Bitcoin is once again heading into negative territory. When we published our previous article about the decline in Bitcoin, we received a lot of feedback explaining that the price fall was all because of 'one large seller'.
The price did bounce back since then, peaking at just over $400, but is now once again on a downward journey:
The price has dropped 12.5% in 9 days and this time there is no 'sell wall'. A contributing factor could be the collapse of cryptocurrency exchange Moolah. $1.5 million worth of bitcoin formerly held with the company has gone missing, and is believed to be in the possession of former CEO Alex Green.
In his last public statement, Green confirmed that he is in fact a suspected con artist and was formerly named Ryan Kennedy. This announcement made on October 19th coincides perfectly with the current down turn.
Is this Green/Kennedy character to blame? While $1.5 million in sales may not be enough to justify the current decline, an event such as this certainly shakes investor confidence. Individuals who had btc held with this exchange have effectively lost their money. There is a very strong belief that the money has been stolen by this alleged con man, but there is no recourse against him, and no way to prove that he has the money, because it's all in bitcoin.
The anonymity offered by the blockchain has made this a crime which, can only be alleged. We can all see that the balance of the btc was transferred into, then promptly out of a single address. We can say for sure that the money is gone, but there is no way of tracing where it went, who took it, or where it is now.
The fact that this has happened shows a significant weakness Bitcoin. We can all see that the money was stolen, we can all see the bitcoin address used by the thief, but because this is bitcoin, the transactions are irreversible, and the identity of the thief is secret.
All it took was one man with access to the right part of the Bitcoin system, an exchange. He did not need the combined power of the worlds computers to defeat the security of the blockchain because his crime is right there on the blockchain. The features which are meant to make bitcoin safer than government backed paper have been used for a broad daylight crime with only one suspect, and no usable evidence.
This event should cause a change in attitude toward Bitcoin. If you knew that the money in your bank account could vanish over night, would you leave it there, or would you find somewhere else to keep your money?
What do you think, is the recent theft to blame for the current downturn, or is it something else?