Author: Faith Yakubu

Japanese cryptocurrency exchange DMM Bitcoin has disclosed a significant breach resulting in the loss of 4,502.9 BTC, equivalent to $305 million, to hackers. The stolen funds were reportedly divided into 10 wallets, with each holding batches of 500 BTC, according to data provided by security firm Blocksec.

In response to the breach, DMM Bitcoin has assured customers that it will cover the full amount lost by procuring an equivalent sum of BTC with the support of its group companies. Additionally, the exchange has implemented measures to prevent further unauthorized outflows of funds.

To mitigate the impact of the hack, DMM Bitcoin has temporarily restricted all spot buys on its platform. Furthermore, customers withdrawing Japanese yen may experience delays, as indicated by the exchange.

This incident marks one of the largest cryptocurrency hacks in Japan since the notorious Coincheck breach in 2018, which saw losses totaling 58 billion yen. With over $473 million lost to cryptocurrency hacks in 2024 before this incident, the security of digital assets remains a pressing concern within the cryptocurrency ecosystem.

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Russian commodities firms facing challenges in executing financial transactions with Chinese counterparts are turning to stablecoins as a new method for settling deals. At least two major metals producers have begun utilizing Tether Holdings Ltd.’s stablecoin and other cryptocurrencies to settle cross-border transactions with primarily Chinese clients and suppliers. These settlements, in some cases, are routed through Hong Kong.

The shift towards blockchain-based transactions highlights the enduring impact of international restrictions imposed in response to the 2022 invasion of Ukraine on the Russian economy. Even unsanctioned Russian companies dealing in commodities such as metals and timber have encountered difficulties in receiving payments for their goods and procuring equipment and raw materials. Challenges persist despite China’s stance of not joining international sanctions, as the US Treasury Department’s threats of secondary sanctions on lenders facilitating sanctions evasion have led to increased compliance measures.

Stablecoins offer a faster and more cost-effective alternative for transactions, with transfers taking just seconds and costing only a few cents. Tether’s USDT stablecoin, pegged to the US dollar, provides added convenience for exporters. The alternative of traditional banking transactions carries the risk of account freezing, with some companies experiencing the frustration of multiple frozen accounts in various countries.

The growing role of cryptocurrencies in settlements is not unique to Russia, as countries under sanctions like Venezuela have increasingly turned to Tether for transactions, often brokered through intermediaries in Dubai. This trend reflects a broader shift in the Russian central bank’s stance towards the cryptocurrency industry. While previously considering a blanket ban, Governor Elvira Nabiullina now supports experimenting with cryptocurrency payments in international transactions.

However, the central bank has emphasized that cryptocurrency payments are acceptable only for cross-border transfers and should not be promoted domestically. Legislation is being considered to establish a legal framework for stablecoin use in international transactions.

Meanwhile, cryptocurrency-linked banking services in Russia are expanding, with Rosbank becoming the first Russian lender to initiate cross-border payments with cryptocurrency for businesses in June last year. Other banks have followed suit since then.

In contrast to stablecoin adoption, some commodities firms are opting for barter deals to settle transactions, entirely avoiding cross-border transfers. This approach, once considered exotic, involves swapping commodities for goods shipped to Russia.

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Semler Scientific (NASDAQ:SMLR) witnessed a remarkable 25% increase in its stock price during early U.S. trading hours on Tuesday following its announcement of purchasing 581 bitcoins for its treasury.

Before the surge, the company boasted a market capitalization of under $200 million. In its most recent earnings statement, Semler revealed holding cash and cash equivalents amounting to $62.9 million at the end of the first quarter. The company reported first-quarter revenue of $15.9 million, with operating cash flow standing at $6.1 million.

According to a press release issued this morning, Semler acquired 581 bitcoins for $40 million, implying an average price of approximately $68,850 per token.

Eric Semler, the company’s Chairman, highlighted Bitcoin’s emergence as a significant asset class, boasting a market value exceeding $1 trillion. He emphasized Bitcoin’s unique attributes as a scarce and finite asset, capable of serving as a viable hedge against inflation and a haven amidst global uncertainty. Additionally, Semler expressed a preference for Bitcoin over gold, citing Bitcoin’s digital resilience compared to the traditional precious metal.

