It has been a utopia in the cryptocurrency industry for the past three weeks, with most coins seeing a new record price every other day. However, in the early morning hours today, a mysterious flash crash has seen most coins register at least 15% price drops. Bitcoin lost $8,400 in a few hours, with XRP, Bitcoin Cash (BCH), Bitcoin SV (BSV), Dash and Ethereum Classic (ETC) faring much worse.
Bitcoin bleeds, liquidates $10 billion
The top cryptocurrency dropped from roughly $60,000 to just over $52,000 in under half an hour, around 3:00 UTC today. It has since bounced back slightly and is trading at $57,600 at press time. This is still a 7% overnight drop.
The reason for the drop is not yet clear. However, some analysts attribute it to a rumor that the U.S Treasury is about to crack down on cryptocurrency money laundering. According to unnamed sources, the Treasury will charge several financial institutions in the U.S that have connections to the illegal practice. CNF hasn’t been able to find any tangible evidence to support the claim at the time of press.
Jake Chervinsky, a leading digital assets lawyer, has cast doubt about the validity of the rumor. He took to Twitter to point out that Treasury doesn’t carry out enforcement measures in the U.S – this is the Justice Department’s role. In addition, such actions are always confidential and are unlikely to be leaked beforehand.
The crash comes just a day after turkey banned Bitcoin payments, leading some analysts to draw connections between the two. However, on the day following the ban, Bitcoin barely showed signs of any loss in momentum.