Monero Price Surge Likely Attributable to Large Hack: ZachXBT

Last Monday, the price of Monero (XMR), a privacy-focused cryptocurrency, surged by nearly 40% in a matter of hours. On-chain researcher ZachXBT pointed to a suspicious transfer as the likely cause behind this sudden spike. According to ZachXBT, someone probably got hacked.

Nine hours ago, a suspicious transfer was made from a potential victim for 3,520 Bitcoin (BTC), valued at approximately $330.7 million. The theft address was bc1qcrypchnrdx87jnal5e5m849fw460t4gk7vz55g.

Following the funds, which were initially laundered via 6+ instant exchanges, were swapped for XMR. This transaction caused the XMR price to spike, leading to a significant increase in market volatility.

ZachXBT reported that the large transfer was likely an attempt by a hacker to capitalize on the limited liquidity of XMR. Market data shows a spike in buy orders for the XMR-BTC order book, which further supports this theory.

Market observers initially struggled to determine the cause of the major price surge, as metrics such as active wallets and network activity hadn't risen accordingly. However, ZachXBT's analysis suggests that the lack of liquidity on XMR was a key factor in the sudden increase in price.

Liquidity for XMR has been limited during the past few months due to the delisting of the token by major exchanges as part of their efforts to combat dark net markets. This reduced availability would have made any sizeable buy a catalyst for outsized pricing gains.

According to CoinGecko data, the order depth for XMR is significantly smaller than for tokens of similar market capitalization. As a result, even a small increase in demand can lead to large price movements.

As of writing, XMR is trading at over $300 according to CoinDesk markets data. The recent surge in price highlights the importance of liquidity and the potential risks associated with limited availability of certain cryptocurrencies.

About the Author

Sam Reynolds is a senior reporter based in Asia and has been part of the CoinDesk team that won the 2023 Gerald Loeb award in the breaking news category for coverage of FTX's collapse. Prior to CoinDesk, he was a reporter with Blockworks and a semiconductor analyst with IDC.