BITHUMB Hacked AGAIN!? Algorithmic Trading Caused Bitcoin’s Surge!??
Today we have a Daily Token Review and two really awesome cryptocurrency news segments to share with you. Just before I start, if you guys like our content and want to keep updated with the crypto space, please make sure you hit the like and subscribe button!
On Coinmarketcap, we’ve got a pretty red market to kick the day off, with the only green or increase coming from Binance Coin. For our top three Bitcoin, Ethereum, and XRP, we see a decrease of 2.16, 3.40 and 3.65 percent respectively. Now, there are a few tokens with a few big drops. These include Bitcoin Cash, EOS, and Cardano with declines of 4.44, 4.01, and 4.12 percent.
Now if I scroll down to the top 20 tokens, you can see here that there is also a sea of red with only NEO and Ontology in the greens with a 3.89 and 5.49 percent increase. It’s interesting to see that NEM has declined by 5.99 percent, and Tezos is no longer in the top 20 anymore.
While the cryptocurrency market has gone through a bullish surge over the last two days, the market is probably now undergoing a bearish phase to correct the surge. It’s unsure how long this will last, there’s a lot of divided opinions across the board. Cryptocurrency enthusiasts believe that the worst is over and the market will hit a new overall bull run soon, while some experts believe that the rally is only temporary if institutional investors and consumers don’t support the industry.
Now onto the news. According to Cointelegraph, South Korean cryptocurrency exchange Bithumb, was hacked for $19 million in a suspected insider Job.
The company confirmed in a company statement that it spotted an abnormal withdrawal of cryptocurrency via its monitoring system on Friday March 29.
Quickly after, the exchange suspended asset withdrawals and deposits on the platform after realising that their exchange had been compromised. Since no other evidence of external exploit has been discovered the company suspects that it was an inside job. Bithumb has informed the government agencies and authorities and is conducting an internal investigation. It is also working with major exchanges in the hope that they can recover some of the missing funds. Bithumb’s remaining assets have been moved from its hot wallet to its cold offline wallet to prevent any further losses, until they have identified the manner of the breach and fixed any vulnerabilities.
Now, it’s unfortunate that this is the third time Bithumb has been hacked within the span of 2 years. In 2017, a hacker stole $7 million worth of Bitcoin and Ethereum, while a year later, $31 million of XRP was taken. Bithumb did, however, manage to recover $14 million of the stolen funds last year. It’s such a shame that Bithumb’s reputation will take another beating considering its third hack in 2 years. According to CoinDesk Korea, Lee San Sung did however mention that “overseas exchanges such as Bitfinex manage their EOS wallets with a multisig system, but Bithumb managed it with a single key.”
While this information wasn’t confirmed at press time, if it’s true, that’s some pretty poor security measures for a big cryptocurrency exchange. It’s a shame that after the 2nd hacking in 2 years, they still don’t prioritize security as an important factor when it comes to running an exchange.
Now onto the second news item. While analysts have no idea why the bullish rally began just a few days ago, Bloomberg recently published an article that highlights algorithmic trading and hedge funds as a potential factor.
For those who aren’t aware, algorithmic trading is a method of executing a large order using automated pre-programmed trading instructions accounting for variables such as time, price, and volume, to send small slices of the order onto the market overtime. Algorithmic trading has without a doubt increased in popularity, with the number of algorithmic traders jumping in the last seven months with 17 algorithmic or quantitative funds since September.
Oliver Von Landsberg-Sadie, the chief executive officer of London-based cryptocurrency firm BCB Group, believes that, Perhaps, the surge in Bitcoin in less than an hour at the start of Asian trading on Tuesday was triggered by automated software setting up to execute a 100 million dollar trade across three exchanges. That could be another possibility we could take into account. A lot of people see algorithmic trading as a manipulative tool, but I believe they’re definitely a way to make markets more efficient and to help minimize market impact. And while many algorithmic hedge funds that emerged in 2017 to 2018 are now on stealth mode, I wouldn’t rule this possibility out, and I’d keep it in the back of my mind when trying to understand what happened this Tuesday.
So what are your thoughts on this situation?
Are you disappointed that Bithumb has been attacked again? The Third time in two years!
And do you think the events of Tuesday this week regarding the bullish run, was related to algorithmic trading?
Let me know what you guys think in the comments below!
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Disclaimer: Cryptopig content is written by a team of blockchain passionate people. We are not registered as investment advisors. Don’t take the information in this post as investment advice and make sure you do your own research before investing. Cryptocurrencies are a very risky investment, never invest more money than you can afford to lose.