The price of Ethereum continues to trade around $225. That is great news for Ethereum bulls given the Ethereum price analysis we published last week Ethereum Price Rising, Why It Must Continue To Rise From Here in which we identified $220 as the breakout level.
Although, purely from a price analysis perspective, Ethereum has a good setup at this moment in time, there is still this uncertainty around the SegWit event in Bitcoin. It could be a showstopper for all cryptocurrencies if no resolution is found. We are not saying that it will turn out bad, we are saying that there is no resolution, and, because of that, things can go all directions between now and August 1st (deadline for a SegWit resolution).
Meantime, it seems that the Ethereum price has not suffered so much from the fraud which took place last week. Israeli blockchain technology startup, CoinDash (a social-trading platform), launched their Initial Coin Offering (ICO) to let investors pay using Ethereum. What was supposed to be a big fundraising round, turned out to be a biggest nightmare for CoinDash. Within 3 minutes of the ICO launch, hackers stole $7 million worth of Ether tokens. The hacker(s) somehow managed to change one tiny but most important detail on CoinDash website: The Ethereum wallet address itself. This change made all the investors send Ethers to the hacker’s address.
Needless to say, this made investors angry who were fallen prey to the scam without any fault of their own.
Some users demanded a proof of the hack, arguing it could be an inside job. CoinDash doesn’t know who exactly is responsible for the attack. That said, those that sent their Ether to the wrong address may not be entirely out of luck. CoinDash says it will still issue tokens to anyone who was swindled (so long as it happened before the site was shut).
While CoinDash is yet to disclose how the breach occurred, others are already beginning to speculate on what must have caused the hack. Wu Guanggeng, the COO of China’s mining pool Bixin, for instance, posited on Weibo that the breach may have actually been made via the domain name server provider.
This incident could put a dent in the ICO hype. Investors are giving away millions of dollars to startups for early stage development of the product in fundraising rounds that often close in minutes. This ICO hype led Ethereum price for $8 to $400 in less than six months. At the time of writing Ethereum is trading at $226 according to Coinmarketcap. The whole cryptocurrency market in the nascent and hence the prices are highly volatile.
However, CoinDash did manage to raise $6.4 million from its “early contributors and whitelist participants” before things went south. The coin sale was scheduled to last 28 days or until it reached a $12 million limit.
CoinDash has pledged to investigate the hack, “This was a damaging event to both our contributors and our company but it is surely not the end of our project,” the company said in a statement. The stolen Ethers are still unmoved at USD value of over $10 million (43,488 Ethers).
This is one of those cases that shows that cryptocurrencies are, at the end of the day, still technologically driven, and, hence, vulnerable to bugs. Also, it learns that such bugs do not necessarily impact the price of crypto.