Bitcoin (BTC-USD) is experiencing a massive sell-off, shedding almost 15% in the last 24 hours — the biggest intraday drop since February.
The drop appears to coincide with reports that the US Treasury is planning to tackle financial institutions for money laundering carried out through digital assets.
Data website CoinMarketCap cited a blackout in China’s Xinjiang region for the fall, which allegedly powers much of Bitcoin mining — the process by which new bitcoins are entered into circulation.
On Sunday, the flagship crypto shed nearly $8,000 and was trading 12% lower at $54,900 around 12 PM in London, down from a day high of $61,293.
It hit a day-low of $53,302 in the early hours of Sunday. Currently, it has regained some lost ground, down 9% to $55,409 around 6 PM.
Bitcoin's flash crash saw a new record in liquidations, resulting in more than one million positions being wiped off the books. This meant that $10bn in positions were liquidated, according to Bybt.
Other cryptocurrencies have also plummeted.
Ethereum (ETH-USD) the second biggest cryptocurrency in circulation, fell 17% before paring losses. It is currently down 13% to $2,132. Litecoin (LTC-USD) also declined, down 24% to $252.
It comes days after bitcoin approached $65,000 ahead of the debut listing of cryptocurrency trading platform Coinbase on Wednesday. Coinbase is the first crypto firm to list on the Nasdaq (^IXIC).
In late February, bitcoin saw a retreat to as low as $43,000 amid uncertainty in the traditional markets over stimulus expectations and their positive effects on US bond yields.
Bitcoin prices have been up and down over the last few months as governments and regulators hone in on the sector amid rising demand.
On Friday, bitcoin plunged 4% after the Central Bank of Turkey banned the use of cryptocurrencies and other digital assets for payments.
Turkey's central bank said the ban was motivated by a lack of "central authority regulation" and "supervision mechanisms" for cryptocurrencies and other similar digital assets.
It added that, among other risks, cryptocurrencies "may cause non-recoverable losses for the parties to the transactions" due to the lack of regulation. The ban will come into force from 30 April this year.
Last year, a number of financial institutions and well-known investors threw their weight behind cryptocurrencies and blockchain technologies which sent its price skyrocketing.
This helped cryptocurrencies gain more popularity in recent months, especially bitcoin, which has more than doubled in value in the last six months.
Earlier in 2021, the market value of all bitcoin in circulation hit $1trn for the first time, after a more than 800% surge. In December, it soared past Visa (V) to make it the world’s largest financial service.
In October last year, Bitcoin got a big boost in sentiment after California-based payments platform, PayPal (PYPL) allowed its customers to hold the cryptocurrency in their digital wallets.
Meanwhile, US investment bank JPMorgan (JPM) also started banking Coinbase and Gemini platforms and Visa and Mastercard provided services to crypto companies.
Acceptance from mainstream investors and firms, including Tesla (TSLA) and Mastercard (MA) have also fuelled bitcoin.
But it is not the only cryptocurrency doing well. Ethereum the second-largest cryptocurrency in the world by market cap is also picking up pace, climbing to $2,488 for the first time in its history last week.
Most recently, dogecoin (DOGE-USD) stole the spotlight from bitcoin and ethereum this week after it surged more than 200% in 24 hours, giving it a market cap of $52bn.