The cryptocurrency market continues to suffer a major blow this morning after a significant hack on a South Korean exchange rocked investor confidence.
CoinRail, a popular exchange, was breached on Sunday, losing a predicted $28 million in lesser-known altcoins.
The cryptocurrency market itself has lost more than 50 percent of its total value in 2018, with the likes of bitcoin and Ripple losing roughly 10 percent in the last three days.
Bitcoin dropped to $6,569.15 as of 10am this morning, with the rest of the cryptocurrency market following suit.
Ethereum prices sit at $489, Ripple at $0.554110 and Litecoin trades for $99.42 in the slide.
Why are cryptocurrencies falling today?
It is difficult to pinpoint an exact reason for the massive slide the cryptocurrency market is experiencing right now, though some analysts are pointing the finger at CoinRail’s recent hack.
CoinRail, a south Korean cryptocurrency exchange, announced they had suffered the attack on Sunday, mentioning that several smaller altcoins had been stolen by the attackers.
The announcement didn’t mention any of the bigger cryptocurrencies like bitcoin or Ripple, but that didn’t stop prices dropping as investors saw a threat to the market.
As a result, each cryptocurrency on the market lost an average of 10 percent on the weekend, ending in a 70-day low.
CoinRail trades more than 50 cryptocurrencies and was among the world’s Top 100 most active venues, with a 24-hour volume of about $2.65 million, according to data compiled by Coinmarketcap.com before news of the hack
This morning, the slump continues to ravage the market, with bitcoin, Ethereum, Ripple, and Litecoin all losing between 4-9 percent of their value.
Analysts are split on whether this continued drop is a sign of a long-term issue or a knee-jerk reaction.
Ran Neu-Ner, a cryptocurrency trader, told CNBC’s Fast Money: “We keep going down, and we’re testing new lows.
”Sixty-two-fifty is the next point. If it goes under that, we’re going to test 5,900.”
The prices will be the lowest the market has seen since February, plummeting well below the average peak of $19,500 in 2017.
Neu-Ner said: “We’re the internet before you had a real browser.
“And people are talking about a few exchange hacks. Those are to be expected from an industry that’s got a market capitalisation of $300 billion; when we expect that one day this thing is going to have $20 trillion [in market cap].”
However, eToro senior market analyst Mati Greenspan thinks that the most recent hack should not be taken out of context.
He said: “The narrative that such a small hack caused such a large price reaction has definitely been overplayed.”
Stephen Innes, head of Asia Pacific trading at Oanda Corp. in Singapore, agreed with the sentiment, saying: “The markets are so thinly traded, primarily by retail accounts, that these guys can get really scared out of positions. It actually doesn’t take a lot of money to move the market significantly.”