For better (and more often) worse, the price of bitcoin was all but inseparable from one of its major exchanges in August.
Bitcoin prices fell close to 20% to start the month, a steep decline that coincided with the hack of Hong Kong-based bitcoin exchange Bitfinex, one of the most heavily traded on the network globally.
As it would come to light, the security breach resulted in the loss of roughly 120,000 BTC ($72m). The event would have a wide-ranging impact on the market, depressing bitcoin prices as Bitfinex shut down for more than a week and concerns were raised about basic practices used to secure the digital currency.
Prices were quick to rebound, however, on news of improvements at the exchange.
After reopening, Bitfinex was able to attract significant USD/BTC trading volume, capturing 20% of this market during the week activity resumed. While the exchange’s trading activity started out at a modest pace, reaching 31,000 and 33,000 BTC on 1st and 2nd August, this activity was far lower following the hack.
For the remainder of the month, daily volume failed to reach 10,000 BTC during all but one session. As a result, Bitfinex trading volume averaged only