Bitcoin Crash - Coinrail Hacks or Market Manipulation

The June Bitcoin Crash – Coinrail Hacks or Market Manipulation?

  • The Bitcoin price today is now officially less than half of what it was at the start of 2018
  • Sudden 12% price pullbacks are being blamed on the hacking of obscure South Korean exchange, Coinrail
  • In terms of market cap, the recent Bitcoin market crash has seen the cryptocurrency market lose over $42 billion in value

As a Bitcoin trader, have you ever happened to do business with South Korean exchange Coinrail?

Thanks to Coinrail being the 90th least most popular cryptocurrency exchange in the world, there is a strong likelihood that you’ve never heard of the platform. – At least not until recently. Coinrail, after all, is currently being blamed for single-handedly wiping $42 billion from the cryptocurrency market. Specifically, thanks to a June 10th weekend hack.

There is just one problem. Namely, that Coinrail is most certainly not to blame for the recent Bitcoin Crash.

Coinrail Did Not Just Cause The June Bitcoin Crash

Why Coinrail did not cause the most dramatic Bitcoin crash of the year to date, is simple:

  • During the recent hack, no Bitcoin were actually hacked or stolen from Coinrail
  • Only altcoins and ERC-20 ICO tokens were lost by Coinrail
  • Coins hacked included $19.5 million of NPXS ICO tokens and $1.1 million of Tron tokens
  • 70% of digital assets (including Bitcoin) were successfully moved to offline cold storage by Coinrail, prior to hackers gaining access to these
  • Due to the relatively low volume of coins lost during the Coinrail hack, the hack itself is altogether minor in comparison to $400 million hacks on exchanges like Coincheck

What Has Caused The Current Bitcoin Crash?

According to Changpeng Zhao, CEO of Binance, Coinrail has little if anything to do with the June 10th Bitcoin price flash crash. Instead, Zhao has drawn a comparison between current cryptocurrency market conditions and those of 2012, 2014. And 2015. – Specifically, conditions which saw similar Bitcoin crashes before sudden price spikes.

Is Bitcoin Still Following a Long-Term Upward Growth Trajectory?

Needless to say, sentiments by the likes of Changpeng Zhao, are overwhelmingly positive. Long-term holders want to believe that Bitcoin will eventually reach John McAfee’s 2020 goal of $1 million. In truth, however, it’s becoming increasingly difficult to predict what the Bitcoin price might do next.

Comparison to data from 2012 – 2016, does seem to indicate that Bitcoin is still following a long-term upward parabolic growth trajectory. At the same time, though, because Bitcoin has only been in existence since 2009, price forecasters simply don’t have enough data to predict where prices might go from where we are now in 2018.

Is Manipulation & Regulation to Blame for the Current Bitcoin Crash?

Arguably the most overlooked reason for mid-June’s Bitcoin crash concerns recent U.S. Bitcoin price manipulation investigations.

Coinbase, BitStamp, and several other exchanges are all currently being investigated by the U.S. to alleviate (or prove) Bitcoin Futures Market manipulation accusations. Meanwhile, regulators in Canada are pushing to have all cryptocurrency transactions greater than $10,000, immediately reported by exchanges to relevant authorities.

All of the above being the case, the recent June Bitcoin Crash, is most likely a delayed reaction to U.S. investigations and new regulatory moves. New to market investors may, therefore, want to delay buying bitcoin for now. At least until the full outcome of such investigations is publicised.

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