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Crypto Market Drops in Correction

Crypto market fell by 8% in a steep correction.

Reports about a power outage in China, and rumors of a US Government crackdown on crypto money laundering, seemed like to be the cause of the crash.

Investors of the cryptocurrency are reeling from an overnight crash that has shrunk the crypto market by 7.92% and then knocked around $10,000 of Bitcoin’s price.

Crypto’s market cap is now at $2.08 trillion.

Early Sunday morning, Bitcoin fell to a low of $52,144, a quick drop from the high of $61,271 yesterday.

Bitcoin has taken the rest of the crypto market down with it. Ethereum sank by 11.45%, hitting a rock bottom of $1,978, its lowest since April 7. And then by Sunday afternoon, it rebounded to $2,174.

Altcoins are suffering much worse today. XRP is down by 20% to $1.29, while Bitcoin Cash fell 20% to $885.

What is the cause behind the crash?

Unconfirmed rumors on Twitter about impending charges from the US government over crypto money laundering seemed to be the main trigger.

Darius Sit, co-founder of Singaporean crypto trading firm QCP Capital, stated that he sees it as the cause.

An account cited the source as securities lawyers that are familiar with US Treasury Secretary Janet Yellen’s task force. However, no accounts provided further evidence.

The Treasury announced the sanctions against 16 groups and 16 individuals, some of them are linked to Russia, which it claims were using the cryptocurrencies to influence the 2020 US elections.

Meanwhile, Bitcoin’s hash rate abruptly sank by 30% early this week.

The founding partner of crypto V.C. firm Primitive Ventures, Dovey Van, attributes the plunge to a power outage in China’s Xinjiang province, the region that houses China’s biggest Bitcoin mining operations. The authorities cut the power after accidents in three coal mines in the province.

The crypto crash this weekend is a sobering reminder that markets rarely go up permanently.

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