Today has been a somewhat rocky day for both cryptocurrency and equity investors. The overall cryptocurrency market has fallen by 0.7% over the last 24 hours, led by some alt coins like Solana, which saw a decrease of 7.3% during that same time frame.
Today’s big news that’s affecting Solana and a few of the other coins is the announced $320 million dollar hack of Wormhole. This hack is said to be the second-biggest cryptocurrency hack in crypto history, and the fact that the hack has had so much to do with the Solana network has some traders worried. Solana hit an intraday low of over 10% earlier in the morning after the news of the hack broke.
Wormhole is one of the biggest bridges between the Solana network and other blockchains such as ETH, Terra, Polygon, Binance Smart Chain and Avalanche. This bridge has reportedly had over $1 billion in total value locked, and it has also been locked down, its portal is unavailable for the time being as developers are scanning the extent of the damage that has been done. For now, Wormhole has stated that it seems only Wrapped Ether has been affected by this hack, with the other coins unaffected.
Wormhole has since requested the return of the coins in exchange for what they call a “bug bounty” of $10 million, but there is no indication the hackers have returned the stolen wETH to Wormhole.
This hack has highlighted one of the main risks inherent in the crypto space. Malicious actors such as hackers could attack networks, causing headaches for investors, particularly given the lack of legal recourse they have at their disposal to recover their money.
The fact that the hackers were cable of “exploiting the Solana VAA verification and mint coins,” according to Wormhole, this news clearly has Solana investors worried today. Given the most recent network disruptions that Solana has seen, this might simply be one too many headwinds to have to deal with right now.
Solana is a coin I’m still bullish on over the long term, because of a number of fundamental characteristics that make this network unique from others that are out there. However, these headlines are most certainly bearish for the coin over the short term.