Bitcoin Resurgence Brings Back Old Phenomenon of Wild Weekends

Amid this year’s rally, Bitcoin has resumed one of its old habits: it’s back to posting big moves on weekends.

By:BLOOMBERG
| Updated on: Feb 05 2023, 10:21 IST
This malicious Firefox add-on stole thousands of dollars in cryptocurrency
Bitcoin
1/6 A particular malicious add-on for Firefox, that goes by the name Safepal Wallet, has managed to scam users by stealing money from them and managed to live on the Mozilla add-ons store for seven months before getting detected and removed. (Pixabay)
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2/6 Safepal is essentially a cryptocurrency wallet application that is capable of holding more than 10,000 types of assets, including Ethereum, Bitcoin, Litecoin, etc. However, Safepal is an official smartphone app that is available for Apple and Android both. There are no known “authentic” Safepal browser extensions. (BleepingComputer)
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3/6 According to a post shared by a user who goes by the name Cali on the Mozilla Support forum, within a few hours of installing and logging in to the Safepal Wallet extension with their real Safepal credentials, they saw their wallet balance drop to $0 from $4,000.  (Mozilla Support Forum )
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4/6 While investigating Safepal Wallet, BleepingComputer came across the phishing domain used by the add-on and this webpage was also listed as the "support site" link on the fake add-on's home page: https://safeuslife.com/tool/. WHOIS records indicate the this phishing site was registered in January this year via Namecheap. And BleepingComputer reported that at the time of them filing this report, the webpage is still live and it instructs people to key in their "12-word Backup Phrase in the correct order to pair your SafePal Wallet". (BleepingComputer )
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5/6 Once the recovery phrase is entered and the form is submitted, the page refreshes without any noticeable response and the recovery phrase is sent to the attacker. A stolen recovery phrase can give attackers control over your wallet along with the ability to access and transfer funds. (Pixabay)
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6/6 Five days after Cali publicly reported the incident, a Mozilla spokesperson responded to say that they were investigating the issue and the page for Safepal Wallet has since been removed by Mozilla. The Mozilla add-ons store now has one-star reviews posted by some users that are warning others to not download “Safepal Wallet”. (BleepingComputer )
Bitcoin
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Bitcoin resurgence brings back old phenomenon of wild weekends. (AFP)

Amid this year's rally, Bitcoin has resumed one of its old habits: it's back to posting big moves on weekends, a phenomenon that's become an intriguing characteristic of the cryptocurrency market.

Take last Sunday, when it gained 3.4%, a similar amount to what it notched the Saturday on the weekend prior. And the Saturday before that, the coin advanced 5.5%.

That Bitcoin posts large moves is nothing new. But the token, like all other cryptocurrencies, trades around the clock, every day of the week, counter to most other assets, which tend to trade Monday through Friday on regulated exchanges. And it's been seen in crypto markets in the past, with Bitcoin shooting higher — or posting big down days — while other assets are taking a rest from work.

The most compelling theory on the strong weekend moves might be that liquidity is thinner, meaning that price swings on large orders can be more pronounced, says Noelle Acheson, author of the “Crypto Is Macro Now” newsletter. Liquidity has been thinner for Bitcoin recently, with traders and investors staying on the sidelines and hodlers hodling, she says.

“Since the beginning of the year, volatility has picked up — still not at ‘normal' levels, but getting there,” Acheson said. “This should herald the return of the weekend phenomenon, with lower weekend liquidity leading to stronger moves as traders and investors tentatively come back into the market.”

Crypto tokens have skyrocketed at the start of the year as other riskier assets like stocks also rise and as investors look ahead through the remainder of 2023, when they expect the Federal Reserve to dial back in its monetary policy hawkishness. Bitcoin has risen roughly 40%, bringing its losses from its November 2021 all-time high to around 60%. Ether, the second-largest by market value, has rallied a similar amount.

But, given the troubles that plagued the digital-assets space all of last year — including the downfall of a number of previously-grand projects like trading platform FTX — investors have largely shied away amid the turmoil. Trading volumes remain in the gutter: the hundreds of exchanges worldwide — clocking in at 650, according to CoinGecko — have recently been seeing 24-hour trading volumes of around $100 billion, compared with more than $200 billion in November 2021. Thinner volumes can, therefore, exacerbate any weekend price moves.

Still, no one knows for certain why crypto prices go berserk on weekends. A similar phenomenon — sometimes dubbed the overnight effect — can be found with stocks, too.

“Companies release a lot of information after the markets close because they want people to have time to digest it — and by the time you come in the next morning, you have a chance to say, OK what's the impact of that news,” said Kara Murphy, chief investment officer at Kestra Investment Management. “And some of that could be true in the crypto space where people are maybe waiting to release information on a Friday evening so that you have the weekend to digest it. That would be the fundamental explanation for why that's happening.”

Chris Gaffney, president of world markets at TIAA Bank who oversees a currencies desk, attributes yet another potential reason: less dependence on institutional buying in crypto compared with traditional markets.

“It's more of the individuals,” he said in an interview. “For that reason, you could see wider swings on the weekends just because it is just individuals trading.”

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First Published Date: 05 Feb, 10:20 IST
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