Industry insiders are calling it “Bloody Sunday”. Over the weekend, the price of bitcoin lost 12% of its value, dropping from $61,300 to a low of just over $53,800 within 24 hours, and many are speculating about the causes behind such a selloff.
Among the theories was a rumor that spread on Twitter that the United States Treasury was planning to charge several financial institutions for money laundering using digital assets. It cannot be determined whether this news of April 18 had a significant impact on price, and executive director of the Blockchain Association Kristin Smith dismissed the fears during an interview with CNBC published earlier today.
Another hypothesis concerning bitcoin’s price decline was the blackout in China’s Xinjiang region, where a significant portion of the network’s hash rate is located. According to an April 18 Benzinga report, this resulted in a decrease in the mining hashrate from 157 exahashes per second to 105 exahashes per second. CEO of the digital asset treasury specialist Ledgermatic Luke Sully said that people “may have sold on the news of the power outage in China and not the impact it actually had on the network.” Edan Yago, co-founder of Bitcoin-based decentralized finance project Sovryn, also commented:
A hash rate reduction slows transactions, which ironically makes it harder to move coins to exchanges for sale. The recent price drop is well within the bounds of typical volatility. It is noise, not signal.