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Here’s Why Bitcoin Plunged Below $7,000 This Weekend


Bitcoin plunged sharply on Sunday afternoon, and currently sits at about $6,750 -- close to the 2018 low it touched in April. And it's not just bitcoin that got hammered: Most other cryptocurrencies are in the red, and many are faring even worse. The reason? Another cryptocurrency exchange revealed it had been hacked, which appears to be giving investors second thoughts about the asset class.

Here's a look at the latest cryptocurrency prices, and some details about the incident that's sending them lower.

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Today's cryptocurrency prices

Here's a look at the 10 largest cryptocurrencies by market capitalization, and how much the prices of each have changed over the past 24 hours.

Cryptocurrency Name (Code)

Price in U.S. Dollars

Day's Change

Bitcoin (BTC)

$6,762.20

(7.1%)

Ethereum (ETH)

$529.17

(6.9%)

Ripple (XRP)

$0.58

(7.6%)

Bitcoin Cash (BCH)

$932.01

(10%)

EOS (EOS)

$10.90

(20.3%)

Litecoin (LTC)

$106.48

(5.9%)

Stellar (XLM)

$0.25

(8.3%)

Cardano (ADA)

$0.17

(11.5%)

IOTA (MIOTA)

$1.36

(9.9%)

TRON (TRX)

$0.047

(13.1%)

Data Source: www.investing.com. Prices and daily changes as of June 11, 2018 at 9:30am EDT, and prices are rounded to the nearest cent where appropriate.

The latest crypto-hacking incident

South Korean cryptocurrency exchange Coinrail tweeted over the weekend that it had been hacked, and the news sent cryptocurrency values sharply lower.

To be clear, Coinrail is a rather small exchange when compared with the likes of Coinbase and Binance. And there's no indication (so far) that bitcoin or any of the other leading cryptocurrencies were among those coins affected by the hack. Coinrail's tweet specifically mentioned Pundi-X, a smaller cryptocurrency that is quite popular on that particular exchange. Although we don't have much concrete information, reports indicate that about $40 million worth of coins were stolen in all.

Just to put things in perspective, consider that Pundi-X had a trading volume of roughly $2 million in the past 24 hours -- and this is during a very active day for the currency. Meanwhile, bitcoin's 24-hour trading volume is close to $5.8 billion. Even the most thinly traded cryptocurrency in the top 10 (Stellar) had a daily volume of more than $50 million in volume. In other words, this is a minor cryptocurrency we're talking about.

With that in mind, there are a few reasons why the resultant plunge in bitcoin's value makes sense. First, this is just the latest hacking incident. The largest crypto-hack in history happened earlier this year, and this indicates that exchanges' vulnerability remains an issue.

Second, South Korea is a major cryptocurrency market: It accounts for roughly 12% of trading volume, according to the Financial Times , putting it behind only Japan and the United States.

In fact, concerns about the plans of South Korean regulators were a major reason behind the terrible performance of cryptocurrencies earlier in 2018. And it's certainly possible that the hack of one of the nation's own exchanges could bring renewed scrutiny from its regulators.

Only time will tell whether this particular robbery will have any longer-term impact on the realm of cryptocurrencies, but for now, it's safe to say that the theft has traders around the world on edge.

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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 .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Personal Finance , Stocks
Referenced Symbols: ETH , BCH , EOS , LTC , TRX


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