Experts say the reason for the sudden drop in the price of Bitcoin is still unclear. However, they may be related to concerns about the security of cryptocurrencies.
Bitcoin price suddenly dropped on June 8 (Vietnam time). According to Coin Desk data, the world’s largest cryptocurrency touched $31,200 per coin, down 13% from a day earlier. Thus, the price has fallen close to the low in May.
The sharp drop caused Bitcoin’s market capitalization to lose the $600 billion mark, falling to $585.73 billion. Since the beginning of 2021, the Bitcoin price has increased by just over 9%.
Other cryptocurrencies also dropped in value. Ether – the world’s second largest cryptocurrency – fell more than 15% to $2,356 per coin. XRP and Cardano prices also saw 14.61% and 16.21% declines from a day earlier, respectively. Dogecoin – the coin that was born as a joke, has increased in price 6,400% since the beginning of the year – also lost 15.29%.
According to CoinMarketCap, the total market capitalization of cryptocurrencies is down nearly 15% from a day earlier to $1.4 trillion. Experts believe that the reason behind the latest drop in cryptocurrency may be related to the security of this currency.
US recovers 2.3 million USD in Bitcoin ransom
According to CNBC, the cause behind Bitcoin’s volatility is currently unclear. However, they may be related to concerns about the security of cryptocurrencies, after US officials recovered $2.3 million in Bitcoin – more than half of the ransom paid by Colonial Pipeline to the group. Hackers attacked America’s largest fuel pipeline network with ransomware last month.
According to Reuters, the US Federal Bureau of Investigation (FBI) has owned the key to a Bitcoin wallet that received most of the Colonial Pipeline’s ransom. It is not clear how the FBI obtained this key.
Bitcoin is the currency often chosen by hackers to demand ransom payments to unlock data locked by ransomware.
Cryptocurrency information platform Decrypt says there have been unfounded rumors that “the attackers’ Bitcoin wallets have been hacked”.
Meanwhile, John Hultquist, vice president of Mandiant Threat Intelligence, described the move as a “welcome development”.
“Clearly we have to use some tools to stop this wave of serious problems. Even law enforcement agencies need to broaden their approach to combating criminals who may be operating outside the law,” he stressed.
Experts say that regulatory risks from the Chinese government also weigh on the price of Bitcoin. Weibo – China’s most popular social network – has blocked a number of accounts with crypto influence for violating unspecified laws and community rules on its platform.
Bitcoin storm weakens
Last month, Chinese authorities called for a crackdown on cryptocurrency mining and trading. Once a major market for cryptocurrencies, the country of billions has moved to prevent speculation in the sector, banning ICOs – a popular form of fundraising among cryptocurrency projects – and closing local exchanges.
Bitcoin and other cryptocurrencies began to decline after Tesla CEO Elon Musk announced the electric car company would stop accepting Bitcoin payments due to environmental issues. The May bottom of Bitcoin price is more than 31,000 USD/dong, set on May 23.
Recently, billionaire Musk continued to shake the cryptocurrency market after tweeting with the hashtag #Bitcoin and a broken heart emoji. Along with that is an image referring to the lyrics of the song In the End by the rock band Linkin Park.
“Cryptocurrency investors have paid the price for the market crash,” Charles Hayter, CEO of crypto data firm CryptoCompare, told CNBC.
“The retail investor’s crypto mania has waned. The reason is the strong actions of the management agencies. The data shows that institutional investors are still manipulating the market,” he added.
However, last week, thousands of Bitcoin investors came to Miami to attend what is billed as the biggest Bitcoin event in history.
The event featured several highlights, including that El Salvador (North American) President Nayib Bukele is planning to submit legislation that would make Bitcoin legal to trade in the country. If the law passes, El Salvador will be the first country in the world to legalize Bitcoin.
Square Inc. – American financial services company – said it would invest 5 million USD to build a solar-powered Bitcoin mining facility in the US, through a partnership with a blockchain technology provider.
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