The cryptocurrency market is down by more than 20% in the last 7 days. The overall market cap of digital currencies lost nearly $300 billion within a single week. Large crypto investors have started adjusting their investment portfolios amid the recent bearish market sentiment.
According to the latest digital asset fund flows report published by CoinShares, the cryptocurrency investment products saw outflows worth $79 million last week, a third consecutive week of digital asset outflows. CoinShares mentioned that the recent weekly numbers indicate the longest bearish sentiment in crypto investment products since 2018.
Outflows were mainly focused on Bitcoin as more than $89 million worth of investment left BTC-related products during the last week. The world’s largest cryptocurrency saw its sixth consecutive week of outflows.
“Bitcoin outflows now total US$487m this year representing 1.6% of assets under management. Sentiment remains mixed as evidenced by some providers seeing inflows while others continue to see outflows. Ethereum, the world’s second-largest cryptocurrency, saw minor outflows of US$1.9m, combined with outflows from the previous week now totaling US$14.6m. As a percentage of assets under management, it represents 0.14%, implying most of the negative sentiment has been focused on Bitcoin,” CoinShares mentioned in the report.
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During the market crash of 2018, the cryptocurrency investment products saw outflows for seven consecutive weeks.
Ethereum and Cryptocurrency Market
ETH remained the worst-performing cryptocurrency among the top 5 during the last 7 days as its price plunged approximately 26%. CoinShares highlighted the impact of ETH’s price action on its trading volume. “Weekly trading volumes in Ethereum investment products have fallen by 80% since the May highs. Bucking the trend last week were multi-asset investment products which saw inflows of US$10m last week. Year-to-date net inflows now total US$351m, representing 16% of assets under management,” CoinShares added.
The total market cap of digital currencies currently stands at around $1.3 trillion, down by more than 7% in the last 24 hours.
Bitcoin, the world’s most valuable digital currency, dropped below $32,500 on Monday after a sharp decrease of 8% in the last 24 hours. The latest Bitcoin sell-off has accelerated liquidations across the crypto market.
According to the latest data posted by crypto platform bybt.com, approximately $800 million worth of long crypto positions got liquidated within a single day. This number includes more than $500 million worth of long Bitcoin positions.
Overall, more than $1 billion worth of cryptocurrency trading positions were liquidated in the last 24 hours. Additionally, over $200 million worth of long Ethereum positions were liquidated in the same period, followed by XRP ($40 million) and Dogecoin ($25 million).
The total market cap of Bitcoin plunged below $600 billion on Monday, its lowest level since 9 June. The world’s largest cryptocurrency is now trading near $33,000, which is down approximately 48% from its all-time high of above $64,000 in April 2021.
“Bitcoin plunged over the weekend as China stepped up its crackdown on crypto. Despite having traded back up to the $40,000 range at the beginning of last week, it has now dropped back to trading below $34,000. The Chinese government announced it was extending its crackdown on crypto-assets mining, including in Sichuan province, one of the biggest regions for mining in the country,” Simon Peters, Market Analyst at social trading platform eToro, commented.
China’s Impact on Bitcoin
The latest announcement from China had a significant impact on Bitcoin and other cryptocurrency assets. The panic among traders triggered massive liquidations due to an uncertain environment.
“26 of the largest mining projects in the region were ordered closed by the authorities as they conduct investigations, local Chinese media reported per the Financial Times, placing additional pressure on one of the most valuable mining regions in the world. Local governments in cryptocurrency mining locations Inner Mongolia, Qinghai Xinjiang and Yunnan have all now taken steps to shut down mining operations,” Peters added.
Cryptocurrency assets are facing a tough challenge these days after the latest negative market sentiment. The total market cap of digital currencies dropped below $1.4 trillion on Monday.
According to the latest data published by Coinmarketcap, Bitcoin, the world’s largest cryptocurrency, crashed below $34,000 today. As of writing, the total market of BTC stands at around $640 billion.
The cryptocurrency market has been in a downtrend for the last five weeks. On 12 May 2021, the overall value of digital assets topped $2.6 trillion, the highest level on record. The market cap dropped significantly in the following weeks and touched a low of approximately $1.25 trillion on 24 May.
