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Bitcoin May Fall to $2,500 Before it Rebounds

The price of Bitcoin continues to take a tumble. The number one cryptocurrency according to market capitalization continues to experience a tumultuous 2018. One expert even predicts that BTC may bottom out at $2,500 as the crypto market continues to struggle.

Bitcoin Hovers Above $6,000

More than a week ago, BTC dropped $1,000 (from $7,700 to $6,700) in the space of a few hours as a wave of selloffs hit the market. The period coincided with the Coinrail hack as well as the U.S. government demand for information from top exchange platforms on suspicion of price manipulation.

In the past few days, BTC has experienced some degree of recovery, but all that was wiped away on June 21 as prices fell below $6,500. At the time of writing this article, Bitcoin is trading slightly above the $6,100 with a seven percent decline in the last 24 hours.

Signs of Bottoming as Bitcoin Selling Becomes Exhausted

In a recent CNBC article, Bill Baruch, the President of Blue Line Futures said that Bitcoin is approaching its bottom level. According to him, there are signs that the volatility of the market is “depressed.” Baruch also revealed that the BTC sales market has become supersaturated.

Fears of two back-to-back cryptocurrency exchange hacks may have pushed retail investors over the edge. The market is to stranger to panic selling at the slightest hint of a crisis. Conversely, Janine Wolf of Bloomberg declared recently that there is no end in sight for the current downtrend, saying:

According to the Directional Movement Index, bitcoin is on its strongest negative trend since the sell-off earlier this year. The index’s ADX line is currently at 39.3. Anything above 25 is considered a strong trend. Meanwhile, the index’s DVAN trend line, a divergence analysis that measures buying or selling pressure, is also giving off ominous signals.

Bitcoin Can Fall to $2,500 and Still Rebound to $14,000

No matter the extent to which BTC falls, experts like Luis Carranza, the founder of London Fintech Week believes Bitcoin will bounce back, saying:

Crypto is unpredictable. There are massive spikes and drops. $4500 could be the bottom, but nothing is preventing $2500 from being the bottom.

Bitcoin optimists point to the emergence of regulatory clarity and the influx of institutional investments as reasons why BTC will recover. Commenting on the role of clear regulations in the market, Gavin Pannu of the London Academy of Trading said:

Central Bankers have been quiet during the cryptocurrency bull-run and have been doing their due diligence with research and white papers carried out by regulators and experts in the field, and the market is anticipating an optimistic view from Central Banks. Regulating cryptocurrency would ease investors’ concerns.

On the subject of institutional money coming into the market, experts like Matthew Newton of eToro believe it breathes new life into the industry. According to Newton, the presence of large investors in the market is an “important development” in the crypto world. Notable names like Goldman Sachs and Nasdaq have made significant inroads into cryptocurrency in recent months. However, Newton believes that the proper regulations will make big money flow into the market, saying:

For institutions to fully commit, they’ll need more structured products and some sort of regulatory oversight. Reputational risk is a big issue for them, as is overcoming the media skepticism. Once an appropriate regulatory framework is in place, big-ticket money is likely to follow suit swiftly.

What is your Bitcoin bottom price prediction? Do you think BTC will attain the heights reached in late 2017? Keep the conversation going in the comment section below.

Image courtesy of the CoinMarketCap.

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Bitcoin (BTC) Still Stable After the Bithumb Hack

Many crypto-traders and enthusiasts woke up to news of a hack on popular South Korean Exchange, Bithumb. The financial enormity of the hack has been estimated at $30 Million in coins stolen by the hackers. The exchange made the announcement via twitter and said the following:

The exchange would also halt all deposits and withdrawals on the exchange and also convey the same via twitter.

Normal operations are yet to be announce by the exchange as it is requesting users not to deposit any funds to any of the Bithumb wallet addresses.

Observing the time the hack happened and checking the price of Bitcoin (BTC) during the event, we find that the King of Crypto was valued at $6,,700 levels. BTC would then drop to the levels of $6,612 due to the hack. This is a decline of only 1.3%. The King of Crypto is currently trading at $6,671 at the moment of writing this.

This indicates that the hack on Bithumb has not had any adverse effects on Bitcoin. This then translates that the entire crypto market has held steady amidst news of this hack. Checking the total market capitalization, we find that the value currently stands at $285.5 Billion.

The hack has managed to chip off around $5 Billion in total market capitalization which is 10 times less than what was lost during the Coinrail hack on June 10th. Also to remember on that day, is that 4 prominent exchanges were served with subpoenas by US Authorities who wanted their trading data to further their investigations on Bitcoin manipulation by the same exchanges. These two events resulted in the loss of approximately $50 Billion in the total crypto market capitalization over a two day period.

Crypto traders have proven their ability to handle another hack by not panic selling en masse as was seen during the above mentioned dates of June 10th and June 11th. Also to not is that before the Bithumb hack, the cryptocurrency markets were indicating some signs of recovery with Tron (TRX) and Ontology (ONT) leading the charge with double digit gains only yesterday. The current stability indicates that the upward path to a market recovery might be postponed by a few hours.

