5 Things to Know in Crypto Today: BTC Slips Under $23K, ETH Under $1.6K

Key Points

• Cryptocurrency prices continue to pull back from last week’s highs as traders monitor upcoming US data releases and geopolitical risk.
• Bitcoin was last trading around $22,800 and Ethereum back in the $1,500s.
• July was the strongest month of inflows into crypto investment products of the year, CoinShares said on Monday.

Crypto Pullback Continues As Traders Monitor Incoming Macro/Geopolitical Risk

Cryptocurrency traders are de-risking on Tuesday, with prices continuing to move lower following Monday’s modest downside, as investors remain on tenterhooks ahead of big macro risk events coming up later this week, such as Friday’s July US jobs report. US ISM Manufacturing survey data on Monday, though a little stronger than expected, showed growth in the sector at its weakest in two years, contributing to slowdown fears.

While this may be weighing on crypto sentiment, for now, the data also showed a sharp decline in inflationary pressures faced by manufacturers, contributing to the “peak inflation” narrative and easing Fed tightening fears. Focus now turns to the release of the June US JOLTs Job Openings report later on Tuesday, which is expected to show that demand for workers in the US remains strong, despite growing evidence of a slowdown elsewhere in the economy.

Traders have also been nervously monitoring a story about a planned visit to Taiwan on Tuesday from US House Speaker (the second in line to replace the US President) Nancy Pelosi, which could inflame US/China tensions.

Bitcoin was last trading just under $22,800, down nearly 2.0% in the last 24 hours and now about 7.5% lower versus weekend peaks in the mid-$24,000s. Ethereum, meanwhile, has slipped back into the $1,500s and was last trading about 11% below last week’s highs near $1,800. The likes of BNB, XRP, ADA, SOL and DOGE are all down 2-5% in the last 24 hours.

After Ethereum’s surge higher in recent weeks after developers confirmed that the “Merge” to Ethereum 2.0 is planned for September, one asset manager has turned more cautious on the cryptocurrency. IDEG’s CIO Markus Thielen said in a note on Monday that the cryptocurrency may now be in a consolidation phase, citing the fact that ETH has hit resistance around $1,800 and that network revenue and TVL on Ethereum DeFi protocols continue to drop. Thielen added that hype about the upcoming “Merge” might also be fading, as per Google Trends data.

But in a sign that could be taken as a positive for the broader cryptocurrency market, Tether is expanding the circulating supply of its US dollar-pegged USDT stablecoin once again for the first time in three months, indicating a rise in demand for the token. According to CoinMarketCap, since 29 July, USDT’s market cap has risen from $65.85 billion to slightly more than $66.30 billion. The stablecoin’s market cap had fallen sharply in the prior three months from above $83 billion amid concerns about stablecoin safety after the collapse of Terra’s UST.

July Experiences Strongest Month of Crypto Inflows in 2022, Says CoinShares

Crypto investment products saw inflows of $474 million in July said CoinShares in its latest weekly fund flows report released on Monday. That marked the largest monthly pace of inflows this year and more or less reversed the $481 million in outflows experienced in June. $81 million of these inflows occurred in the week ending on 29 July, which marked a fifth successive week of inflows.

Bitcoin investment products made up $85 million of these inflows, while short-bitcoin investment products saw an outflow of $2.6 million. CoinShares said that multi-digital asset investment products saw outflows for a second week, which the crypto data analytics company put down to crypto investors “becoming more targetted in their investments”.

Cross-chain Token Bridging Protocol Nomad Hacked for $200M

Cross-chain token bridging protocol Nomad was hacked on Monday and saw $200 million stolen, virtually all of the protocol’s funds. “An investigation is ongoing and leading firms for blockchain intelligence and forensics have been retained,” Nomad said in a statement. “We have notified law enforcement and are working around the clock to address the situation and provide timely updates. Our goal is to identify the accounts involved and to trace and recover the funds”.

We are aware of the incident involving the Nomad token bridge. We are currently investigating and will provide updates when we have them.

— Nomad (⤭⛓🏛) (@nomadxyz_) August 1, 2022

Nomad also warned its Twitter followers to ignore impersonators of providing fraudulent addresses to collect funds, as the company isn’t yet providing any instructions on how it plans to return stolen bridge funds.

We’re aware of impersonators posing as Nomad and providing fraudulent addresses to collect funds. We aren’t yet providing instructions to return bridge funds. Disregard comms from all channels other than Nomad’s official channel: @nomadxyz_

— Nomad (⤭⛓🏛) (@nomadxyz_) August 2, 2022

Crypto market commentators noted that the $200 million Nomad hack is the latest in a series of similar attacks on cross-chain bridges. One Twitter user explained that a recent Nomad protocol update had made it easy for users to fake transactions, enabling them to withdraw funds from the protocol that didn’t actually belong to them in the first place.

1/ Nomad just got drained for over $150M in one of the most chaotic hacks that Web3 has ever seen. How exactly did this happen, and what was the root cause? Allow me to take you behind the scenes 👇 pic.twitter.com/Y7Q3fZ7ezm

— samczsun (@samczsun) August 1, 2022

Coinbase Adds Ethereum Staking for Institutional Clients

Coinbase Prime has added Ethereum 2.0 staking to its product offerings for US-based institutional clients, the cryptocurrency exchange announced in a blog post on Monday. According to staked.us, Ethereum 2.0 stakers can expect an annual percentage yield (APY) of somewhere in the region of 4-6%. This is likely to be attractive to some institutions, given that developed market government bond yields and bank rates remain low by historic comparison.

CryptoPunks Price Floor Jumps After Tiffany & Co Announces Collaboration Project

The price floor to purchase one of the 10,000 Non-fungible Tokens (NFT) in the famous CryptoPunk collection has jumped sharply since the start of the week from around 68 ETH (around $116,000 at the time) to current levels around 74 ETH (just over $120,000 as of Tuesday). News that jewelry maker Tiffany & Co is launching an expensive CryptoPunk-themed pendant necklace collection, which will be sold exclusively to CryptoPunk NFT holders, boosted sentiment at the time.