In times gone by, any exchange breach or hack would have set shock-waves through the crypto community and sent markets plunging. It may be a sign of a maturing market but the aftermath of the Binance breach has not really been that bad for Bitcoin in the grand scheme of things.
Bitcoin Price Reaction
Within an hour of the world’s largest exchange by trade volume announcing that it had been hacked to the tune of at least 7,000 BTC, the king of crypto plummeted as expected. However the drop has not been as severe as many had expected, at least in the short term.
Bitcoin had been trading above $5,900 for the best part of the past 24 hours. It had been poised to break $6,000 and push even higher, according to some analysts. When Binance posted the announcement BTC dumped around 3 percent back to $5,795 according to CMC. On other metrics websites such as Livecoinwatch it didn’t go below $5,800 and on TradingView.com with its ‘Bitfinex premium’ BTC did not fall below $6,000. The trading chart platform is still reporting a BTC price of almost $6,100.
At the time of writing Bitcoin had already started to recover and was back up to $5,890. Crypto traders and analysts are still very bullish in spite of the recent news and mainstream media FUD storm that is likely to follow.
If Bitcoin remains relatively unaffected by this negative development it will confirm the formation of a bull market and definite trend reversal. Alex Krüger, an economist and crypto analyst, added to this sentiment stating “In a bear market this would have easily have caused a deluge.” Ethereum guru Anthony Sassano added to the sentiment;
The largest crypto exchange gets hacked and the market shrugs it off within a few hours – I think it’s safe to say that we’re definitely out of the bear market and a new cycle has begun.
— Anthony Sassano (@sassal0x) May 8, 2019
The long term prospects for Bitcoin remain unaffected by this incident and it is still trading above the 50 day moving average for the first time in a year;
$BTC Weekly Chart.
— CryptoFibonacci (@CryptoFib) May 8, 2019
Community Reacts, Binance Responds
Tron’s Justin Sun has already stepped up with an offer to donate the equivalent of the stolen Bitcoin in USDT ‘to buy $BNB, $BTC, $TRX & $BTT if @cz_binance agrees’. Binance boss CZ in return expressed his thanks to the community for their offers of donations to recover the lost funds, which in reality is a drop in the ocean for the company.
Thanks for the support, really appreciate it. But currently no need. We will cover the loss from the #SAFU fund, there is enough. We are hurt, but not broke.
We are working hard to resolve the issue, so that everyone can deposit and withdrawal again. Will take some time. https://t.co/0j4J0fk99W
— CZ Binance (@cz_binance) May 8, 2019
As Messari Crypto founder Ryan Selkis pointed out in a recent tweet;
“Binance hacked for $40m. Not existential, they’ll make that back in 4-6 weeks. What *is* alarming is that they have $2 billion in custody … just in BTC. Likely $3 billion+ in total crypto. Was that a known figure previously?”
A further debate has ensued about the possibility of a BTC blockchain rollback but that has been largely met with disapproval from the crypto community. The complete transparency by Binance and instant declaration of full refunds will help to refute a lot of the mainstream media FUD that is likely to follow, however the bottom line is that the cryptos desperately need decentralized exchanges to fulfill their intended purpose as peer to peer currencies.
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