There were several reasons behind the latest sell-off in the cryptocurrency market. Analysts termed the recent crypto ban announcement by China as the main driver. Elon Musk, CEO of Tesla, also criticized Bitcoin for its environmental impact during the last few weeks.
“The dominant driver of Bitcoin right now is the crackdown on mining & trading in China that began in May. This created a forced & rushed exodus of Chinese capital & mining from the Bitcoin network – a tragedy for China and a benefit for the Rest of the World over the long term,” Michael Saylor, CEO of MicroStrategy, said in a Tweet on Saturday.
According to the recent data by crypto analytics firm Santiment, cryptocurrency whale accounts are still accumulating digital currencies in large amounts despite the latest sell-off. “Bitcoin has dropped to $34,000, revisiting levels last seen June 12th. Whale holders (at least 1,000 BTC addresses) continue to show a pattern of accumulation, and mid-tier holders (10-1,000 BTC) aren’t flinching,” Santiment highlighted.
The recent drop in the cryptocurrency market has caused a major dip in the total value of Grayscale’s digital assets under management (AUM). The US-based asset management firm now has nearly $34 billion worth of crypto AUM, a significant drop from over $50 billion in May 2021.
The drop in non-fungible token sales that began in early May seems to be continuing into June.
Finance Magnates previously reported that according to data from NonFungible.com, the week-long period surrounding the NFT market peak at the beginning of May saw $170 million in transaction volume. By the end of the month, that figure had collapsed to just $19.4 million in NFT sales, which is a decrease of roughly 90%.
According to a new report from CNBC, the drop has continued. On June 15th, the seven-day average NFT transaction volume had fallen to oust $8.7 million. Compared to the market’s peak in early May, the new number represents a drop of nearly 95 per cent.
Is this the end of non-fungible tokens?
The Boom and Bust of Non-fungible Tokens in 2021: A History in Brief
While this may not be the end of NFTs, it’s certainly the end of an era. Riding on the tailwinds of the biggest crypto bull market in history, non-fungible tokens made a serious splash when they entered the mainstream in March of 2021. By that point, NFTs had already been around for several years.
However, they had never previously captured the public imagination in such a big way. Investors and speculators saw a new opportunity to try and win big in a rather novel financial market; artists and creators saw a new opportunity to monetize their work in the digital world.
For some, the opportunity paid off–big time. Graphic designer Mike Winkelmann, also known as “Beeple,” sold an NFT for a record $69 million at a Christie’s auction in March. Around the same time, Twitter CEO Jack Dorsey, sold a tokenized version of his first tweet for $2.9 million the same month. Grimes, Eminem, 3LAU, Lindsay Lohan, and many other celebrities also cashed in on the trend.
However, it wasn’t long before the cracks in the walls of the NFT space started to show. Critics of non-fungible tokens decried the practice of minting them, pointing to the possibility of heavy carbon footprints. Many smaller creators who were entering the space for the first time quickly discovered that someone else had already stolen and tokenized their work, much to the chagrin of the collectors who had purchased the fraudulent tokens.
Additionally, reports of “vanishing” non-fungible tokens began to hit headlines as questions about what it really means to own a non-fungible token went unanswered. Because the material that an NFT is associated with is not stored in a Web 3 environment, it is subject to the same kinds of problems that all centralized media is: if an NFT-tied photo disappears from the web, well, tough luck.
Now That the Hype is Over, What’s Next?
At first, the criticisms of non-fungible tokens didn’t seem to significantly affect the space. However, when cryptocurrency markets were hit with bearish forces in mid-May, non-fungible token markets were decimated. Analysts who operate outside of the cryptocurrency space have written the whole saga off as another crypto fad–novel, exciting, and perhaps interesting, but essentially vapid and hype-driven.
However, Gauthier Zuppinger, the chief operating officer of Nonfungible, told CNBC that the NFT market movements of the last several weeks are closely related to one another: “The thing is that, each time you’ll notice such a quick increase on any trend, you’ll see a relative decrease, which basically stands for a market stabilization,” he told CNBC.
And indeed, data from Nonfungible.com show that after this 95% decrease from the NFT market peak in early May, NFT sales are basically continuing along the trend of slow and steady growth that has been trending over the past several years.
