Gox tragedy, as one of the leading Japanese cryptocurrency exchanges Coincheck reported a whopping $532 Mn loss of holdings after the website was hacked earlier this week.īitcoin has already plunged to $11K, even as the Nobel Prize-winning economist Robert Shiller has suggested that Bitcoin will ultimately collapse in the long run.ĭoes that scare cryptocurrency enthusiasts? Absolutely not. All Rights Reserved.At a time when Bitcoin was getting bashed at the WEF Davos Summit 2018, in Japan, Bitcoin faced another Mt. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2019 and/or its affiliates. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. Factset: FactSet Research Systems Inc.2019. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. "Exchanges that understand the increasing importance of security - for not only their longevity, but as a competitive advantage - will do better," Kwon said. He say the cryptocurrency industry will have to adapt and become more secure as an increasing number of big investors move in. "The markets will probably adjust over time," said Hosho Group's Kwon. Some experts say vulnerability to hacks is the result of the infancy of virtual currencies compared with more established assets like stocks and bonds. That's because they can spread their risk across various platforms, as well as invest indirectly through derivatives and other avenues that are generally less accessible to regular investors. Major investors - like banks and insurance funds - will probably be less concerned by these kinds of hacks, Arslanian added. (Coincheck said in March it had compensated its customers for their losses out of its own funds.) This makes them much more vulnerable to losing their investments in the event of a heist like those at Coinrail and Coincheck. PwC's Arslanian said the people with most to lose from hacking incidents are mom-and-pop investors who are more likely to deposit their entire cryptocurrency savings with one platform out of convenience. This is "not conducive to high security, or the broader adoption of cryptocurrencies," he added. "Confused and concerned regulators periodically clamp down," prompting some exchanges to relocate elsewhere, said Eiland Glover, CEO of Tennessee-based blockchain company Kowala. In the United States, the Securities and Exchange Commission has been increasing its scrutiny of digital assets. Japan, meanwhile, officially recognized bitcoin as legal tender last year and started licensing exchanges - but it took a tougher line after the Coincheck hack. Some industry insiders say that complicates efforts to make exchanges more secure.Īt one end, China has tried to ban trading in bitcoin. Authorities around the world have so far taken different approaches in their attempts to regulate virtual currencies.