Bitcoin Price Dives 22% After $60 Million Bitfinex Hack

The price of Bitcoin has dropped quite a bit over the past 24 hours with the USD value plummeting to $480 per bitcoin. The price has partially rebounded however, hovering around $540 at press time. Meanwhile, much of the blame is being pointed at the compromised Hong Kong-based exchange Bitfinex.

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Bitfinex Breach Shakes Up The Community

On August 2nd, during the course of the day, the price of Bitcoin steadily dropped until mid-afternoon eastern standard time, when the currency’s value suddenly plummeted. This decline period was most likely due to Bitfinex announcing their security had been breached, resulting in stolen customer funds. The exchange immediately halted all services and posted this announcement on their website:

According to social media, the hack allegedly drained Bitfinex of 120,000 BTC (60 million USD). The company has not officially stated how much was stolen, nor whether they will reimburse customers. Other discussions have been pointing at the company BitGo, because their multi-signature services may have been a vector in the attack. The company denied fault, tweeting:

As we directly notified our customers earlier today, our investigation has found no evidence of a breach to any BitGo servers.

— BitGo (@BitGo) August 2, 2016

Across many forums, Bitcoin users went wild with commentary, and many complained about exchanges and the traders who store money on them. Lots of people have been upset by the hack, worried that mainstream media will use it to put Bitcoin in a negative light once again.

Other exchanges like Bitstamp who also use BitGo said via Twitter:

We would like to reassure all customers that Bitstamp’s implementation of multisig is fundamentally different from the one at Bitfinex.

Hack Propels Price Drop

Well before this incident, Bitcoin.com reported on the slow decline of the bitcoin price. At the time of the report, the value looked overbought, as charts revealed a bearish run with a downward trendline from the ascending channel pattern.

The Bitfinex incident may have just sped up the ongoing devaluation process, contributing to a decline of roughly 22% in a matter of hours.

Bitcoin’s price seems to have consolidated though, paring some losses. Now, everyone is eagerly waiting for the official news from Bitfinex on how the breach happened.

What do you think about the price and the Bitfinex hack?  Do you think the two are correlated? Let us know in the comments below.

Images courtesy of Bitcoin.com’s price index, Bitfinex, Pixabay 

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