Monero Price Surges 100% After $330.7M Bitcoin Hack

On-chain researcher ZachXBT has identified a potential cause for the significant surge in the price of privacy coin Monero (XMR) early Monday. According to ZachXBT, the price spike could be attributed to a large hack where 3,520 bitcoin (BTC) worth approximately $330.7 million was drained from an address and subsequently swapped for XMR.

The suspicious transfer was made nine hours prior to the price surge. The stolen funds were then laundered through multiple instant exchanges, which led to a sudden increase in the demand for XMR. This influx of buy orders caused a spike in the XMR-BTC order book, resulting in a significant price increase for Monero.

Market observers initially struggled to pinpoint the cause of the price surge, as metrics such as active wallets and network activity did not show corresponding increases. The limited liquidity for XMR in recent months, due to major exchanges delisting the privacy token to combat dark net markets, exacerbated the situation. The reduced liquidity meant that any substantial buy order could drive up the price disproportionately.

According to CoinGecko data, the order depth for XMR is considerably smaller compared to tokens with similar market capitalization. This lack of liquidity, combined with the sudden influx of funds, created an environment where the price of XMR could surge rapidly. As a result, XMR was trading at over $300, reflecting the impact of the large hack and the subsequent market dynamics.