NEM and other cryptocurrencies seemed unfazed by a $500 million theft

One of the 12 reasons that could cause Bitcoin’s price to fall to $1,000 or less is the threat from hacking. There have been numerous successful cryptocurrency thefts over the years with the latest, and potentially the biggest. Coincheck, one of Japan’s largest cryptocurrency exchanges, disclosed that 500 million NEM tokens were sent “illicitly” outside its exchange. A NEM is valued at just over $1 so the theft is north of $500 million.

Not surprisingly NEM’s value fell after the theft was announced. It dropped from $1.07 to just under a dollar and is currently at $1.02. As long as the theft doesn’t force NEM tokens to be unusable, and the hackers certainly don’t want that, the reasons for owning and using them hasn’t changed. Coincheck has said that it knows where the tokens were sent and that it might be possible to recover them. This may help explain why NEM’s price has regained most of its losses.

Bitcoin’s price also fell when the NEM theft was disclosed but quickly recovered. It is the largest CC by market cap at just under $200 billion, depending on its latest trade, and its visibility helps guide the CC market. Probably the most well-known and largest theft of Bitcoins was Mt. Gox, a Bitcoin exchange in Japan. It was handling over 70% of all Bitcoin transactions but was hacked in February 2014 and 850,000 Bitcoins were stolen. At the time, they were valued at $450 million and would currently be worth about $10 billion.

The CC market is much larger now than when Mt. Gox was hacked in 2014 and forced into bankruptcy. The NEM theft is 6% of all NEM tokens and is the 10th largest CC by market cap at approximately $9 billion. NEM’s total market cap is about 1.5% of all CCs $587 billion market cap according to coinmarketcap.com. Even if the NEM tokens are not recovered, it appears that the CC market can weather even large thefts.

Just last month Youbit, a South Korean Bitcoin exchange, was hacked. Almost 4,000 Bitcoins or 17% of its assets worth about $48 million were stolen. A Reuters article said that all customers CC assets would be marked down by 25%. That isn’t very comforting to CC investors.

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