In recent financial news, a significant movement involving the digital currency ethereum (ETH) has caught the eye of many in the cryptosphere. According to a recent report, amidst a dramatic downturn in ETH’s value, a wallet associated with a notable cryptocurrency theft from two years ago has made a staggering transaction, converting $39.75 million worth of the stablecoin DAI into 16,892 ETH. This move comes as ethereum, the world’s second-largest cryptocurrency by market capitalization, saw a precipitous drop of as much as 23% on Monday.
crypto Hacker Exploits ethereum Crash
The hacker in question, linked to the 2022 heist targeting the cross-chain bridge protocol Nomad—which resulted in a loss of nearly $200 million in assorted cryptocurrencies—has seemingly capitalized on the reduced ETH prices to convert a portion of their ill-gotten gains. Reports indicate that this individual then transferred the acquired ethereum in 100-token increments to Tornado Cash, a privacy-centric exchange service that has come under fire from U.S. regulators for its alleged role in laundering money derived from crypto-related crimes.
Despite these transactions, ethereum has struggled to recover significantly as it faces ongoing selling pressure. This trend has been exacerbated by substantial sales from large corporations. DeFi Mochi, a market researcher, highlighted the role of major investment funds in the sharp decline of ETH’s value. Notably, venture capital firm Paradigm reportedly sold off 46,000 ETH tokens, worth roughly $138 million, while asset manager and ETF issuer Grayscale offloaded 372,000 ETH valued at $1.1 billion through its newly approved ethereum exchange-traded fund (ETF) in the U.S. Additionally, market maker Jump Trading has disposed of over $500 million worth of ethereum in recent days amid speculation regarding its exit from the crypto market.
ETFs See $430 Million In Net Outflows
Amid these bearish dynamics, digital asset investment products, including cryptocurrency exchange-traded funds and trusts, experienced their first significant outflows in more than a month. A recent report from CoinShares revealed that these products saw a total of $528 million in outflows last week. This shift is attributed to increasing concerns over a potential recession in the U.S., as well as ongoing geopolitical tensions and broader market liquidations, leading to decreased trading volumes for these investment products.
The majority of these outflows were concentrated in the United States, with $531 million leaving the market. Germany and Hong Kong also witnessed notable outflows. Conversely, Canada and Switzerland saw inflows, likely as investors in these regions sought to capitalize on the lower prices.
ethereum itself accounted for $146 million of the net outflows, summing up to $430 million since the U.S. introduction of ethereum ETFs. This figure contrasts sharply with the $430 million in positive inflows last week from these newly launched ETFs, which were overshadowed by $603 million in outflows from the Grayscale Trust.
As of the latest updates, ethereum has managed to recuperate some of its losses, reaching the $2,450 level. However, the currency still reports a decline of 28% over the previous week and more than 31% over the past two weeks, highlighting the volatility and challenges faced by this prominent cryptocurrency amidst broader market trepidations and specific large-scale selling activities.
This scenario underscores the intricate dynamics at play within the cryptocurrency market, where the actions of individual actors, whether through illicit activities or large institutional decisions, can have profound impacts on the value and stability of major digital currencies like ethereum.