Price of Bitcoin Continues Charging Upwards Despite Binance Security Breach

Written by:
Aaron Goldstein
Published on:

Bitcoin, now accounting for upwards of 70% of all funding for online gambling sites operating in the so-called "grey" and "restricted" markets (encompassing some three quarters of the globe), continues to see huge gains in recent days despite ongoing issues with one of the largest cryptocurrency exchanges.

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Binance first alerted the public to a massive hack that occured on May 7.

We have discovered a large scale security breach today, May 7, 2019 at 17:15:24 (UTC). Hackers were able to obtain a large number of user API keys, 2FA codes, and potentially other info. The hackers used a variety of techniques, including phishing, viruses and other attacks. We are still concluding all possible methods used. There may also be additional affected accounts that have not been identified yet.

The hackers were able to withdraw 7000 BTC in one transaction, the exchange noted.

On Sunday May 12, the company offered a brief, but reassuring update.

Use Bitcoin to Fund Your Online Betting Account for as Little as 0.0036 (trading price May 12, 2019) or USD$25

Dear Binancians,

I would like to share our 3rd update on the security incident. For previous updates, please see this past update and our AMA.

Our team is making progress and has been working through the weekend. In the past few days, we have made some significant overhauls to our system, with a large number of advanced security features added and/or completely re-architected. We will share details on some of the changes later.

We aim to fully resume deposits and withdrawals on Tuesday. The time will be communicated at a later stage, depending on how the testing goes. This upgrade will require a trading halt. We will update you again tomorrow.

I will keep this update short, and share a longer update after we fully resume all operations.

- CZ

Meanwhile, the price of Bitcoin seems not to have been affected by this negative news.  After reaching a high of $7586 earlier in the day Sunday, the price of Bitcoin was settling in around $6900.

$7586 is the highest the price has hit this year.  That also represents a nine-month high.

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What's Pushing Bitcoin?

On Friday, analysts from investment bank Canaccord Genuity told Forbes they expect bitcoin to rally hard over the next 24 months, potentially returning to its late 2017 highs due to next year's halving event, where the number of bitcoins rewarded to miners will be cut by 50%.

"Now four months into 2019, we note for the third time the striking similarity in bitcoin’s price action between 2011-2015 and 2015-2019," Canaccord researchers wrote in a note to clients. "While this simple pattern recognition has little fundamental basis, we note that bitcoin does operate on a four-year cycle of sorts, as the halving of bitcoin’s mining reward occurs approximately every four years.

"Bitcoin has started to form the spring 2019 bottom we began mentioning last year, although a close look at the chart suggests the recovery may be slightly ahead of itself. Looking ahead, if bitcoin were to continue following the same trend, the implication is a slow climb back toward its all-time high of ~$20,000, theoretically reaching that level in March 2021."

Ryan Boltman of Chepicap says that "whale manipulation" could be at play.

With Bitcoin's climb hitting resistance around $6,400 following the recent price break at $6,000, it would not be uncommon for traders to flip short on their trades as Bitcoin cools off and performs a healthy retrace after climbing over $2,000 in recent weeks from $4,200. Whales could be manipulating the price and keep it up, forcing short traders to liquidate their trades and squeeze the price higher. There is a good possibility price can push higher if the squeeze on shorters is successful.

Boltman also points to institutional growth as a possible driving force behind Bitcoin's resurgence.

The growth in BTC this year could also be credited to the amount of institutional investors getting involved in bitcoin. This year has seen the growth of bitcoin on a larger scale with some bigger players starting to enter the market. Most of the institutional players that are entering the market have made it very clear that bitcoin could be priced at upwards of $50,000 in the near future. Perhaps the perfect time to enter was in January when bitcoin was trading at $3,400. 2019 has seen major players such as Etrade, TD Ameritrade and Fidelity all look to move into the crypto space, and potentially offer BTC in the coming months.

- Aaron Goldstein, Gambling911.com

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