$15 Billion Cyberattack Strikes Bitfinex 👨🏻‍💻

🐺 Hi pack-mates,

This is Howling Markets, the launchpad that helps you get a grip of the most recent financial news in a simple and fun way!

Today we will be covering:

• Education: What Is Ripple? 🪙

• Fund Manager Places a $2.8 Billion Bet on Middle East 💰

• $15 Billion Cyberattack Strikes Bitfinex 👨🏻‍💻

• Equity and Debt Markets Daily Update ⚖️

• And more!

Market Watch 👀

What is Ripple?

Ripple is a payment settlement system created in 2012 in the United States to compete against SWIFT, the international payment system that is commonly in use to make international transactions.

The unique aspect of this payment system is that it is based on an open source protocol, and it supports not only fiat currencies, but also cryptocurrencies and commodities. As a matter of fact, Ripple is much more than a simple payment system. It is also a currency exchange and remittance network.

The idea behind the birth of Ripple was to create a faster and much cheaper payment settlement system that uses as a unit of exchange its cryptocurrency, called XRP. So, to perform any international transfer of any currency, you will be charged as fee an amount of XRP.

An international payment through Ripple has a fixed fee of 0.00001 XRP, where one XRP is currently trading at around 60 cents. Just to put things into perspective, on average a SWIFT transfer might cost anywhere between $5 to $50.

Additionally, XRP is an extremely interesting cryptocurrency as it has been built on its own blockchain and it does not adopt the Proof-of-Work consensus mechanism adopted by Bitcoin.

As opposed to Bitcoin, where to add blocks to the blockchain and to verify transactions there is a race to solve complex mathematical algorithms, XRP is based on cooperation and not competition. XRP uses a freely downloadable verification tool from which the users can select whichever block they prefer to verify and register the transaction.

Do you believe that such an innovative payment system could replace the current intrabank payment system?

Fund Manager Places a $2.8 Billion Bet on Middle East

GQG Partners, an asset manager firm based in Florida, has just invested $2.8 billion in middle eastern companies and it is expected to continue to grow its position during the foreseeable future.

The rationale behind this orthodox investment has been the approach of the different governments from the area to start diversifying away from oil, composing the majority of their investments.

Additionally, this change has been paired with a substantial downsize of positions in the Chinese economy, which plummeted from 40% of portfolio allocation to a mere 5% in less than 5 years.

Rajiv Jain, the firm’s founder and CEO stated that even if China makes up 27% of MSCI, the emerging market’s index, the country has made it particularly difficult to invest in their stocks due to the international geopolitical tensions and the excessive privatization in most crucial economic sectors.

As opposed to China, middle eastern stocks only make up 8% of MSCI but present better growing opportunities if diversification becomes a key objective for the local governments.

Do you believe that these stocks might currently be a great buy opportunity?

Today’s Howling Question

And now, it is time for our howling question!

In this newsletter we have mentioned Ripple, do you know how its token XRP performed in 2023?

a)  -25%

b)  -5.0%

c)  +30%

d)  +80%

e)  +220%

Try to answer the question by yourself, and then check the correct answer after the last interesting news!

$15 Billion Cyberattack Strikes Bitfinex

The cryptocurrency world continues to be extremely fragile and exposed to attacks. On the 14^th of January, Bitfinex and Binance have been targeted by an unknown attacker for several billion dollars.

This cyberattack revolved around a technology used by the XRP Ledger called “partial payments”. This technology is used to sped up the transaction process and it induces the security system of an exchange to process a transaction even if the available balance amount is less than the amount to be transferred.

However, in such cases it happens that the actual transaction is carried out for the maximum available balance before cancelling the rest of the order. So, what this attacker tried to do was to “trick” the exchange in transferring close to $15 billion in XRP tokens by creating a transaction with only a few cents on the account.

It is safe to say that the XRP Ledger and the Bitfinex security system correctly handled the situation, and the crisis was everted. But what is even crazier about this story is that Bitfinex was the second try for the attacker. They initially tried and failed on Binance and then they moved over to failing also on Bitfinex.

Even if in this occasion everything resolved for the best, do you believe that this emerging sector is sufficiently secure?

Equity and Debt Markets Update ⚖️

And now, our daily markets update!

Today’s market update will once again be extremely short as today the markets are closed!

This time the occurrence is the Martin Luther King Jr. Day, a federal holiday in the United States that celebrates the birthday of this iconic on the third Monday of January each year.

Answer

The correct answer is d) +80%.

Despite a violent spike during the first half of July, the token has been growing relatively steady and it has closed 2023 up +81.51% with respect to the end of 2022.

Howl-Worthy Memes 😂

🐺 See you next time!

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