Bitcoin suffered a flash crash over the weekend — falling as low as $52,859.54 as a result.
The cryptocurrency’s price tanked by thousands of dollars in 15 minutes on Sunday morning… and seems to have been triggered by a series of unfortunate events.
An unverified report quickly spread like wildfire on Crypto Twitter that the U.S. Treasury was going to charge a number of financial institutions for money laundering using digital assets.
CNBC also shared a piece concerning India’s proposals to ban cryptocurrencies. There was just one problem here: The video was a month old.
To make matters worse, there was also a huge power outage in the Xinjiang region of China, which is home to a not insubstantial number of miners. This caused Bitcoin’s hash rate to tumble precipitously. As Ledgermatic’s Luke Sully told Reuters:
“The power outage does expose a fundamental weakness; that although the Bitcoin network is decentralized the mining of it is not.”
The impact of the outage also translated into a dramatic surge when it comes to transaction fees, which have hit an average of $50.21 at the time of writing. Levels this high haven’t been seen since December 2017.
As you might expect, Crypto Twitter was ablaze with tweets urging investors and traders to remain calm, with Bitcoin quickly bouncing back above the $55,000 mark. Many went to great lengths to point out that no asset constantly goes up in a straight line, and some pullbacks are to be expected along the way.
But inevitably, the panic did spread to other digital assets in the process. At one point, Ether looked like it was in real danger of losing $2,000 — mercifully, those concerns did seem short lived.
The bearish turn also dampened Dogecoin’s momentum to some extent. After reaching dizzying heights of $0.43 on Friday, DOGE slumped to $0.25 over the weekend.