Bitcoin has lost 10% of its value thanks to the theft of 120,000 Bitcoins from Hong Kong-based digital currency exchange Bitfinex.
Is this latest blow enough to break investor confidence in the cryptocurrency?
One of main criticisms of Bitcoin investment has been its volatility. Between July 2013 and April 2014 its price jumped from $66 all the way to $1110, before declining to $345.
The first major blow to Bitcoin came in 2014 when Mt Gox, the dominant bitcoin exchange "lost" 774,000 bitcoins and filed for bankruptcy. While this did hit confidence in the currency, it also opened up the space for more competition between exchanges, which led to greater stability.
While bitcoin remains unregulated in most countries around the world, in 2015 some started to implement regulation and the currency appeared to gain credibility. In January 2015 Coinbase opened the first regulated bitcoin exchange in the US. Barclays bank announced they will be offering bitcoin services in partnership with a bitcoin exchange, making them the first UK high street bank to accept bitcoins.
From $150 at the start of 2015 Bitcoin enjoyed a steady growth throughout the year, peaking at $500 in early November - a 15 month high. Bitcoin was in fact the best performing currency in 2015.
Economic uncertainty led to more gains for Bitcoin in 2016 as news explained of how Bitcoin investors were shielded from the post-Brexit devaluation of the pound.
The Final Straw?
This makes the recent attack all the more disheartening for those who may have started to see stability in the cryptocurrency. As one reddit.com/r/bitcoin commenter puts it, "this seems to keep happening and is extremely bad press for bitcoin. At some point people might stop believing this thing has any future."
Another commenter warns of the dangers of storing bitcoin in online exchanges, encouraging individuals to keep them in their own personal bitcoin wallets.
"While it can be comforting to think, "I keep my bitcoin with Company", in reality, you're simply adding your money to an already large jackpot for hackers. No company is immune, and the bigger the target, the more complex hacking attempts can get."
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