Bitcoin: Resilience underrated

"The bigger aim is to create the expectation of the broader public for fundamental human rights – digital rights in their ability to control all these aspects of their digital lives. Cryptography is the only thing that can give power to the individual in the Information Age." — David Chaum, Founder Elixxir

The Big Block

Yesterday’s news from Japan about a major crypto exchange hack was noteworthy in a couple of ways. First, at $60M the Zaif theft makes the all-time top five exchange hacks. Small potatoes compared to the billion in tokens stolen from Coincheck ($533M) and Mt. Gox ($460M) but significant money nevertheless. Second, what’s noteworthy is how little impact the news had on the price of bitcoin.

You can clearly see the “oh no!” decline from around $6300 to trades approaching $6100. But the snapback rally to $6500 was almost instant. And perhaps more significantly, as this post was written bitcoin was actually trading above the price before news from Japan broke about the exchange hack.

Compare this result to the recent rumor about Goldman Sachs delaying its plans for crypto trading. That sent the bellwether crypto spiraling down without a corresponding “relief rally” occurring immediately. Indeed, bitcoin sits around 10% below the levels it was at just two weeks ago. But perhaps even more intriguingly than the comparison between the two news events is that a significant theft of coins was unimportant. As we discussed there at The Block recently, two Yale economists studying what moves the bitcoin price found that hacks were among the most significant negative indicators going. 

Read More on The Block (4 Minutes)

Around The Block

Crypto pioneer David Chaum announces his new project: Elixxir

David Chaum is a famed cryptographer known for founding ecash and Digicash — one of the first examples of digital currency. Chaum claims his new project, named Elixxir, will fix one of the biggest shortcomings of current cryptocurrencies: speed. — More

Congress requests crypto tax guidance from the IRS

On Wednesday, members of the Senate Committee on Finance and House Committee on Ways and Means issued a letter to the IRS requesting their current digital currency strategy as well as any existing policies and procedures. — More

Japanese cryptocurrency exchange hacked for ~$60M — More

Coinbase provides clarity around proprietary trading accusation — More