Orbit Bridge loses $82 million in hacker attack, BTC plummets

This week Orbit Bridge suffered an $82 million exploit, while Bitcoin (BTC) collapsed after retesting $45,000 due to escalating FUD. Meanwhile, the approval window for a spot BTC ETF is approaching.

Orbit loses $82 million due to hacker attack

• On December 31, 2023, a representative of the crypto community alerted the public to a possible exploitation of the Orbit blockchain network's Bridge protocol, which would result in several assets being withdrawn from the Bridge contract.

• Shortly after that initial alert, the Orbit Chain team confirmed reports that an exploit had occurred on the bridge. Data confirms that the protocol lost a whopping $81.5 million in multiple cryptocurrencies due to the hack.

• In its disclosure, the Orbit team emphasized that it was investigating the cause of the hack and was cooperating with law enforcement on the matter. The modus operandi was reportedly similar to the trend seen among North Korean hackers.

CoinsPaid hacked, North Korea moves into the spotlight

• A few days after the Orbit Bridge exploit, CoinsPaid, an Estonia-based crypto payment protocol, suffered its second hack in six months. The breach resulted in a $7.5 million loss across several crypto assets, including BNB and Ethereum (ETH).

• Given the increasing frequency of hacks, a report from TRB Labs this week highlighted North Korean hackers who were responsible for several exploits registered last year. The report found that these hackers stole $600 million in cryptocurrencies through hacks last year, accounting for a third of all hacks in 2023.

Growing discussions around spot BTC ETFs

• In anticipation of the approval of a spot BTC ETF, industry commentators continue to predict an impending price explosion for BTC. This week, an adviser to VanEck, one of the asset managers looking to bring the product to market, contradicted that consensus.

• In a detailed X reveal on December 31, Gabor Gurbacs argued that the crypto community is overestimating the potential impact of a spot BTC ETF on the price of Bitcoin, citing the example of gold. In his opinion, the expected BTC price explosion may not occur.

• Vetle Lunde, senior analyst at K33 Research, shares similar views. However, Lunde's outlook leans towards bearish territory as market watchers expect the approval of a BTC ETF to trigger a sell-the-news frenzy that will lead to a decline in the Bitcoin price.

• Earlier this week there was speculation about the approval of the ETF products, which was supported by several market observers. Fox journalist Eleanor Terrett dismissed those claims and noted that no decision would be made this week.

• While optimism about ETF approval remains high, Better Markets CEO Dennis Kelleher this week called on the U.S. Securities and Exchange Commission (SEC) to reject applications for spot BTC ETFs, arguing that the products provide investors with market manipulation and could expose fraud from the crypto scene.
• Former SEC executive and cybersecurity expert John Reed Stark echoed Kelleher's statements in a lengthy and scathing post on social media.

Updates on BTC ETF filings on site

• This week also saw several updates to the numerous spot Bitcoin ETF filings. On January 3, reports confirmed that Fidelity Investments, one of the asset management firms in the ETF competition, filed a Form 8-A with the SEC to register its Fidelity Wise Origin Bitcoin Fund as a publicly traded security.

• Shortly thereafter, asset managers VanEck and Grayscale filed similar 8-A filings with the SEC for their respective BTC ETF products. These filings would allow companies to register their products as securities for trading on public exchanges if approval is granted.

• Additionally, Ark 21Shares and Valkyrie filed their own Form 8-A filings on the same day as Grayscale and VanEck. The growing list of Form 8-A submissions further increased optimism that the product would be approved soon.

• Interestingly, to show his support to the Bitcoin community, VanEck this week announced plans to donate 5% of the proceeds from his Bitcoin ETF to support Bitcoin core developers, specifically Bitcoin Brink, a non-profit organization dedicated to the development of the dedicated to the Bitcoin protocol.

Bitcoin collapses after new test

• Meanwhile, as these ETF discussions and updates continued, the market held on to the optimism surrounding Bitcoin, resulting in a gradual but steady price increase. BTC finally recovered to a high of $45,879 on January 2nd, retesting $45,000 for the first time since April 2022.

• However, this rally was short-lived as ETF discussions turned sour. Matrixport, a crypto service provider, first claimed that Bitcoin could reach $50,000 in January, confirming the cryptocurrency's bullish outlook for the cryptocurrency's leading crypto asset.

• Nonetheless, following this report, Matrixport argued in a paper dated January 3 that the SEC will reject all BTC ETF applications in January, with an eventual approval in the second quarter of 2024. The Matrixport team noted that it is with one BTC's decline to $36,000 to $38,000 is expected as a result of this.

• Bitcoin collapsed on January 3, falling to a low of $40,750 before staging a comeback. The asset finally closed on January 3 with a decline of 4.68%, dragging down the entire crypto market. This resulted in the liquidation of almost $700 million in the perpetual market.

• BTC recovered from this dip and is currently trading at $44,349, up 5.2% this week. Amid the recovery campaign, BitMEX founder and former CEO Arthur Hayes released a report suggesting that BTC could experience a healthy correction due to certain upcoming macroeconomic events.
• BitMEX is also part of the team responsible for launching a physical Bitcoin worth approximately $45,000 into space aboard a United Launch Alliance (ULA) Vulcan rocket. The launch is scheduled for January 8th and the expected arrival on the moon is February 23rd.

• Meanwhile, an unknown Bitcoin whale transferred $1.19 million worth of BTC to Bitcoin founder Satoshi Nakamoto's wallet, commonly referred to as the Genesis wallet. The development sparked speculation among crypto advocates.

Nigeria pushes for cNGN, SEC insists BUSD is a security

• A few events related to crypto regulations and enforcement emerged this week. The top bank of Nigeria, the most populous black country, released a report this week outlining rules for banks in the country regarding the operation of crypto accounts.

• The report came shortly after the country lifted its blanket ban on cryptocurrency transactions. This week the central bank also gave approval to the planned cNGN project, which is scheduled to launch next month.

Meanwhile, in the US, the SEC continued to ramp up its enforcement actions. Recall that a judge agreed with his argument in the Terraform Labs case that Terra ecosystem tokens were securities. The agency has cited this ruling to argue that BUSD is a security in the Binance case too.

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