Ethereum price rises sharply despite severe mining disruptions in Kazakhstan
Ethereum has been able to accrue strong market support even as political unrest across Kazakhstan impacts mining operations.
- ETH's market dominance has continued to hover between 18% and 19% over the past fortnight.
- The mainstream deployment of the digital yuan seems to be imminent as the 2022 iteration of the Winter Olympics is set to commence in Beijing next month.
- Blockchain security firm CertiK has revealed that during 2021 a total of AUD$1.8 billion (US$1.3 billion) was lost as a result of various decentralised finance (DeFi) hacks and scams.
After having continued to flirt with the all-important AUD$4,150 (US$3,000) resistance for nearly a week running, Ethereum, the world's second-largest cryptocurrency by total market capitalisation, has continued to showcase emerging signs of bullish support, with the digital asset recording 24-hour gains of approximately 6%. At press time, ETH is trading at a price point of AUD$4,500.
As to what may be causing Ethereum's value to swing so wildly, experts believe that for one, the altcoin may simply be following Bitcoin's price movements, with the flagship digital asset having experienced a dip of 40% since scaling up to its all-time high value on 10 November. The volatility could also have been compounded by the Federal Reserve's decision to tighten its regulatory policies over the course of 2022 as well as the current political turmoil taking place within Kazakhstan — something that has had a major impact on the country's local mining infrastructure.
That said, central bank digital currency (CBDC) adoption has continued to forge ahead as usual, with reports suggesting that China's e-CNY wallet is now the most downloaded app within the region. Additional pilot programs related to the digital yuan have also continued to garner momentum across additional cities.
After having made their debut back in April 2020, a host of digital yuan-based pilot programs have reached a point in their lifecycles where the Chinese government is confident in rolling out the e-CNY for mainstream use, especially by the start of the upcoming 2022 Winter Olympics which is slated to take place in Beijing next month.
DeFi hacks caused largely due to centralisation issues, reports suggest
As per a report released by blockchain security firm CertiK, a vast majority of hacks and scams witnessed in relation to various DeFi protocols over the last couple of years have been due to the market being fairly "centralised". To elaborate, over the course of 2021 a total of US$1.3 billion worth of digital tokens — via approximately 45 scams — were lost, representing a rise of more than 60% when compared with 2020. The report goes on to note:
"These numbers underscore the importance of decentralisation and highlight the fact that many projects still have work to do to reach this goal. Centralisation is antithetical to the ethos of DeFi and poses major security risks. Single points of failure can be exploited by dedicated hackers and malicious insiders alike."
Another research study released recently states that over the last 12 months, the total value lost as a result of various DeFi hacks and scams lies at a whopping US$10.2 billion.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.