Bitcoin Falters Following $31 Million Cryptocurrency Theft, Sets New Record High Right After
Bitcoin suffered a setback this Tuesday after news broke of an electronic heist that robbed owners of nearly $31 million worth of Tether tokens. This dip proves to be more of a temporary hiccup, however, as Bitcoin goes on to push well past the $8,000 mark.
Tether, like Bitcoin, is a digital token that's designed to match the U.S. dollar, with each unit worth one USD and is supposedly backed by fiat currencies including the dollar, euro and yen. The company announced the breach earlier this week, as they posted on their website.
"$30,950,010 USDT was removed from the Tether Treasury wallet on November 19, 2017 and sent to an unauthorized bitcoin address," the update announced. The USDT tokens were taken from the startup company's own wallet, and they have since taken steps to invalidate these units.
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To do this, they blacklisted the wallet where the stolen tokens were taken to via a software update, and distributed this modified exchange rules to everyone who deals with Tether tokens. This move effectively froze the stolen Tether tokens in that account, rendering the hackers unable to profit, as Quartz pointed out.
Just in case any one of these tokens slipped pass the blockade, Tether also announced that they are not honoring them in exchange for Bitcoin or fiat.
The market panic after the hack, short term as it was, brought up questions about Tether's claims that their currency is really backed by $400 million in U.S. dollar reserves. Bitcoin itself will recover quickly after that.
In New York trading, at least, Bitcoin climbed as high as $8,339 before settling in at around $8,200, as Bloomberg reports.
The immediate plan that Tether put into action as soon as they discovered the hack seem to have helped restore confidence to the token, and to cryptocurrencies in general, at least to some degree.
Likely scenarios could see Bitcoin rising to about $8,553 unless fluctuations drop it below $7,800, which could dip it down to $7,400 following expected market reactions in that case, according to Coindesk.
