Bitcoin price drops thousands of dollars overnight – that could be the reason

Deepak Gupta
Deepak Gupta January 7, 2022
Updated 2022/01/07 at 2:23 AM

In the night from Wednesday to Thursday it is Bitcoin rate drastically decreased. From $ 45,894 at 7:30 p.m., the value of the cryptocurrency fell within two and a half hours to $ 42,985. That is a loss of over six percent. Bitcoin is thus moving further away from its all-time high reached in November 2021. It’s now a difference of nearly $ 25,000.

Bitcoin price drops drastically – why is it?

The strongest cryptocurrency on the market has been in a downward spiral for months. However, you don’t see a break-in like last night’s every day. In addition to Bitcoin (BTC), the value of Ethereum (ETH) also fell by around six percent in the two and a half hour period. Various other Alt-Coins also joined the kink in the Bitcoin price. Due to the general volatility of crypto currencies, as is so often the case, it is not possible to say with absolute certainty what the cause is.

However, some factors that could be responsible for the falling price can still be identified:

Kosovo bans crypto mining

Immense computing capacities are devoured for so-called mining of cryptocurrencies. As a result, the power consumption of crypto farms is extremely high. Bitcoin also plays a role, because it relies on a so-called proof of work. Put simply, this means that miners need a little more computing power for each transaction in order to keep the system running.

Accordingly, they always switch to those countries in which electricity costs are particularly low for their project. In the case of Kosovo, however, that is the end of it. With reference to the country’s scarce energy reserves, the government of Kosovo has banned the mining of cryptocurrencies. Due to high import prices and failures in coal-fired power plants, the south-eastern European country is currently in the worst energy crisis in a decade, according to Der Spiegel.

This is probably the strongest factor behind the slump in the Bitcoin price.

“Fuck you and fuck this” – Mozilla founder criticizes Bitcoin donation appeal

The harsh criticism from James Werner “Jamie” Zawinski, one of the founders of the Mozilla project, could also have left its mark on the Bitcoin course. The American programmer reprimanded Mozilla via Twitter for an appeal for crypto donations on December 31st.

“Hi, I’m sure the operator of this account has no idea who I am, but I founded @mozilla and I’m here to say, fuck you guys and fuck this. Everyone involved in the project should.” to be deeply ashamed of this decision to work with planet-burning scammers. “

Jamie Zawinski (via Twitter)

Whales in motion

We recently reported on possible slumps in the Bitcoin exchange rate caused by so-called whales. These are people or institutions that hold immense amounts of a certain cryptocurrency. If they sell, in some cases this can be seen directly on the market. Over the past hours and days, the Whale Alert platform reported (Twitter) various transactions of high sums:

  • 9,799 #ETH (33,725,289 USD) transferred from unknown wallet to #BigONE
  • 6,000 #ETH (20,643,142 USD) transferred from unknown wallet to #BigONE
  • 700 #BTC (29,896,048 USD) transferred from unknown wallet to CryptoCom
  • 799 #WBTC (33,957,187 USD) transferred from unknown wallet to #Huobi

Although there may be various reasons for the kink in the Bitcoin price and in the general crypto market, it seems that the development in Kosovo is playing the most important role at the moment.

Sources: Google Finance, Spiegel; Twitter / @ jwz; Twitter / @ whale_alert

Share this Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *