The last 48 hours have blind sided many crypto traders and enthusiasts with two events that have left the crypto-markets in turmoil.
The first one, was the confirmed hacking of popular South Korean exchange known as Coinrail. The total theft during the hack has been estimated to be at around $40 Million but the ripple effect on the cryptocurrency markets has been larger. Analysis indicate that the total market capitalization lost $20 Billion from Saturday night before the hack, rolling into Sunday as news of the hack spread like wild fire in the crypto-verse.
CoinRail further gave information of the tokens that were hacked without disclosing the exact amount stolen of each. These were the tokens of NPXS from the Pundi X project, ATC from Aston and NPER token from the NPER Project.
What then followed soon after news of the hack, is additional news of four exchanges being investigated by the United States CFTC (Commodity Futures Trading Commission) with respect to ongoing investigations of Bitcoin manipulation since last December. The exchanges in question are Coinbase, Bitstamp, Itbit and Kraken. These 4 exchanges have been Subpoenaed by the CFTC and the US Department of Justice after delaying to provide trading information when requested to do so by the CME back in January. This is the red flag that brought in the CFTC and the acceleration of the queries about BTC manipulation.
The cryptocurrency markets have since responded by dropping an additional $20 Billion in volume. The current total market capitalization now stands at $293 Billion indicating that the crypto-markets have lost a total of $47 Billion due to both events highlighted above.
One of the first individuals to notice the market drop after the news, was cryptocurrency spokesperson, John McAfee who had this to say via Twitter.
Do not panic about the drop in Bitcoin’s price. It is an overreaction to the news that Bitstamp, Coinbase, itBit and Kraken are being investigated for price manipulation. This will delay the bull market by no more than 30 days. Don’t buy into the fear. Buy the coins.
He would later give similar advice with respect to the ongoing EOS MainNet launch and the effect of the above events on the price of EOS.
EOS launch: ignore any immediate price fluctuations due to the investigations of Bitstamp, Coinbase, itBit and Kraken. Any dop will be short lived and followed by a boom.
In conclusion, the last 48 hours have been a rough time for the cryptocurrency markets. However, the crypto-verse has gone through similar, if not worse events, that forced a knee jerk reaction. One needs only remember the early year FUD associated with South Korean and Chinese regulation as well as the Coincheck hack that left over $500 Million in NEM (XEM) stolen. The crypto-markes shall recover as advised by McAfee.