Bitcoin Plunges After $1.4B Bybit Hack, Inflation Fears

Bitcoin (BTC) prices plummeted on Wednesday following the revelation of a $1.4 billion hack at Bybit, a major cryptocurrency exchange. The news sent shockwaves through the market, with BTC briefly dipping below $95,000 before recovering to trade around $96,000. Renewed inflation concerns also weighed on investor sentiment, contributing to the sell-off.

Bybit confirmed the hack and assured customers that their funds were secure. The exchange stated that it was fully solvent and could cover all customer losses even if it was unsuccessful in retrieving the stolen funds. However, the hack cast a shadow over the market, leading to a significant decline in BTC prices.

Analysts are divided on whether a local bottom is forming in the BTC market. Ali Martinez, an analyst, pointed to a decline in sell-side pressure as a sign that a local bottom may be in the making. However, Rekt Capital highlighted the importance of a close above $97,000 to maintain the higher low as support.

Microsoft's recent breakthrough in quantum computing has reignited fears among some in the crypto community that quantum computers could break the encryption that underpins the industry. However, Pierre-Luc Dallaire Demers, a scientist-in-residence at the University of Calgary, believes that the fears are overblown and that the timelines for Bitcoin's vulnerability to quantum computers remain distant, around 2029-2031.

The crypto market cap is down over 2% and currently sits at $3.15 trillion. BTC is down over 2% and trading just above $96,000. Futures traders were also hit, with over 192,000 traders liquidated and $570 million in total positions closed in the past 24 hours.