Bitfinex Hack Restoration Sets the Crypto Market on an Upward Trend

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Bitfinex Hack Restoration Sets the Crypto Market on an Upward Trend

The United States Department of Justice has announced the most significant financial seizure in its history, recouping more than $3.6 billion in losses from the Bitfinex hack. Unus Sed Leo (LEO) rose over 70% yesterday to new highs as traders assessed the possibility of a supply bottleneck in its market. There has also been a CDD and Exchange inflow spike that CryptoQuant has noted.

DOJ Restores Bitfinex Hacked Crypto 

In 2016, hackers stole about 120,00 bitcoin from the crypto exchange Bitfinex users’ accounts. The stolen bitcoin, once valued at $66 million, is now worth more than $4.5 billion. Altogether, Bitfinex lost 119,754 BTC in the breach, implying that the cryptocurrency associated with the event was worth around $4.5 billion at the time of the DOJ’s seizure. In a Tuesday statement, Bitfinex reiterated its vow to utilize the recovered monies to purchase back and burn LEO tokens. It stressed that the exchange would finish the process within 18 months of receiving the funds. According to DOJ officials, they want to set up a legal mechanism for victims to recoup their stolen Bitcoin payments. They did not, however, say how long the procedure would take. If history is any guide, crypto reimbursements due to exchange-related hacks take time. Victims of Mt. Gox’s $460 million breach, for example, is still waiting for reimbursements.

CDD and Exchange Inflow Spike

The LEO bulls ignored these red flags on February 8 and increased their bids for the token. The token will become more valuable in the long run due to the upcoming supply crunch. As a result, LEO’s price rose to $8.144 on February 8. However, it experienced a correction that saw the token decrease to $7.04 early the next day. The CDD spiked by 61.7% from the DOJ announcement, while the exchange inflow spiked 38.3%. The CDD accounts for the coins spent. This case shows that long-held coins are moving significantly, hence volatility risk. On the other hand, exchange inflow accounts for the number of coins deposited into the exchange wallets. With its increase, it shows a bearish sign and could lead to volatility too.

Mixed Views on the LEO Rally

Adam Cochran, a shareholder at activist venture capital company Cinneamhain Ventures, noted issues with the current LEO price increase, saying that not all recovered funds would pass via Bitfinex unless those holdings belonged to the exchange itself. He also stated that he would not purchase LEO “personally” if Bitfinex offers a rapid buyback. In contrast, Alexander Mamasidikov, co-founder of crypto wallet provider MinePlex, described the recovery of Bitfinex assets as a “right fundamental” that might support LEO’s future growth.

The Rest of the Crypto Market

After the DOJ seized the stolen Bitfinex crypto, it seems to have positively impacted the general crypto market. After weeks of trading in the red and attempting to reclaim last year’s highs, investors’ trust in cryptocurrency is finally being restored. During today’s session, BTC/USD reached an intraday high of $44,187.45 as bulls re-entered the race after yesterday’s correction. The rise has brought prices closer to $45,000, but bitcoin must first clear resistance at $44,800. Nonetheless, many feel that a run to $50,000 is unavoidable after the upward crossing of the ten-day (red) and 25-day (blue) moving averages. During Wednesday’s session, Ethereum was reaching a three-week high as prices moved closer to its long-term resistance level of $3,400. On Tuesday, ETH/USD reached an intraday high of $3,163.40 after bulls purchased at $3,022 support. This movement occurs as the 14-day RSI is now at 59, its highest level since November 12, when prices were above $4,400.
Adam Robertson

Adam is outgoing young lad who likes adventures and discovering new things. Despite his boring life, He loves writing about cryptocurrencies and exploring what blockchain technology can do for the coming digital world where all adventures will be virtual.