Slump in Bitcoin extends to over 50%
THE 2018 sell-off in cryptocurrencies deepened, wiping out $42 billion (R552bn) of market value over the weekend and extending this year’s slump in Bitcoin to more than 50 percent.
Some observers pinned the retreat on a hack at a South Korean exchange, while others pointed to lingering concern over a clampdown on trading platforms in China. Cryptocurrency venues have come under growing scrutiny around the world in recent months amid a range of issues, including thefts, market manipulation and money laundering.
Bitcoin has dropped 11 percent since 5pm New York time on Friday and was trading at $6 782.42 as of 10.30am in London yesterday, bringing its decline since December 29 to 53 percent.
Most other major virtual currencies also retreated, sending the market value of digital assets tracked by Coinmarketcap.com to a nearly twomonth low of $298 billion. At the height of the global cryptomania in early January, they were worth about $830bn.
Enthusiasm for virtual currencies has waned partly due to a string of cyber heists, including the nearly $500 million theft from Japanese exchange Coincheck Inc in late January.
Triggered
While the latest hacking target – a South Korean venue called Coinrail – is much smaller, the news triggered knee-jerk selling, according to Stephen Innes, head of Asia Pacific trading at Oanda Corp in Singapore.
“This is ‘If it can happen to A, it can happen to B and it can happen to C’, then people panic because someone is selling,” Innes said.
The slump may have been exacerbated by low market liquidity during the weekend, Innes added.
Coinrail said in a statement on its website that some of the exchange’s digital currency appears to have been stolen by hackers, but it didn’t disclose how much.
The venue added that 70 percent of the cryptocurrencies it holds are being kept safely in a cold wallet, which isn’t connected to the internet and is less vulnerable to theft. Two-thirds of the stolen assets – identified as NPXS, NPER and ATX coins – have been frozen or collected.