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On May 10, Changpeng Zhao, CEO of Binance, said in an official statement that the stock market was planning to resume deposits and withdrawals early next week, and that the company is reopening the platform to the following a relatively large security breach.
For Binance, the piracy of 7,000 BTC is apparently no threat to its operations and the stock market is expected to recover the $ 49 million lost in less than two months, given its earnings in the first quarter of 2019.
At the reopening of Binance, some traders have suggested that this could fuel the recovery of alternative crypto assets, or altcoins, especially if the price in bitcoins begins to show short-term lateral movement.
Will Binance Resumption trigger a crypto rally?
Last month, the price of bitcoin rose 45% against the US dollar, registering a staggering 90% increase since the beginning of the year.
Historically, a large gathering of bitcoins has led other major assets and cryptographic tokens to regain momentum as interest in the asset class intensifies.
Crypto asset traders expect investors to reallocate part of the bitcoin capital to riskier options as confidence in market sustainability increases in the short to medium term.
Bitcoin broke the $ 7,000 mark | Source: CoinMarketCap
"Binance aims Tuesday to fully resume deposits and withdrawals. I suspect that altcoins will have a very green day, "said a trader.
According to Bitwise Asset Management's report published in March, Binance accounts for approximately 40% of all bitcoin business transactions.
5 / Only 10 exchanges have a daily volume of bitcoins exchanges greater than $ 1 million. @ binance, @bitfinex, @krakenfx, @ Bitstamp, @coinbase, @bitFlyerUSA, @Gemini, @itBit, @BittrexExchange, @Poloniex / @circlepay
You can see the daily volume of BTC exchanges on these exchanges at the following address: https://t.co/MQ4CD3K9hz. pic.twitter.com/yLFiL8kQNn
– Bitwise (@ BitwiseInvest) March 22, 2019
Therefore, it is not necessarily an exaggeration to think that the resumption of Binance's operations will have a major impact on the Altcoin market landscape, at least in the short term.
"The local summit for BTC and BTC Dominance seems to be at the rendezvous. We are looking at some crazy ALT pumps as money goes from Bitcoin to ETH and other encryption systems. [assets]. Can you imagine Monday when we will see Binance open to new bank transfers and media going crazy? »Another trader m said.
Important overhaul of security measures
In its latest update, the Binance and Zhao team said the exchange would reopen with many advanced security features added to prevent the occurrence of a similar security breach.
Zhao said:
Our team is progressing and working all weekend. Over the past few days, we have made extensive revisions of our system, with the addition of a large number of advanced security features and / or a complete redesign of the architecture .
We will share details of some of the changes later. Our goal is to fully resume deposits and withdrawals on Tuesday. The time will be communicated at a later stage, depending on the state of progress of the tests.
Although Binance's high profitability has allowed the company to easily cover the losses arising from hacking with business funds, Binance's proactive efforts to establish an insurance fund at the end of 2018 in the unlikely event of a breach of security have probably led investors to demonstrate more confidence in the ability of the exchange to recover from the hacking.
The security breach of Binance's hot wallet is likely to serve as a warning to all major exchanges: as the cryptography sector grows, hackers will attempt to use a wider range of tools and methods. sophisticated to steal funds,
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