Bitcoin

Bitcoin Daily: $20K’s In Sight, Bitfinex Gets Hacked And People Second Mortgage Their Homes

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It’s no secret that cryptocurrency has been in the news, and it’s already been a particularly newsworthy week for bitcoin and its counterparts. Interest keeps surging as bitcoin futures finally meet the market. Digital currency platforms experienced shutdowns amid record transaction numbers for Ethereum, and others saw hackers make attempts to ransom platforms mid-trading. We’ve got this and other news in the daily bitcoin roundup.

Bitcoin Reaches Yet Another Record High

Cryptocurrency bitcoin’s $20,000 value may be within reach following yet another all-time high on Tuesday. Just two days after the first bitcoin futures launched on the U.S. stock exchange, the digital currency was recorded at $17,428.42 on the Luxembourg-based bitcoin exchange, Bitstamp.

“It’s remarkable how back in November, $10,000 seemed like a psychological end-of-the-year target,” said Lukman Otunuga, a research analyst at ForexTime. “With the current gravity-defying bullish momentum, it may be no surprise if bitcoin concludes 2017 on $20,000.”

Bitcoin’s record highs represent a 20-fold increase in value for the year. Chicago-based derivatives exchange Cboe Global Markets launched its bitcoin futures on Sunday, and CME Group is expected to launch its own on Dec. 17.

Coinbase’s Ethereum Roller Coaster

Major digital currency transaction platform Coinbase temporarily disabled the buying and selling of Ethereum twice on Tuesday, according to CNBC reports. The digital currency was experiencing record highs following a 23 percent surge, but was forced to suspend transactions due to high volumes. Bitcoin simultaneously spiked more than 5 percent in worth.

The first Ethereum transaction suspension on the Coinbase platform occurred Tuesday morning, and the currency’s trading resumed around 12 p.m. ET. The second suspension occurred around 2 p.m. and was resolved within the hour.

Coinbase was not the only digital currency trading platform to experience outages following Ethereum’s record-high prices. Its subsidiary GDAX exchange also experienced “partially degraded service” after 2:30 p.m.

Facebook’s David Marcus Joins Coinbase Board

Coinbase got a new board member this week. The company announced Tuesday that David Marcus, vice president of messaging for Facebook and former president of PayPal, was its most recent addition.

Though Marcus’ future contributions have not been divulged so far, he is keeping his position on the Facebook staff. He will help the Coinbase staff as the company continues to grow amid ongoing interest in cryptocurrency.

Bitfinex Gets Hit With Another Hack

Hong Kong-based Bitfinex, the world’s largest bitcoin exchange, has been hit with another cyberattack, as reported on Tuesday (Dec. 12) by TheStreet. The firm shut down its digital currency exchange services after recognizing a distributed denial of service (DDOS) attack, its second breach in two weeks.

DDOS attacks involve hackers working to overwhelm digital systems with activity from bots or other systems, giving them the ability to take control of the platform and/or request a ransom payout to give control back to the website’s owner.

Bitfinex noted the attack was ongoing, and that it was doing its best to find a solution that would migrate any trading traffic and protect client transactions on its service. The cyber issue came just after the U.S. Securities and Exchange Commission (SEC) released a warning about the safety of trading digital currencies online, which resulted in a slight dip in bitcoin trading prices.

Bitcoin Purchases Funded By Mortgages

Joseph Borg, president of the North American Securities Administrators Association, warned on Tuesday that bitcoin has entered the “mania” phase, with some people taking out mortgages just to purchase the cryptocurrency. In an interview with CNBC, Borg said bitcoin shares are on the “mania curve” and that there has to be a leveling off at some point.

“We’ve seen mortgages being taken out to buy bitcoin … People do credit cards, equity lines,” Borg said. “This is not something a guy who’s making $100,000 a year, who’s got a mortgage and two kids in college ought to be invested in.”

Borg acknowledged that cryptocurrency is here to stay, as is blockchain,  the technology that underpins it. But he doesn’t think the moves by CME and Cboe will actually validate the digital currency market: “As [technology] continues to accelerate and continues to increase, regulators have got to understand what it is that the innovation’s coming up with, and we’re still trying to get educated,” he said. “We’re looking at it from a money transmission point of view, but that doesn’t cover the entire bitcoin space.”

SEC, CFTC Warn Of Bitcoin Investment Vulnerabilities

The SEC and the Commodity Futures Trading Commission (CFTC) have both released warnings pertaining to the continued surge of cryptocurrency trading, reminding investors they are at risk when participating in bitcoin and other digital currency exchanges.

“The relatively nascent underlying cash markets and exchanges for bitcoin remain largely unregulated markets over which the CFTC has limited statutory authority,” explained J. Christopher Giancarlo, head of the CFTC. He also warned of a “potentially high level of volatility and risk” involved in cryptocurrency trading and investing.

Similarly, Deutsche Bank economist Torsten Slok noted, “The worry, of course, that one can have is that [digital currencies are] catching on quite substantially. Of course, with the speed with which prices are going up, then you do wonder where prices will be even by the end of 2017. But we do think that in 2018, this, of course, will continue to be a topic.”

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