Bitcoin, the world’s biggest cryptocurrency, fell as much as 14% to $51,541 on Sunday, wiping out most of last week’s gains.
It last traded at $53,991, down 10%, a whopping $12,000 below Wednesday’s record high, while smaller rival Ether, the cryptocurrency linked to Ethereum’s blockchain network, fell 10% to $2,101.
The blackout in China’s Xinjiang region, which is said to have a lot of bitcoin mining, is said to be responsible for the sell-off, with some blockchain analysts pointing to a sharp drop in the “hash rate” as a result of the outage.
Hash rate refers to the volatility index, which measures the processing capacity of the entire Bitcoin network, and also determines the performance that miners need to develop new Bitcoins.
Despite the sudden downward trend, Bitcoin is still up 89% in 2021, as it has gained more acceptance as an investment and means of payment, along with the rush of retail banking into stocks, exchange-traded funds, and other risky assets.
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