“High-profile NFTs selling for millions of dollars was a sure sign that the market was treating them as speculative assets,” said Nadya Ivanova, chief operating officer of L’Atelier, speaking to CNBC. “And by definition, markets for speculative assets are unstable and liable to dry up.”
“The bigger question for NFTs is their long-term value, which we believe is likely significant,” she continued.
In other words, now that the hype is over, non-fungible tokens can continue along their path of technological discovery.
While the most commonly known use-cases of non-fungible token technology surround the concepts related to digital authenticity and ownership on the internet as we know it, some innovators are exploring an entirely new environment for NFTs: virtual reality.
Forbes recently reported that Space Force partnered with digital artist companies WorldwideXR and VueXR to release their own NFTs with augmented reality features. According to the report, the NFTs are accessible to their owners through the VueXR app, which is available on both iOS and Android.
“As augmented and virtual reality technology matures, normal people are going to spend more and more of their time — and therefore money — in virtual environments,” Nadya Ivanova told CNBC.
Non-fungible tokens have already made a splash in the gaming world as technology that could make decentralized ownership of in-game assets into a reality. However, as gaming moves increasingly toward virtual reality, NFTs could take digital ownership to the next level.
“World-builders in VR are looking at ways to make world building a lot more profitable, but there are few companies that are willing to put down money for a virtual world,” said Dale Deacon, who is an expert on developing immersive storytelling in VR & AR. He was speaking to VRScout.
NFTs could provide a path toward real-world monetization in virtual economies. “Monetizing the job of being a VR world builder, will be a part of monetizing the role of a world builder.”
Now that the hype is being washed out of the non-fungible token space, it’s possible that VR innovators could explore their use cases in a more serious way. “I’m interested in AR and VR spaces as NFTs [because] they have a practical value,” said Dale, adding that “the hype around NFTs” made them a bit “myopic.”
While NFTs may not be the end-all, be-all for VR world builders and other creative economies, they could be part of an important shift that allows creators to have access to new kinds of economic tools.
“The shiny thing that NFTs are at the moment, is not the end goal of this whole decentralized finance – where standard banks have proper competition for once,” Deacon explained.
Now That the Hype Is Over, True Innovation Continues
Beyond virtual reality, non-fungible tokens are also finding new use cases in the music world and beyond.
“We have only seen the tiniest part of where this is going,” said Geoff Osler, CEO and co-founder of NFT app S!NG, to CNBC. “Cryptocurrency is here to stay — and NFTs mean there is now something to buy. It’s the other side of the equation. And this is going to go a long way past digital art. We think music is next.”
StormWall analyzed the statistics of DDoS attacks conducted against its customers in Q1 2021.
StormWall, an international provider of solutions for protection against DDoS attacks, presents an analysis of the statistics of attacks recorded in Q1 2021. The statistics reflect the established attempts of DDoS attacks against StormWall customers from different countries of the world, representing various industries and sectors of the economy.
As our analysis showed, the intensity of DDoS attacks, in general, continues to grow. So, in Q1 2021, we recorded 25.4% more attacks on our customers than in the fourth quarter of 2020. The leaders in the number of attacks were e-commerce, construction, entertainment, telecommunications, as well as the financial sector.
We explain the increase in the number of attacks primarily by reducing the cost of conducting attacks and steadily reducing the cost of creating botnets, which in general leads to the increasing popularity of DDoS attacks among all kinds of attackers and unscrupulous competitors.
For comparison, the number of attacks in Q1 2021 increased by almost 40.9% compared to Q1 2020.
Statistics and dynamics of DDoS attacks by industry
Q1 2021, the largest share of attacks (42.7%) occurred in the entertainment sector. Compared to Q4 2020, the number of attacks increased by 28%, while their share increased by 2%. At the same time, the growth of the share of such attacks for the same periods of 2019-2020 was 7%. The decline in dynamics can be explained by mitigation of quarantine measures in several countries and regions – this led to the fact that the main users of entertainment resources began to spend less time on them, switching to business and entertainment in an offline format. Nevertheless, the sector remains the most attacked since hackers can cause large losses in a very short time and quickly get money through blackmail.
