The biggest fear of Bitcoin users were realised today after the price dropped by more than $100 compared to last week. We reported that at one point the price plunged below $620 on Monday, but today the average Bitcoin price fell as low as $526 at one point, only to gradually increase up to $565 during the course of the day.
Reports that one of the largest Bitcoin exchanges was hacked and that almost 120,000 Bitcoins were stolen caused the price drop. A representative of the exchange asked for patience, while the company is investigating the breach and its causes.
At One Point the Price Dropped below $530
Today’s events have showed us that what happens on Bitcoin exchanges has a very strong influence on the price of the Bitcoin. Those who are in the Bitcoin business long enough remember what happened two years ago when Mt. Gox, a Tokyo based Bitcoin exchanged declared bankruptcy. More than 850,000 were stolen and that caused the exchange to declare bankruptcy.
Luckily, the amount of stolen Bitcoins is much smaller now, and Bitfinex, the exchange from which the Bitcoins were stolen announced that it will manage to overcome this serious problem. That certainly brings at least some hope to Bitcoin owners who decided not to sell and the price shows some signs of recovering already.
The price at some exchanges dropped as low as $485, but it gradually grew to about $565. A while ago we noted that the market cap fell below $10 billion, but now it is even below $9 billion, or at $8.7 to be more precise. The available supply is still above 15.5 million Bitcoins.
The traded volume in the past 24 hours has been a staggering $331 million, which is a lot more than usual. This is due to the fact that a lot of Bitcoin owners were selling as the news of the hacking spread. Others were quick to buy, predicting that the price will quickly start growing again, which it did.
The Attack Won’t Have Long Term Consequences
Bitfinex is the biggest dollar-Bitcoin exchanged an the third largest Bitcoin exchange altogether and therefore it is not at all surprising that the theft of almost 120,000 caused quite a stir in the market. The stolen Bitcoins were worth over $75 million at the time when they were stolen, but since the event caused a significant price drop, they are now worth somewhat around $65 million.
A representative of Bitfinex had confirmed that some of the Bitcoin owners that were trading on this exchange had their Bitcoins stolen. The theft couldn’t have come at a worst time, as just a while ago regulators in the USA warned that the digital currencies like Bitcoins might be a risk to financial stability.
However, the fact that period briefly after the hack saw a record in terms of Bitcoin trading volume shows that despite the fear people are still trading and Bitcoins are in demand. Judging by how quickly the price started growing, it is almost certain that the unfortunate event won’t have any long term consequences.
Bitfinex said that the company will do everything within its power to allow trading to continue as usual and experts said that this event will probably encourage Bitcoin exchanges and platforms to use even more sophisticated technology that will prevent further hack attacks.