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$ 300 billion worth of bitcoin was wiped out after an overnight crash.
The cryptocurrency market slumped in the early hours of April 18 after power outages in China’s Xinjiang region, one of the most important regions for cryptocurrency.
The blackout caused by an April 10 coal mine explosion reportedly led to a sharp drop in mining rates – bitcoin fuel prices and billions of dollars’ worth of liquidations.
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According to crypto data website CoinMarketCap, the overnight crash caused the market capitalization of cryptocurrencies worldwide to drop by approximately $ 310 billion in less than 24 hours.
This caused the market to shrink from more than $ 2.2 trillion to less than $ 1.9 trillion by more than 8:00 a.m. ET.
By 9.45 a.m., the market had risen again to around $ 1.95 trillion.
Analysts have attributed these losses to a nearly 50% drop in Bitcoin’s hash rate, according to the Honest Columnist. This rate measures all of the processing power used to mine bitcoin as well as process transactions.
According to Forbes, despite these difficulties, the price of Bitcoin has still risen an extraordinary 750% this year, and experts no longer view Bitcoin as an unreliable store of wealth.
On Friday, April 16, Robert Kaplan, President of the Dallas Federal Reserve said:
The challenge [with] Bitcoin is how widespread it will be – at the moment it is clear that it is a store of value.
It obviously has great added value so it may not spread too far as a medium of exchange and widespread acceptance, but that can change and that will continue to evolve.
Cryptocurrency researcher and former Forbes employee Willy Woo tweeted, “Price and hash rate [have] was always correlated, “referring to a similar sudden crash in November 2017, noting that once the hash rate begins to normalize, bitcoin price will also recover.
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