Bitcoin prices recovered to reach a record high on Tuesday as investors in the space shrugged off news that another cryptocurrency was hacked.
Bitcoin hit $8,362.30 earlier in the day, an all-time high. It traded 0.4 percent higher at $8,266.84 at 2:14 p.m. New York time, according to CoinDesk.
But the widely followed cryptocurrency fell more than 5 percent overnight, briefly breaking below $8,000, after CoinDesk reported that Tether, a start-up that offers dollar-backed digital tokens, said hackers stole more than $30 million from its investors.
According to a now deleted post on its website, Tether said a “malicious action by an external attacker” resulted in the theft, CoinDesk said.
Tether also reportedly said in the removed post that it was attempting to recover those tokens to prevent them from entering the broader cryptocurrency market.
Traders in the space “have become conditioned to ‘sell first, and ask questions later,’ which is why we probably saw the sell-off after the Tether news,” said Sean Walsh, partner at Redwood City Ventures. He also noted that Tether makes up a very small part of the cryptocurrency market and that problems with Tether “have zero fundamental impact on the health, strength, and security of the Bitcoin network which has been operating successfully since 2009.”
Bitcoin has had a stellar year, leaving other asset classes in the dust. Year to date, bitcoin is up more than 730 percent. The S&P 500, meanwhile, has risen more than 15 percent.
Source: CoinDesk, CNBC