of a recession in the United States, as well as the ongoing geopolitical concerns and larger liquidations across most asset classes. Trading volumes for these investment products also declined, representing 25% less than the average for the overall cryptocurrency market.
Regionally, the majority of outflows were concentrated in the United States, which recorded outflows of $531 million. Germany and Hong Kong also recorded outflows of $12 million and $27 million, respectively.
However, not all regions were equally affected: Canada and Switzerland saw inflows of $17 million and $28 million respectively, likely taking advantage of falling prices.
Ethereum saw outflows totaling $146 million, bringing the net outflows since the launch of the US Ethereum ETF to $430 million. This data, however, masks positive inflows of $430 million last week from the newly launched US ETFs, which were offset by $603 million in outflows from Grayscale Trust.
At the time of writing, Ethereum has managed to regain the $2,450 level, having seen declines of 28% in the last week alone and over 31% in the last two weeks despite this small recovery.
Featured image from DALL-E, chart from TradingView.com
