It only takes a few minutes for Bitcoin to lose $200 and that’s exactly was happened today.
Not only has Bitcoin crashed earlier today but it took the whole market down with it including Ethereum, XRP, Monero, Stellar and so on.
After weeks of motionless prices, Bitcoin started a downward drop and sank below the $6,300 mark despite all the signs pointing to the opposite thing and that the bulls were getting ready to go head first to the market.
Nevertheless, here are a few reasons why we think Bitcoin crashed earlier today.
The Bitcoin mining economy is in a little bit of a crisis. During the first half of this year, competition and farm building spiked. This means it could be possible for miners to attempt selling Bitcoin to recoup costs. Over the past week, the peak hashing power has coincided with falling rewards for current miners.
Philip Nunn said on Twitter:
“As of June 2018, over 80% of #Bitcoin mining is performed by six mining pools and five of those six pools are managed by individuals or organizations located in China.So this is really worrying. And $BTC maximalists must look at this as a huge threat. China controlling BTC”
The relationship between Tether and Bitfinex has come out with some interesting developments over the past few days. After showing signs of trouble, Noble Bank halted their services for Bitfinex and Tether. This led to a loss of trust in the exchange and a stablecoin leading to funding withdrawals. The past month saw half of the Bitcoin deposited in the Bitfinex cold wallet flowing out and an additional 100 million USDT leaving circulation.
The stock market crash
In the beginning, Bitcoin was initially seen as a hedge against the risk of the stock market since its price movements seemed to almost ‘defy gravity’. But with the slide of the Dow Jones Index by a thousand points, within days saw rekindled fears for the traditional world of finances.
Mainstream markets are still lacking exuberance and a need for investments, so the leading cryptocurrency may have to, once again, wait for an inflow of institutional money.