$300 Billion Worth Of Bitcoin Wiped Out After Overnight Crash
$300 billion worth of bitcoin has been wiped out following an overnight crash.
The cryptocurrency market was seen to have plummeted in the early hours of Sunday, April 18, after blackouts across China’s Xinjiang region, one of the most important regions for the cryptocurrency.
The blackout, caused by a coal mine explosion on April 10, reportedly resulted in significant declines in the mining rates — tanking prices of bitcoin, and sparking billions of dollars worth of liquidations.
According to crypto-data website CoinMarketCap, the overnight crash led to the total market capitalization of cryptocurrencies worldwide plummeting by an approximate $310 billion in less than 24 hours.
This caused the market to shrink from more than $2.2 trillion to less than $1.9 trillion by around 8.00am ET.
By 9.45am, the market had risen once again to around $1.95 trillion.
Analysts have attributed these losses to an almost 50% decline in bitcoin’s hash rate, as per Honest Columnist, a rate which measures the total processing power used to mine bitcoin as well as to process transactions.
According to Forbes, despite these difficulties, the price of bitcoin is still up by an extraordinary 750% this year, with experts no longer viewing bitcoin as being an unreliable store of wealth.
On Friday, April 16, Dallas Federal Reserve President Robert Kaplan said:
The challenge [with] bitcoin is how widely will it be adopted — right now, it’s clear it’s a store of value.
It obviously moves a lot in value, so that may keep it from spreading too far as a medium of exchange and wide adoption, but that can change and that will evolve.
Cryptocurrency researcher and former Forbes contributor Willy Woo tweeted, ‘Price and hash rate [have] always been correlated’, making reference to a similar sudden crash in November 2017, remarking that once the hash rate begins to normalize, bitcoin’s price will also start to recover.
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