Crypto Market Plummets 8% in Steep Correction

Cryptocurrency investors are reeling from an overnight crash that shrunk the crypto market by 7.92% and knocked $10,000 off Bitcoin’s price.

The market cap for crypto is now at $2.08 trillion,  according to price metrics site Nomics. 

In the early hours of Sunday morning, Bitcoin fell to a low of $52,144, a sharp drop from the high of $61,271 yesterday. 

Bitcoin took the rest of the crypto market down with it. Ethereum sank 11.45%, hitting a nadir of $1,978, its lowest price since April 7. By Sunday afternoon it had rebounded to $2,174.

Altcoins are suffering the worst today. XRP, which recently made impressive gains following a string of victories in court for Ripple, is down 20% to $1.29, while Bitcoin Cash link term_id="32043"[/link], which rallied 25% yesterday, fell 20% to $885. 

The crash also caused delays on crypto exchanges. From 5AM through 6:30 AM UTC, Binance reported issues with placing orders. Binance has since resolved the problems. 

What’s behind the crash?

Unconfirmed rumors on Twitter late Saturday night about impending charges from the U.S. government over crypto money laundering appear to have been the initial trigger.

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

One account cited the source as securities lawyers familiar with U.S. Treasury Secretary Janet Yellen’s task force. The accounts provided no further evidence.

Last week, the Treasury announced sanctions against 16 groups and 16 individuals, mostly linked to Russia, which it claims were using cryptocurrencies to influence the 2020 U.S. elections.

Separately, Bitcoin’s hash rate suddenly sank by 30% earlier this week.

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

This weekend crypto crash is a sobering reminder that markets rarely go up forever.