The second-largest share was made by attacks on telecom: the number of attacks on this sector increased by 51.2% compared to Q4 2020 – their share increased to 35.3%. (It should be noted that more than 40% of the clients we consider to be in the telecom sector are hosting service providers and cloud services.) This strong growth is due to the sharp increase in the importance of telecommunications for business, government, and society: in the era of the pandemic, data networks have become the main channel of interaction – communication, training, shopping, commercial transactions, etc.
The attackers could not help but notice this and therefore intensified DDoS attacks on the telecom sector with the aim of extortion and blackmail. In addition, the increase in demand for high-quality telecommunications caused an increase in competition, one of the tools in the hands of unscrupulous market players became DDoS attacks.
The third place was taken by the e-commerce sector – it recorded 9% of the total number of all DDoS attacks in Q1 2021. The number of attacks here increased by 19.1% compared to the previous quarter. The continued increase in the number of attacks is obviously due to the transfer of consumer purchases online – in online stores and on online platforms, which was the result of the ongoing mass quarantine measures in several countries and regions, as well as consumer habits that have changed during the quarantine. The attackers could not help but react to the growing popularity of e-commerce companies. Interestingly, online stores of finishing materials and furniture were most often attacked, which can be explained, on the one hand, by an increase in demand for these goods during a period of limited opportunities for vacation trips and, as a result, by the attackers ‘ interest in online furniture and DIY stores, and by the revenge of dissatisfied buyers.
In the construction sector (its share was 4.5%), the number of DDoS attacks increased by 18.2% compared to the previous quarter.
A small (up to 3.7%) increase in the share of DDoS attacks was observed in financial organizations. It is noteworthy that in Q1 2020, attacks were carried out mainly on banks, then a year later – on crypto services.
In the education sector (its share – 2.6%), the share of attacks decreased by 16.2% compared to Q4 2020. We attribute this dynamic primarily to a decrease in the share of distance learning. Nevertheless, their share is still several times higher compared to Q1 2020.
Statistics and dynamics of DDoS attacks by protocols
The most frequent attacks were of the packet flood type (on the network and transport layer of the OSI model) — the share of such attacks was 83.5%. The second-largest share — 16.5% — came from attacks on sites at the application layer (HTTP/HTTPS).
This is explained, on the one hand, by the fact that a significant part of DDoS attacks occurred on online games and telecom: in the first case, the flood at the TCP/UDP level is aimed directly at disabling the service, and in the second, attackers use the flood with a large number of small or large packets to overload the processor on routers or overflow communication channels. On the other hand, batch flooding was often more effective and cheaper than HTTP flooding, even if the target of the attack was a website: at the beginning of the year, new botnets appeared in
the Darknet that was quite affordable (from $250 per week), allowing you to organize attacks with a capacity of several hundred gigabits at the batch level.
It is noteworthy that just a year ago, the shares of batch flooding and application-layer attacks were almost equal — among StormWall clients, they accounted for 48% and 52% of cases, respectively. As we can see, the preferences of the organizers of a DDoS attack depend primarily on the combination of price/efficiency, and batch flooding often turned out to be more effective and cheaper, even if the target of the attack was a website or other service.
General trends and recommendations
The number of DDoS attacks, in general, continues to grow, and we have no reason to expect
them to decrease. Of concern is the sharp increase in the number of attacks with a capacity of more than 100 Gbit/s. Attacks with a maximum capacity of about 1 Tbit/s are no longer uncommon. We explain this dynamic primarily by the reduction in the cost of powerful botnets: increasing their affordability makes them a popular tool for conducting attacks.
According to our forecasts, the power of DDoS attacks will also increase due to the development of 5G networks, which will make DDoS attacks with a capacity of more than 1 Gb/s quite accessible-it will be almost impossible to repel them without specialized means of protection.
In addition, we expect the emergence of new types of DDoS attacks, which are presumably aimed at the UDP protocol, since applications based on it (primarily online games) are significantly more vulnerable to DDoS attacks than those using the TCP protocol.
Given the serious financial and reputational damage caused by DDoS attacks, organizations should take care of long-term protection against them and purchase a reliable solution that can protect against DDoS attacks of various types, including so-called smart attacks.
This report was brought to you by StormWall, a service that provides anti-ddos services for your online projects.