Ransomware Could Be Driving up the Price of Bitcoin
Complex interplays are pushing up the price of cryptocurrencies — including the potential for criminals to profit
Flagstaff, Arizona. Wakulla County, Florida. Virginia, New York, Louisiana, and Oklahoma. All have been hit by crippling ransomware attacks recently — and U.S. senators last month called on the Department of Homeland Security to step in to help state and local governments survive the aftermath.
Ransomware attacks may represent a problem beyond shutting down local and state services, though. Cybersecurity company Emisoft believes that the value of bitcoin — which was used in 98% of all ransomware payments in the first three months of 2019 — is being bolstered by such attacks.
Victims choosing to pay up when they’re attacked are pushing up demand for bitcoin, which nudges up the price as a result, encouraging speculators into the market, according to Emisoft’s analysis. The firm points to examples like the 2017 WannaCry attack, which infected more than 300,000 computers worldwide, asking them to pay a ransom into a specific bitcoin wallet, as case studies of how specific incidents have increased the value of bitcoin.
Just before the attack raced around the world, bitcoin was trading at around $1,845. Two weeks later, having made headlines, it was at $2,446. In May 2019, just before a spate of attacks struck U.S. cities, bitcoin was trading at around $5,350. Today, the value has doubled.
“There appears to be a correlation between high-profile ransomware incidents and bitcoin prices rising,” says Brett Callow, an Emisoft spokesman.
But correlation does not always mean causation, warn cryptocurrency experts. “Every trade affects the price of bitcoin in small or large ways. Maybe not individually but definitely in aggregate,” says Marie Vasek, a lecturer in information security at University College London. And while the preponderance of ransomware attacks may have had an impact on the price of bitcoin, Vasek doubts it’s the only reason. “Because it’s traded so many places it’s hard to disentangle what’s moving the market,” she says.