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Bitcoin Plunges, Hong Kong Exchange Says Millions Stolen in Hacking

Bitcoin Plunges, Hong Kong Exchange Says Millions Stolen in Hacking

John Kicklighter, Varun Jaitly,

Talking Points:

  • Bitcoin extends fall as news of an exchange hack reignited cybersecurity fears with cryptocurrencies
  • Chinese Bitcoin exchange halts trading to investigate hack resulting in $65 Million in losses
  • Bitcoin prices rebound on open exchanges following the hack, only one exchange was effected

Bitcoin suffered one of its worst declines in years through the open of this week. News that trading was halted on “Bitfinex” exchange after a hack resulting in $65 million theft unnerved traders. Bitcoin fell a little over 24 percent through Tuesday’s low following the announcement of the hack. Bitfinex remains closed, however for though open exchanges the Bitcoin-USD pair (BTC/USD) rallied by more than 20 percent from lows through Wednesday. The hacked exchange is expected to remain closed for the next few days as investigations continue to uncover more information. Volume in BTC/USD trading spiked significantly through the decline and on the news of the hack. Average volume on for the cryptocurrency pair on the Bitstamp exchange rose to more than 22,000 on Tuesday and over 15,000 Wednesday – the 20-day average before these large movements was a comparatively restrained 4,400.

Cybersecurity remains a chief concern for the cryptocurrency and its numerous exchanges worldwide, as it is traded and used entirely over a network. The recent hack on the Hong Kong exchange is not the first. The largest bitcoin exchange in the world “Mt. Gox”, filed for bankruptcy in 2014 and admitted to being hacked, resulting in the loss of $460 Million in bitcoin. The cryptocurrency has become extremely popular since it was first introduced 7 years ago, to better understand its role in the financial markets check out DailyFX’s Forex Trading Instructor Tyler Yell piece on Bitcoin.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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