What happened
Today's price action in the overall cryptocurrency market is generally bearish. Ethereum (ETH -0.93%) and Dogecoin (DOGE -2.58%) have dropped 2.1% and 3.2%, respectively, over the past 24 hours as of 11 a.m. ET. These moves appear to be driven by the high-profile hack of Ethereum sidechain Ronin, a significant development in both the size and scale of this heist. Dogecoin is doing what it does best, providing a high-volatility vehicle for investors to trade short-term market movements.
Convex Finance (CVX -2.77%) has seen a larger drop of 4.4% over the same time frame, driven by what appears to be profit taking, following a rather dramatic rise over the past couple weeks. Convex Finance has seen its CVX tokens approximately double since mid-March on bullish expectations around this network's ability to boost staking returns on Curve Finance pools, as well as new incentives for veCRV holders.
Image source: Getty Images.
So what
It's important to keep these recent 24-hour moves for these tokens in the context of some rather impressive upside moves over the past couple of weeks. Most investors would agree that some profit taking is healthy for these tokens to resume their long-term march higher. Accordingly, perhaps there's nothing to see here, at least for investors with a perspective that's longer than 24 hours.
That said, this significant hack of an Ethereum sidechain may cause investors some concern. Security issues remain a key talking point for crypto bears, who are likely emboldened by this news today.
Now what
It remains to be seen whether the crypto market will brush off this hack, as it has done with the previous $320 million hack of the Solana Wormhole bridge in February.
However, investors looking at the crypto sector as a safe place to park funds for the long term are being reminded today of some of the (potentially expensive) growing pains that can impact investor portfolios in the near term.
