Experts claimed that hacks on cryptocurrency exchanges have no direct effect on Bitcoin Prices
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The hack of Bithumb, the sixth largest crypto exchange, sees losses of $30 million. This has led to a temporary shutdown of the exchange, where all pay,ents and deposits were suspended. Bithumb had noticed abnormal access and implemented a netwrok security check. However, the Sentinel Protocol, a project specializing in hacking, scam, and fraud detection, failed to stop the hack from happening days later. Source: cointelegraph - Aaron Wood.
Compared to the other hacks that have occurred, Bithumb’s hack had minimal impact due to the immediate movement of funds into the cold wallet. Bithumb also had sufficient reserves to compensate the affected investors. Charlie Lee, founder of Litecoin, commented that the hack of a crypto exchange does not affect Bitcoin’s (BTC) fundamentals just in the same way as a bank robbery should not affect the price of gold. Source: cointelegraph - Helen Partz.
In fact, every time a hack occurs, the bug in exchange and other breaches would be highlighted to the developers. The security compromise will strengthen current coin exchanges to build sturdier softwares. We do not expect enhanced security to happen overnight, neither will we be able to prevent all hacks from happening in the future.
According to Lee, despite the drop by 60-70 percent over the past year, Bitcoin is still “going really well,” claiming that its network has become much stronger over the past few years. Lee says that the current price of Bitcoin seems to be “disjointed from the actual development of Bitcoin,” and suggests that the price will rebound and “come back up fairly soon.”
Source: cointelegraph - Helen Partz
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Crypto markets have seen much larger fluctuations and events that have happened in the past, sending prices up or down by more than 20 percent. Therefore it comes woth no surprise that “mini fluctuations” happen all the time. While a bank robbery does not affect the price of gold, cryptocurrencies are not directly affected by hacks. The suspension of crypto exchanges might lead to lower trading volumes, which is what is truly causing a drop or rise in the coin prices.
In an article on Forbes - Charles Boviard, analysts weighed in stating that “Investors have just become increasingly desensitized to this type of news," said Yazan Barghuthi, CEO of Jibrel Network. Taking that Bitcoin has made a tremendous gain in value over the last year from $420 beginning 2017, it is in a strong position to move forward.