Bitcoin, up a staggering 20% over the last 30 days, has continued its march higher this week despite a raft of problems for the world’s biggest cryptocurrency.
The bitcoin price hit $6,388 on the Luxembourg-based Bitstamp exchange last night after starting the year at under $4,000. The bitcoin price has also extended its lead over the wider cryptocurrency market, adding to its so-called market dominance—how much bitcoin contributes to the total value of all cryptocurrencies—which is now nudging 60%, its highest in six months.
Bitcoin has somehow added almost 7% over the last three-day trading perioddespite some $40 million of bitcoin (some 7,000 of the digital tokens) being stolen from the Malta-based Binance exchange, the world’s largest bitcoin and cryptocurrency exchange by volume, and Binance’s chief executive Changpeng Zhao sparking a controversial debate about “re-organizing” the bitcoin blockchain to recover the funds.
On Wednesday Changpeng Zhao, who is often known simply as CZ, revealed hackers had stolen funds from its customers and froze deposits and withdrawals from Binance accounts while it got a handle on the situation.
“The hackers used a variety of techniques, including phishing, viruses and other attacks,” CZ wrote in the statement, saying Binance is investigating the breach.
With only bitcoin and no other cryptocurrency stolen, it would be typical for the bitcoin price to move sharply downwards following the news, as it has done in the aftermath of previous large scale security breaches at major exchanges.
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Bitcoin continued its march higher, however, undaunted even by the storm created when CZ suggested he had spoken to major bitcoin miners and developers about trying to reverse the illicit transactions—something that would fundamentally change the nature of bitcoin.
Ultimately, Binance decided attempting to reorganize bitcoin’s blockchain was both unwise and effectively impossible.
CZ, the CEO of Binance, revealed he had spoken to other bitcoin and cryptocurrency leaders to discuss undoing the theft. TWITTER / CZ_BINANCE
Many bitcoin and cryptocurrency experts pilloried CZ and Binance for even considering the move.
“A reorg to recover exchange losses is like a bail-out for a bank mismanaging risk,” the widely respected bitcoin and crypto advocate Andreas Antonopoulos said via Twitter. “Fortunately, it’s so hard to pull off and so likely to fail that unlike banks, there won’t be a bailout here. Those who fail security get to eat the cost.”
There has been some positive news for bitcoin over the last week, however, predominately coming from social media giant Facebook.
Facebook has now decided to remove its restrictions on bitcoin, cryptocurrency and blockchain ads after allowing only some pre-approved ads to run previously.
“While we will still require people to apply to run ads promoting cryptocurrency, starting today, we will narrow this policy to no longer require pre-approval for ads related to blockchain technology, industry news, education or events related to cryptocurrency,” Facebook wrote in a blog post this week.
Meanwhile, Facebook’s planned bitcoin rival continues to draw attention, with a Blockchain Capital executive saying the recent revelations about Facebook working on a private cryptocurrency have “lit a fire in the pants of every major [financial technology] and financial institution in the U.S.”
Bitcoin has had a bad week, but the price has failed to reflect that.
Elsewhere, the industry is gearing up for one of the biggest events in the cryptocurrency calendar this week—Blockchain Week NYC and CoinDesk’s Consensus 2019 event, beginning Monday, May 13, and running all week at the New York Hilton Midtown.
This year headline speakers include FedEx’s Fred Smith, Fidelity’s Abigail Johnson, Twitter and Square’s Jack Dorsey, chairman of the U.S. Securities Exchange Commission, Jay Clayton, and U.S. presidential hopeful, Andrew Yang.