Despite today’s impressive gain, Semler’s stock remains just 2% lower on a year-over-year basis.

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Bitcoin (BTC) whales, significant holders of the cryptocurrency, have reignited their purchasing activity after a brief pause following Bitcoin’s record high in March. According to market intelligence firm CryptoQuant, there has been a notable increase in the 30-day percentage change in whale address holdings, suggesting a renewed interest in accumulating Bitcoin at current price levels.

In March, whales had boosted their BTC holdings by more than 9.8%. While their accumulation persisted into April, the growth rate slowed to 4.2% by May 1, coinciding with a significant market downturn that saw Bitcoin’s price drop by over 20% to below $57,000. However, since reaching the market bottom, the accumulation rate has rebounded to 5.5% as of May 22, indicating a resurgence in whale interest.

During the market downturn in early May, whales reportedly acquired 47,000 BTC, as highlighted by CryptoQuant CEO Ki Young Ju. The return of robust buying activity among Bitcoin whales suggests that they view current prices as advantageous for accumulation. Whales, typically defined as holders of Bitcoin addresses containing between 1,000 BTC and 10,000 BTC, excluding mining entities and crypto exchanges, tend to increase their buying during bull markets and decrease it during bearish phases.

Bitcoin is currently priced at $69,065, showing a 0.24% increase over the past 24 hours and a 3.58% rise over the week. The investment in Bitcoin by large investors, known as whales, has notably increased this year. Specifically, the amount of money they’ve put into Bitcoin has more than doubled, rising from $57 billion to $122 billion. This growth is calculated based on the realized cap of whale coins, which accounts for the total value of coins owned by whales at the moment of purchase, rather than their current market value.

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Crypto traders are closely monitoring the surging price of Ether (ETH), spurred by growing anticipation surrounding the potential approval of exchange-traded funds (ETFs) in the United States. Despite lingering doubts about the level of demand for these investment vehicles, bets on further gains in Ether are escalating.

The recent shift in stance by the US Securities & Exchange Commission (SEC) has triggered a notable 26% surge in Ether over the past seven days, marking its most significant weekly gain since the 2021 cryptocurrency bull market, according to Bloomberg data.

Investors are drawing parallels with the remarkable debut of US spot Bitcoin ETFs in January, which have quickly amassed $59 billion in assets. However, Ether, being less mainstream than Bitcoin, presents challenges in gauging investor interest.

One key distinction is that spot-their ETFs will not participate in staking, a process crucial for earning rewards by pledging tokens to support the Ethereum blockchain. This omission raises concerns about the attractiveness of these funds compared to direct token ownership.

While major players like BlackRock Inc. and Fidelity Investments await SEC approvals to launch Ether-related products, the timeline for such developments remains uncertain. As of Monday morning in London, Ether was trading around $3,900, with Bitcoin hovering near $68,500.

Chris Weston, Head of Research at Pepperstone Group, remains bullish on Ether, emphasizing that any pullbacks present buying opportunities.

Options markets indicate growing optimism, with significant concentrations of bullish bets targeting Ether reaching $5,000 or higher, as observed on the Deribit trading platform. The current spot-Ether record stands at $4,866, set in November 2021.

Volatility in Ether is expected to intensify, with the gap between the T3 Ether Volatility Index and its Bitcoin counterpart widening significantly since early 2023. This suggests that speculators anticipate greater price swings in Ether compared to Bitcoin.

Analysts are also scrutinizing the demand for Ether futures offered by Chicago-based CME Group Inc. as a barometer of institutional interest in regulated crypto exposure in the US. While open interest in CME Ether futures is rising, it remains substantially lower than that of CME Bitcoin futures, indicating comparatively lesser institutional involvement with Ether.

Noelle Acheson, author of the Crypto Is Macro Now newsletter, cautions that the modest participation from institutions, which are expected to flock to Ether ETFs upon launch, could lead to underwhelming initial inflows into these products.

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