Markets Turn Red As Some Volume Returns

Is It Fear Once Again?

The volatility gods have answered our prayers.

After seeing Bitcoin achieve a 17-month low volatility rate, recording its highest level of stability since mid-2017, we finally got a 2% break to the downside today.

The US and Shanghai stock markets reacted negatively to news of possible tariffs, which overall had little effect on the crypto market.

Instead, the crypto market was beset by two separate malicious attacks.

The first affected Canadian cryptocurrency exchange MapleChange, which had 913 Bitcoins stolen from it. They claim that they cannot return BTC or LTC funds due to an ongoing investigation. Anything else may be recovered, but they seem inundated. Overall, they were a very small exchange that only had a daily volume of 1-2 BTC.

Meanwhile, we recently learned that OysterPearl (PRL) had a very serious breach in their smart contract. The founder’s account called the transferDirector function, giving themself admin rights. This is only possible with the smart contract creator’s private key, which under any circumstance should be locked down as securely as possible.

The new owner opened the ICO sale function on the contract, sent ETH to the contract, and received PRL tokens at ICO price.

In all, they printed 4 Million PRL tokens and this allowed them to crash the price.

That being said, it is a very perplexing situation. The anonymous founder, Bruno, is most likely behind this attack. They have been distant from the project for a number of months now, and as mentioned this was through Bruno’s account. While it would be possible for someone to steal the creator’s private key, it just isn’t something that logically happens.

That being said, the net profit from this exit scam would be in the neighborhood of $160,000.

Is that really worth absolutely nuking a project? Who knows, but some in the Oyster community already seem persistent and that they won’t let this prevent the project from moving forward.

Whatever the case, both of these unfortunate events tell us something we need constant reminders of: diversify your holds and diversify your security.

Going all-in on a coin, keeping all your crypto on one exchange or one wallet, these are the first steps to disaster.

This space is too immature and unstable for you to keep all your money on one exchange or in one coin.

Instead, find ways to spread out your investments, and even if you are using advanced security measures like a hardware wallet, there’s no shame in having multiple wallets so long as you can manage it.

Once you’re more secure in your investments, it makes it much easier to look at things logically. It’s a pretty cozy feeling knowing you’re insured against loss because you took the time to develop your plan and investments.

It’s a great time to do this, too, as the headlines today really cemented the wave of institutional money coming our way:

• Cryptocurrency exchange Bitstamp has been acquired by Belgium-based investment firm NXMH in an “all cash deal,” Reuters reports today, Oct. 29.

• Blockchain payments startup Ripple Labs has hired former Google executive Amir Sarhangi as its vice president of products.

• Fidelity confirmed it is focused on providing crypto custody solutions for institutional investors.

Ethereum’s Devcon, Malta’s Blockchain Summit, and World Crypto Con (where I’m going!) are all this week. These are all huge events with lots of attendees, so we could really see some good energy coming out of this week.

Overall, I like where the market is right now and I’m excited to talk crypto for four days straight with whoever I can in Vegas. Wish me luck.

As always, I look forward to filling you in on my adventures and the interesting takeaways I have from the event. This will definitely be a week to remember.

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Defensive Actions for the next trading day: 

• None.