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Bithumb Hacked – $30 Million in Cryptocurrency Stolen

In what has become a recurring theme in the digital currency industry, another cryptocurrency exchange platform has suffered a cyber intrusion. Suspected cybercriminals have hacked Bithumb, the South Korea-based exchange platform. This incident is the second of such attacks on a crypto exchange platform in South Korea, in as many weeks.

Details of the Bithumb Hack

Bithumb announced on Wednesday, 20 June 2018 that $30 million in cryptocurrency had been stolen from its coffers. As at the time of writing this article, the platform hasn’t specified the coins taken from the platform. However, the Sentinel Protocol, a team that focuses on online hacking and scams, said that Ripple (XRP) was among the coins stolen in the attack.

Announcing the hack, Bithumb said:

[Notice for the suspension of all deposit and withdrawal service]

We checked that some of [our] cryptocurrencies valued about $30,000,000 was stolen. Those stolen cryptocurrencies will be covered from Bithumb, and all of [our] assets are being transferred to [a] cold wallet.

Timeline of the Hack

The exact time the hack occurred is unknown at the moment. However, Bithumb reportedly moved a significant amount of Ether tokens to its offline wallet. This decision was due to some unusual activity regarding unauthorized access to its online wallets. The platform announced a server check on June 16 – lasting from only a few hours. However, the server check, which was to upgrade Bithumb’s security protocols, exceeded the scheduled few hours.

At precisely 00:53 UTC on June 20, 2018, Bithumb disabled deposits on the platform. The exchange service also began to move all coins stored in online wallets to more secure offline wallets to prevent more theft.

Bithumb plans to compensate users affected by the hack – they intend to cover all the losses. The platform is the sixth-largest in the world, with an average daily trading volume of almost $400 million, according to CoinMarketCap.

Second Exchange Hack in As Many Weeks

Less than two weeks ago, reports emerged of another hack on a South Korean-based cryptocurrency exchange platform. This time, it was Coinrail, a relatively smaller exchange service. The Coinrail hack coincided with a significant dip in the prices of cryptocurrencies, with Bitcoin losing $1,000 in a matter of hours. Thus, some experts declared that the hack was responsible for the decline.

However, the consensus among most experts is that the recent investigation by the U.S. government on suspected price manipulation activities in the market as well as the expiration of Cboe Bitcoin futures contracts was the likely cause of price reduction. Still, the frequency of cryptocurrency exchange hacks is something that will leave many traders worried.

Before the Bithumb hack, the market appeared to be recovering as it gained more than $12 billion in total market capitalization. There seemed to be signs of an emerging bull run as Bitcoin stayed above the $6,700 mark. However, since the news of the hack emerged, Bitcoin dropped $200, eroding all the gains of the past few days.

At the time of writing this report, most of the top 100 coins have declined in the past few hours, presumably due to the Bithumb hack.

Do you think the Bithumb hack will cause a massive dip in the prices of cryptocurrencies? Keep the conversation going in the comment section below.

Image courtesy of Twitter (@BithumbOfficial) and CoinMarketCap

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South Korean Authorities Knowingly Postponed Crypto Regulation

South Korean government authorities have admitted to knowingly postponing crypto regulation in the country. The officials feared that doing so, would be interpreted by consumers as legitimizing the crypto markets. The South Korean authorities can be excused for having such fears. Cryptocurrencies and blockchain technology are uncharted territories in terms of regulation by governments. Giving guidelines instantly would have caused a frenzy of excitement in the crypto-markets that could have been unhealthy for everyone concerned.

Less than a week ago, South Korean authorities announced that the country will be regulating cryptocurrency exchanges in the same manner they regulate commercial banks in the country. The  Korea Financial Intelligence Unit (KFIU) will be spearheading the efforts together with local financial regulators.

The South Korean authorities have been waiting for a bill to pass that will give the said local authorities the jurisdictional powers needed to regulate cryptocurrency exchanges. The bill was as a result of financial authorities requesting the government back in September, to regulate the crypto markets to protect all investors and increase the security in the space. One needs only to refer to the the hacking of the Coincheck exchange back in March and most recently, Coinrail,to understand their concerns in terms of cyber security.

Similar regulation is expected in different countries such as Russia and the United States. With respect to the latter, the Director of The SEC’s Division of Corporate Finance, William Hinman, has clearly stated that Ethereum is not a security. Mr. Hinman is quoted as referring to Ethereum as follows:

When we think about how Ether today is operating, at least, we see a highly decentralized network, not the type of centralized actor that characterizes securities offerings. In its current state, we don’t see value regulating it.

His direction with respect to Ethereum is some welcome progress for the Crypto-verse. This means that in the next few months, the SEC will formally state its stand on the other numerous cryptocurrencies such as Ripple (XRP), Tron (TRX), IOTA (MIOTA) et al.

The SEC progress is evidently slow, but as has been seen with South Korean authorities, no government agency wants to make a rush decision with respect to cryptocurrency regulation guidelines.

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