Banking and Finance

Bitcoin plunges the most in nearly a month after its record-breaking surge past $24,200

2 Mins read
  • The decline comes after Bitcoin rocketed to record highs above $24,200 as adoption among institutional investors and companies like Square, and PayPal increases.
  • A reported hack at the hardware wallet firm Ledger as well as the US Treasury’s proposed rules that would reign in the cryptocurrency likely weighed on investor sentiment.

Bitcoin retreated from record highs on Monday after the digital currency topped out above $24,200 for the first time ever.

Helping push bitcoin higher over the year has been increased adoption among both institutional investors and corporations, evidenced by Square and PayPal’s recent investments in the crypto asset.

But a 6% sell-off in Monday to just below $22,000 represented the deepest drop in nearly a month. The onset of the decline was likely a result of a hack in a popular hardware wallet for crypto users: Ledger.

A database of personal information like e-mail addresses, phone numbers, and home addresses for more than 270,000 Ledger customers were published on RaidForums, an online marketplace for buying, selling, and sharing hacked information, according to The Block.

In July, Ledger publicly disclosed that it suffered a data breach, compromising that data of at least 9,500 customers. That hack over the Summer is likely the source of the much larger data breach, Ledger said in a tweet.

The hack of personal data for Ledger users is likely resurfacing painful memories of crypto hacks over the years that have resulted in owners losing actual bitcoin, and serves as a reminder that crypto assets still operate in a wild-west like environment with little to no regulation.

The Treasury department is trying to change that, with Treasury Secretary Steven Mnuchin unveiling a proposal for new rules over the weekend for those that want to move their bitcoin off exchanges and onto personal wallets.

Users would have to comply with know-your-customer requirements and provide their personal information about the owner of the wallet if the amount transferred to the wallet is greater than $10,000. One of the key aspects of bitcoin is the anonymity of its users transacting in the cryptocurrency.

Under the proposed rules, exchanges would be required to report individual or groups of transactions that add up to more than $10,000 to the Financial Crimes Enforcement Network.

Despite the correction in bitcoin, it still remains one of the best performing assets in 2020, notching year-to-date gains of more than 200%. Bitcoin pared its losses and was down just 1.5% to about $23,000 as of 11:10 a.m.

Markets Insider
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