South Korea suffers a hack, German confidence is higher than ever, and what exactly is Bitcoin's problem? The Tradefair team brings you the latest on cryptocurrency as investors try to find their feet in digital currencies.
"Due to the media hypes, many people overestimate their knowledge of the opportunities and risks of cryptocurrencies as an investment."
- Dr Thomas Mangel, Postbank Chief Digital Officer.
The cryptocurrency market continues to thrill, perplex and baffle investors around the world as they try to gauge how far they want to delve into this relatively unventured new asset. But many traders remain unconvinced about the long-term legitimacy of digital currencies, especially with its volatile value.
Here are some of the latest stories changing the landscape in crypto trading:
South Korea falls victim to latest hack
Various news outlets, including the Wall Street Journal and CNBC, are reporting that Coinrail has been hacked. The fairly small South Korea crypto exchange tweeted that it was hacked on Sunday (June 10), resulting in Bitcoin tumbling by 10%.
That left the cryptocurrency at its lowest value for more than two months and sparked a broader sell-off of digital currencies. Smaller currencies like Ethereum and litecoin also suffered, falling 14% and 11% respectively.
This latest hack will serve to shake confidence in a market that is already precarious but for digital currency asset holders this appears to be at least part of the appeal.
An explanation for Bitcoin's poor 2018 performance
There are a number of issues preventing Bitcoin from having sustained success, according to a Forbes report. These include the prevalence of hackings like the recent South Korea attack, regulatory crackdowns, and a falling number of transactions. These are all shaking investor confidence and preventing any meaningful movement in asset value.
The article also touches on how cryptocurrencies as a whole are still dividing opinion, leaving many traders with too much risk about the long-term value of digital currencies like Bitcoin. Although big names like Apple cofounder Steve Wozniak have shown their support for it, Warren Buffett and JP Morgan chief executive Jamie Dimon have been clear about their scepticism. This has resulted in a confusing climate for investors and a shaky 2018 for Bitcoin so far.
Third of Germans positive about cryptocurrency
CCN reports figures from German bank Postbank that one in three Germans consider cryptocurrency to be an attractive investment opportunity. Results from the Postbank Digital Study 2018 showed that it is particularly popular among younger people, with half of all 18 to 34-year-olds interested in this type of investment.
Of this number, 14% said they wanted to buy or mine cryptocurrencies in the next year.
Dr Thomas Mangel, Postbank Chief Digital Officer, said that young people shouldn't focus entirely on cryptocurrencies for their investments as it was "highly speculative".
The study also highlighted the attractive factors of cryptocurrency for the more than 3,000 Germans surveyed. These included independence from established financial systems, anonymity, and its uniqueness.
"Due to the media hypes, many people overestimate their knowledge of the opportunities and risks of cryptocurrencies as an investment," Mangel added.