After the Biggest Cryptocurrency Hack Ever, Bitcoin, Ethereum, and Ripple Are All Up — Why?

The $500 million hack doesn’t seem to be scaring investors too much. On Friday, Jan. 26, news broke that a Tokyo-based cryptocurrency exchange had been hacked, and hundreds of millions of dollars’ worth of cryptocurrency had been taken. While you may think this could scare investors and send the cryptocurrency market plunging, that hasn’t been the case. In fact, most major cryptocurrencies are up since the news of the hack.

Most cryptocurrencies are down today, but gained over the weekend

Bitcoin (BTC-USD), Ethereum (ETH-USD), bitcoin cash (BCH-USD), and Cardano (ADA-USD) are all down slightly on Monday, with Ripple (XRP-USD) being the only gainer in the top five. However, the prices of most cryptocurrencies jumped sharply over the weekend, and while they seem to be giving back some of their gains on Monday, most are still in the green.

Here’s a look at the five largest cryptocurrencies by market capitalization, and how much each has changed over the past 24 hours.

Cryptocurrency Name (Code) Price in U.S. Dollars Day’s Change Change Since Friday 1/26/18
Bitcoin (BTC-USD) $11,300.00 (4.1%) 2.9%
Ethereum (ETH-USD) $1,179.30 (4.9%) 12.7%
Ripple (XRP-USD) $1.29 0.5% 6.6%
Bitcoin Cash (BCH-USD) $1,666.90 (3.8%) 4.4%
Cardano (ADA-USD) $0.60 (5.4%) (3.2%)

DATA SOURCE: INVESTING.COM. PRICES AND DAILY CHANGES AS OF JAN. 29, 2018 AT 1:30 P.M. EST, AND PRICES ARE ROUNDED TO THE NEAREST CENT WHERE APPROPRIATE.

The biggest crypto hack in history

Japan-based cryptocurrency exchange Coincheck said that hackers stole around 523 million of NEM (XEM-USD) coins, which is currently the 10th-largest cryptocurrency by market cap. At the time of the theft, the value of the stolen coins was approximately $535 million, although unsurprisingly, the market price of NEM (XEM-USD) coins has dropped a bit since the hack.

A hooded individual using a laptop.

IMAGE SOURCE: GETTY IMAGES.

This makes the hack the largest ever in the cryptocurrency markets, in terms of dollar value, surpassing even the infamous Mt. Gox exchange bitcoin hack. In 2014, the now-defunct exchange lost 850,000 bitcoins (750,000 from customer accounts and 100,000 of their own) in a hack. At the time, the value of the lost bitcoin was roughly $460 million. Today, the Mt. Gox bitcoins would be worth $9.6 billion.

To be clear, no bitcoins (BTC-USD) were taken in the Coincheck hack, nor were any other cryptocurrencies affected, other than NEM (XEM-USD), according to the company. Furthermore, the NEM (XEM-USD) coins were stored in a hot (internet-linked) wallet, which isn’t the case with most major exchanges’ holdings. For comparison, Coinbase says that 98% of its digital currencies are kept offline. So, it’s not that big of a surprise that cryptocurrency investors didn’t panic once they had a chance to digest the news.

While Mt. Gox subsequently imploded following its hack, Coincheck has given no indication that it’s in financial trouble. In fact, the company said in a blog post that it planned to return a total of $425 million to affected customers — a big difference in the potential effect on investor confidence.

Matt Frankel has no position in any cryptocurrencies mentioned. The Motley Fool has no position in any cryptocurrencies mentioned. The Motley Fool has a disclosure policy.

 

IMAGE SOURCE: GETTY IMAGES.

Author: Matthew Frankel (TMFMathGuy)

REFERENCES HERE

Leave a comment