Bitcoin Plunges, Price Crash Blamed on Xinjiang Blackout
The Bitcoin price, on Apr 18, crashed, falling 23 percent to 53.3k. Accompanying this crash was aslumpin hash rate. Hash rate measures the network's computing power. Reports show that the drastic and unexpected fall in hash rate was because of power outages in Xinjiang, China. Following this, the Bitcoin hash rate fell 45 percent after reaching highs of 218 EH/s last week.
The Bitcoin network depends on individual miners who channel their hash through mining pools. Because of mining difficulty and other technicalities, the network is not powered entirely by mining pools, most of which are in China. On Apr 18, hash rate crash, leading pools—including Binance Pools, Antpool, Btc.com, and Poolin, cratered double digits losing on average 20 percent in hash power. While BTC prices could recover in weeks ahead, it could indicate the level of "centralization" in Bitcoin.
Impact on the BTC Price:
Bearish to neutral. In the immediate term, questions on the Bitcoin network's decentralization will begin floating. This could weigh downBTC/USD bulls, potentially pushing BTC/USD prices back to $50k. However, if this was an exchange glitch, BTC/USD could recover to last week’s averages.
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