Bitcoin prices fell to as low as $52,148.98 Sunday morning, even as they reached $64,800 last Wednesday. Currently, the currency is trading at $57,068.80 as of this writing. However, authorities remain at a loss at why bitcoin prices fell.
Cryptocurrencies Tumble Over The Weekend
Meanwhile, other cryptocurrencies also dropped in value over the weekend. This includes ether, the second most popular crypto in the market, which lost up to 18% in value and fell below $2,000. Ether recently recorded its highest price at $2,500 last Thursday and is currently trading at $2,264.89.
The weekend drop also included dogecoin, the cryptocurrency that started as a satirical comment on cryptocurrency. After hitting a 400% gain last week and ending at a record 45 cents, dogecoin went back to 24 over the weekend. Its price is currently at 33 cents.
Theories on Why Bitcoin Prices Fell
Unverified reports posted on Twitter claimed that the US Treasury Department will implement a crackdown. The agency is looking to swooping in on financial firms for possible money laundering activities that use cryptocurrency. A Twitter account by the name of @Fxhedgers posted a crackdown warning based on unnamed sources. The tweet went viral Saturday evening. The US Treasury Department has yet to comment on the rumors.
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Meanwhile, investor Peter Schiff, who is a fierce critic of crypto, tweeted the correlation of Coinbase’s listing in the stock market to the crypto selloff.
“Rather than being a watershed moment in the life of Bitcoin, the CoinbaseIPO may have marked the beginning of its death,” he tweeted over the weekend.
Floods in China May Have Caused Bitcoin Fall
Another theory that circulated over the weekend attributed the drop to blackouts in China. Specifically, the crypto trading site CoinMarketCap reported that a blackout in China’s Xinjiang region caused the selloffs.
Xinjiang is reportedly home to a large bitcoin mining industry. The site reported that the Xinjiang blackout caused almost half of the Bitcoin network to go offline in 48 hours.
As to why the blackouts occurred in the first place, CoinMarketCap reported that massive flooding caused power issues in China over the weekend Willy Woo, a popular crypto market analyst explained that Bitcoin hashrate correlates with its price. Following the Xinjiang blackout, the price drop followed the collapse in the bitcoin hashrate.
Crypto Recorded Record Highs Last Week
With the direct listing of crypto exchange Coinbase last week, many cryptocurrencies hit record highs last week. The excitement surrounding the public listing of a crypto trading platform added legitimacy to cryptocurrencies.
In fact, Coinbase’s market cap briefly reached $100 billion before closing at $62 billion at the end of last week.
However, many investors saw the spike in prices as a looming bubble. In particular, the spike of dogecoin, which is more of a joke currency, fueled concerns of a financial bubble about to pop.
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