We're in a Crypto Contagion! ☢️
When Bitcoin was $600
GM 🔆
This is This Week In Web3, here to serve you the hottest updates in Web3 with a side of food for thought. We keep it quick and short, with only the updates that matter. 🔥
Here’s what we have for you today:
Quick Numbers and News
Abundance of Crypto Contagions
Job opportunities in Web3
Estimated reading time: 02:40 mins
Weekly Wrap: Numbers & News 🗞
Quick Web3 updates curated for you:
Mutant Ape Planet creator arrested in NY for alleged $2.9M NFT ‘fraud’
The Goobers NFT founder and Twitch streamer DNP3 admits to gambling investor funds
Bitcoin celebrated its 14th birthday this week, and an analyst predicts BTC price to surge 2.5x by June
Mastercard taps Polygon for Web3 artist accelerator
Indian crypto exchange CoinSwitch releases proof of reserves
Catch the Metaverse Summit 2023 in Mumbai in March
What is Crypto Contagion? ☢️
When a large institution like the cryptocurrency exchange FTX implodes, it drags others down with it; this dynamic is referred to in finance as contagion.
💡 The origin of ‘contagion’
Economists started using the word “contagion” after Thailand’s currency, the baht, collapsed in July 1997 (Asian Financial Crisis). The resulting financial crisis spread through East Asia to Russia and eventually South America.
And since the last year, the term has attached itself to the crypto industry as the real or perceived spread of an averse crypto event from one company to another.
📉 The abundance of Crypto Contagions
Since FTX filed for bankruptcy on November 11, the list of the companies that have had to disclose their “exposure” to FTX and its related companies have been growing.
On-chain data suggests that this crypto contagion links back to the epicenter of another contagion, Terra fiasco. In May last year, the algorithmic TerraUSD lost its 1:1 peg with the U.S. dollar, wiping out $40 billion in a matter of days.
But this domino effect isn’t new.
🕵️ The Silk Road Contagion
In 2013, the FBI shut down the Silk Road, a dark web marketplace that was accessible through the Tor privacy browser, and arrested Ross Ulbrecht. Buyers and sellers used bitcoin for transactions, because it afforded them more anonymity than using fiat.
At the time of the hack, the exchange accounted for 70% of all Bitcoin trading volume.
Leading up to the hack, the Bitcoin price hit an all-time high of $1,000 in November 2013—around the time when Silk Road founder Ulbricht was arrested. But two months after Mt. Gox shuttered, the price of BTC had plummeted to $360 and sent a chill through the market.
At the time Coinbase published a joint statement condemning the “tragic violation of the trust of users.” And ironically enough, that statement describes exactly the kind of shady accounting practices that have since come to light in the FTX collapse.
History rhymes, right?
When Mt. Gox happened, BTC was worth ~$600. If you had Bitcoin with Mt. Gox in 2013, what would you do? 👀
💰 Sell for a big profit or HODL for dear life?
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Aave serves as the foundation of most of DeFi and is one of the most reliable protocols in the ecosystem. Many institutional and retail users can now use DeFi thanks to Aave.
Learn more about the Aave ecosystem 👉HERE👈
Work in Web3 👩💻
Jump into 2023 with a job in web3 👇
Smart Contract Developer 🛠 Instadapp
Generative AI Creative Writer ✍️ Webaverse
Blockchain Security Engineer 🔐 The Stacks Foundation
That’s a wrap for This Week in Web3; see you next week! 🚀
If you’re an early-stage web3 builder going from 0 to 1, holler at our creative-capital studio Spacekayak and let’s create something extraordinary through design! ✨