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Bitcoin plunges $200 after cyber attackers demand ransom using the digital currency

Bitcoin plunges $200 after cyber attackers demand ransom using the digital currency

  • Bitcoin fell from a record high after Friday's WannaCry cyberattack.
  • The digital currency hit an all-time high of $1,848.75 Thursday and on Monday traded near $1,676.42.
  • Analysts also pointed to increased Chinese selling.

A man talks on a mobile phone in a shop displaying a bitcoin sign in Hong Kong.

Bitcoin plunged from a record high hit last week to below $1,700 after cyber attackers locked up data in 200,000 computers Friday and demanded ransom in the digital currency. "It's a big hit to sentiment," said Brian Kelly, CEO of BKCM. "This is some negative publicity for bitcoin." Bitcoin fell more than $200 from an all-time high of $1,848.75 reached Thursday to a low of $1,644.64 Friday. The cryptocurrency steadied over the weekend and on Monday traded more than 5 percent lower on the day near $1,676.42.

One-month bitcoin performance

  

 

A virus called WannaCry hit 200,000 computers in at least 150 countries on Friday, according to the head of the EU police agency. The hackers demanded, for each computer, $300 in bitcoin within three days to unlock the files and threatened to double the fine after that, before permanently preventing access after seven days. Cybersecurity firm Check Point warned in a blog post Sunday, not to send any funds as no one who had paid had yet reported receiving their files back. Relatively few have paid the ransom. CoinDesk Research Analyst Alex Sunnarborg said Monday that $51,300 in 193 transactions were sent to the three bitcoin addresses connected to the malware.

Pickup in Chinese trading volume

In addition to profit-taking on the hacking, Kelly attributed bitcoin's decline on Monday to a drop in prices on the Hong Kong-based Bitfinex exchange, where prices had been artificially elevated due to withdrawal restrictions. Expectations that those restrictions will soon be lifted brought Bitfinex prices for bitcoin closer to the lower price of other exchanges. "A little bit of a price support has been removed," Kelly said. Chinese trading volume more than doubled its share, from 8.2 percent on May 1 to 22.8 percent Monday, according to analysis from Sunnarborg.

Even with the decline of the last few days, the volatile cryptocurrency has nearly doubled in value since the end of March.

Chuck Reynolds
Contributor
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