At 8:30pm Pacific time on Saturday night, the entire cryptocurrency market crashed. Bitcoin (BTC) for example was trading around $61,000-$63,000 the past week, and it dropped by $10,000 per coin to a price of $51,300. This is the lowest price Bitcoin has been at since February. At the same time, Ethereum (ETH) was trading around $2,400-$2,500 this past week and it dropped down to $2,000 at the same time Bitcoin dipped.
Other cryptocurrencies like Cardano (ADA) and Litecoin (LTC) all experienced the same drop in their prices. This left everyone asking why? What caused the crypto market to crash? There are numerous rumors floating around the internet as to what triggered the price of the entire cryptocurrency market to plummet.
The leading answer to this crypto market dip is reports of the US Treasury cracking down on financial institutions for money laundering involving digital assets and cryptocurrencies. I have not seen any hard facts about this, such as which financial institutions were involved, but if the stories are true, that would be a huge step backwards in the movement trying to establish cryptos like Bitcoin as a legitimate form of currency. The drop in cryptocurrency prices has also been linked to a massive blackout in China’s Xinjiang region, which allegedly powers a lot of Bitcoin mining. Bitcoin mining is how the blockchain network operates and how new Bitcoins are entered into circulation. Another factor causing fears is India’s announcement that they were banning cryptocurrencies.
I personally find it suspicious that the cryptocurrency market simultaneously bottomed out at 8:30pm Saturday night. I personally think some financial institutions or big hedge funds were involved in the massive sell-off, driving the price down. This would make sense if they were under investigation and feared news of that would lower crypto prices. Realistically, it was probably a perfect storm and the combination of all of the above. And on top of that, Bitcoin and Ethereum are both coming off of record setting weeks where they hit their highest prices ever so it’s natural that they experience a dip back down.
That’s my thoughts on what caused the crypto crash. Leave me a comment with your thoughts. Don’t forget to follow my blog to stay up to date on the latest news in the investing world.