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Bitcoin Crashes to Lowest Price in Nearly a Year

March 13, 2020 at 11:44 by Matt Jackson

The coronavirus has continued to wreak havoc on the cryptocurrency market, with Bitcoin prices sliding below $4,000 in early trading and the rest of the market seeing red. The world’s largest cryptocurrency has shaken off its safe-haven investment tag and even though the currency’s price has increased by 30% since its lowest point this morning, it is still trading more than 15% lower than at the same time yesterday. BTC has now lost $1,500 since the start of the year, roughly equivalent to 20% of its price.

According to coinmarketcap.com, total market capitalization fell to $125 billion this morning, compared to $220 billion just 24 hours earlier: a loss of more than 40%. Following a slight recovery, the figure now stands at $160 billion. The losses have been attributed to the continued spread of the coronavirus as well as a crash in the oil market, driven by the threat of an influx of cheap supply from Saudi Arabia and the failure of Saudi Arabia, Russia, and OPEC to come to a deal to curb oil supply in the near future. The US has also launched airstrikes in Iraq after the Shia militia killed one British army medic and two American servicemen during an attack on Wednesday this week.

Some analysts are pointing to a potential drop to sub $1,000 levels, which would mean a return to prices unseen since before the bull run of 2017, as uncertainty continues to devastate the fledgling market.

The cryptocurrency market is accustomed to extreme price volatility and is one of the reasons that it has become popular with some investors. It is not uncommon to see 25% gains in a single day, but this also means that the reverse is true. Cryptocurrencies like Bitcoin can lose 25% or more in a matter of hours, and the recent price decline will have served as a stark reminder for investors, especially those that are new to the cryptocurrency market.

Meanwhile, one of the world’s largest crypto exchanges, Coinbase, has announced the introduction of Bitcoin batching. This process means that transactions can be grouped together and sent in a single batch, rather than every individual transaction requiring its own block. Batching means that transfer fees are reduced and the time to process transactions is reduced. The company has come under criticism for taking so long to introduce a feature that was launched by competitors as far back as 2017.

Some have also criticized the move on security grounds, pointing to a post from Bitcoin contributor David A Harding, who said, in a blog post published in 2017, that batching transactions enabled other users of the exchange to identify addresses of other Bitcoin recipients.

Bitcoin’s next halving event will take place in May. During this event, the mining difficulty increases, which means that miners will receive lower fees for confirming transactions on the blockchain. Miners will be less inclined to confirm transactions because the costs will outstrip the rewards for all but those with the most efficient mining rigs. As the supply of new Bitcoin dwindles, prices are expected to increase, and this has proven the case in the days following the digital gold’s two previous halving events. It is also possible that as Bitcoin becomes more scarce, this will be the time when altcoins come to the fore. While the market is still in its infancy, a number of other blockchain and cryptocurrency platforms have emerged and could benefit from the halving event.

At 11:330 GMT, Bitcoin (BTC) prices are down 15.75% compared to the same time yesterday. The world’s largest cryptocurrency is trading at $5,451.81. Ethereum (ETH) has performed slightly better but has still shed 11.95% from its price and now costs $128.86. Ripple (XRP) is down 7.87%, making it one of the day’s best performers, and is now available for $0.153. Bitcoin Cash (BCH) is down 16.17% at $167.67. Litecoin (LTC) is down 7.38% over the past 24 hours, changing hands at $34.10 but it has broken above Bitcoin SV (BSV) in market capitalization. The Bitcoin fork dropped 21.37% and has been the worst-performing of the top 25 coins. It is now available for $112.73.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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