Hoax Over ‘Dead’ Ethereum Founder Spurs $4 Billion Wipe Out
The creator of the digital currency Ethereum, Vitalik Buterin, died in a car crash and insiders are selling like crazy—or so said the headline. It soon became clear the news, posted to notorious troll site 4Chan, was fake but it still gave the price of the currency quite a jolt.
As Quartz reports, the hoax coincided with the overall market value of Ethereum falling by around $4 billion after the news was posted on Sunday night. Here is a chart from Coindesk that shows what happened to the currency after that:
Buterin himself took steps to quell the false rumors on Sunday night, posting a tongue-in-cheek picture on Twitter. The picture refers to a new use case for blockchain (the technology that underlies Ethereum) and cites a new piece of data from Ethereum to show he is still alive—it’s like a geek’s version of holding up today’s newspaper.
Buterin’s posting appears to have helped quell the sell-off that followed the fake headline about his death. But the whole episode shows how digital currencies like Ethereum and Bitcoin, which are already volatile, can be subject to market manipulation. (It’s possible of course that someone posted the fake death headline as a mere prank—but the more likely explanation is the stunt was intended to move the market).
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The death hoax came amid a rocky few days for Ethereum. Last week, a so-called “flash crash” saw the crypto-currency briefly plummet to ten cents on a major exchange, before bouncing back up to a price of over $300.
Ethereum, which has emerged this year as a serious rival to bitcoin, has been on a tear since early this year when it sold for only $10. (To get a better idea on what Ethereum is all about, check out my colleague Robert Hackett’s magazine profile of Buterin from last summer.)