Last Week’s Cryptocurrency News. Friday, December 2nd

Friday, second of December.. As the week comes to an end, we can focus on the highlights of the crypto industry over the past few days.

Investors have opted to reduce their investments in crypto funds

Outflows from crypto investment products between 19 and 25 November amounted to $23m against inflows of $43.7m the week before. These estimates were cited by CoinShares analysts.

Traditional bitcoin funds saw outflows of $11m versus inflows of $14m a week earlier. Structures which allow open shorts on the first cryptocurrency sent $9.2 million (in the previous reporting period – $18.4 million).

From Ethereum-funds $6 mln were withdrawn against $0.8 mln a week before. Structures, which allow to open shorts on the second most capitalized cryptocurrency, showed the maximum outflow in history in the amount of $15.2 mln after record inflow of $14 mln in the previous seven days.

Altcoins (excluding Ethereum) continued their negative momentum. Products based on their basket attracted $0.1m.

As a reminder, Glassnode analysts noted the shaken confidence of hodlers after the FTX collapse.

By 17 November, the ‘average’ long-term bitcoin investor’s unrealised loss had reached 33%. This value on the MVRV indicator corresponds to the bear market situation of 2018 before it ended.

Phantom cryptocurrency wallet to add support for Ethereum and Polygon

The Phantom development team has announced support for Ethereum and Polygon networks in a Solana-based cryptocurrency wallet.

The beta launch of the upgraded product will take place within a few weeks. Shortly thereafter, the project will unveil a public version of the multichain wallet.

According to The Block, the number of active Phantom users exceeds 3 million. It is one of the most popular Solana-based wallets created by the developers of the decentralized 0x protocol. Its distinguishing features: NFT support and convenient representation of tokens from different ecosystems without the need to switch networks, as in MetaMask.

As a reminder, in April, the Phantom developers launched a mobile version of the Android app.

OpenSea head calls FTX collapse an opportunity to reshape industry

The collapse of the FTX exchange was a “tragic event” for the industry, but it also opened up an opportunity to rebuild it with a focus on trust and further decentralisation. Devin Finzer, CEO of NFT marketplace OpenSea, said this in an interview with Decrypt.

“We are all feeling the collateral damage across the industry. There is no doubt that this is a setback for the crypto industry,” he said.

According to Fincer, the NFT platform has not interacted with FTX or affiliated trading company Alameda Research.

However, Crypto Fund Research experts estimate that the bankruptcy of the exchange affected 25-40% of the industry. According to court filings, FTX and related companies owed the top 50 lenders $3.1bn. 

“I think for the broader crypto ecosystem and NFT in particular, this crisis is a real opportunity to invest in strong and ongoing user confidence,” Finzer said.

He believes it could take up to two years for the industry to recover from the current cascading crisis.

“I have full confidence in the overall sustainability of the community and the ecosystem, as well as the desire to move forward and create,” stressed Finzer.

He also commented on the practice of not collecting royalties by NFT marketplaces. OpenSea introduced a new tool at the beginning of November to collect royalties. Finzer confirmed that the platform has pledged to continue paying creators of collection tokens. 

He called it a “paramount step” to maintain trust with creators. Decentralisation also plays an important role in this, the OpenSea head added. The marketplace does not take responsibility for users’ assets, unlike some other marketplaces.

Earlier, NFT platform Magic Eden on Solana was criticised for storing assets in an escrow wallet, which some Web3 developers considered risky. The non-interchangeable token trading platform FTX has also taken its toll on users’ assets – they have now lost the ability to operate them due to the group’s bankruptcy process.

The crypto industry lost over $391m to hacks in November

The Web3 industry lost $391.6 million in November as a result of 29 exploits, including the Deribit hot wallet hack and FTX funds theft, PeckShield estimated.

Since the beginning of the year, damage to the cryptocurrency industry from hacking attacks reached $3.37 billion. For the full year 2021, the amount was $1.55 billion, experts said.

October was a record year in terms of exploit losses – $760.2 million, most of which was the $586 million from the hacking of the BSC Token Hub bridge of the BNB Chain network.

In November, a significant portion of the hacking losses was caused by the incident with the bankrupt FTX exchange. An unknown person withdrew about $340 million worth of digital assets from the platform, experts recalled. These were mainly bitcoin (25.4%) and Ethereum (68%).

The Deribit hack earlier this month resulted in a loss of $28 million.

PeckShield experts also suggested that FTX’s collapse would trigger a redistribution of exchange flows in favour of decentralised platforms. However, analysts at JPMorgan have previously suggested that the superiority of centralized exchanges over DEX will remain.

Recall that against this backdrop, Telegram founder Pavel Durov announced the development of non-custodial wallets and dapps, including a decentralised exchange, by the messenger’s team.

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