CryptoWatch: Exchange hack halts bitcoin push toward $7,000

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Security issues continue to dog the cryptocurrency industry after yet another hack of a prominent South Korean exchange.

Bithumb, the sixth largest cryptocurrency in the world according to data from CoinMarketCap, said Wednesday that “some cryptocurrencies worth about 35 billion won [$31 million USD] were seized between late yesterday and early morning today.”

The hack marks the second of its kind inside two weeks after Coinrail said it had $40 million worth of altcoins stolen on June 11 and underlines concerns outsiders have with the digital currency market.

The news weighed on crypto prices with all major coins trading in the red Wednesday. Bitcoin BTCUSD, -1.11% the world’s biggest digital currency, last traded at $6,621.08, down 1.1% Since Tuesday 5 p.m. Eastern Time on the Kraken crypto exchange.

Read: Here’s why bitcoin is falling—and it isn’t just the Coinrail exchange hack

Why are exchanges prone to hacks?

While lack of adequate security might play a role in the ongoing exchange hacks, the transactional process makes bitcoin and other cryptocurrencies a prime target for hackers.

“One disadvantage to bitcoin is its immutability. Once a transaction happens, it can never be undone, which is one of the reasons cryptocurrencies can be a target for hackers,” said Mati Greenspan senior market analyst at etoro.

“However, immutability is also one of bitcoin’s most attractive qualities. The fact that it operates transparently and independently is a clear advantage for many.”

Read: BIS warns that wide bitcoin adoption could break the internet

Altcoins follow bitcoin lower

Coins alternative to bitcoin, altcoins, have followed bitcoin lower. Ether ETHUSD, -1.68% has lost 1.7% to $521.80, Bitcoin Cash BCHUSD, -2.24% is off 2% at $871.80, Litecoin LTCUSD, -1.98% is down 2.2% to $95.98 and XRP XRPUSD, -1.94% the coin that runs on the Ripple protocol, is trading at 53 cents, down 2.2%.

Futures are tracking spot lower in early trading. The Cboe July bitcoin futures contract XBTN8, -1.89%  is down 1.7% at $6,630, while the CME June contract BTCM8, -1.86% is off 1.7% higher at $6,620.

Read: Opinion: This is all it would take for bitcoin to become a worthless cryptocurrency