- Over $1.7B worth of positions were liquidated in the crypto market, with Bitcoin falling to $94K and XRP, DOGE, and ADA losing significant value.
- Bhutan’s transfer of 406 BTC to QCP Capital and Binance raises questions, with the country still holding over $1B in Bitcoin.
- Google’s Willow quantum computing chip stirs concerns over Bitcoin’s encryption, though experts agree it’s not a threat at this time.
The cryptocurrency market has recently seen a large selloff, which led to more than $1.7 billion in liquidations. Bitcoin, which hit $100,000, fell to about $94,100, while Ethereum lost 8% and was trading below $3,800. As per Coinglass, the market capitalization of the cryptocurrencies in the market went down by 7.5%. Despite a slight rebound to approximately $97,660, the cryptocurrency is still 0.40% down in the last 24 hours. Other cryptocurrencies also felt the heat and many of them were down by over 10%.
Source: Coinglass
The most affected of the top cryptocurrencies are Ripple (XRP), Dogecoin (DOGE), and Cardano (ADA). XRP fell by 11%, DOGE dropped by 10%, and ADA was down 13%. Even though there seems to be a general sell off in the market, traders have not been able to agree on what led to the situation, though there could be several reasons that led to the situation.
Source: Coingecko
Bhutan’s Bitcoin Holdings and Market Impact
Such a factor is the recent Bitcoin transfer by the Royal Government of Bhutan. Data from Arkham Intelligence suggested that Bhutan sent 406 BTC to the QCP Capital and another $19 million worth of BTC to a wallet associated with Binance. Bhutan is one of the largest government owners of BTC withholding over 11600 BTC valued at nearly $1 billion.
Although Bhutan sold 367 BTC last month for $33.5 million, the Kingdom still has a large amount of BTC.. It is still unclear what these transfers were meant to achieve and it may have further helped put pressure on the market and lead to the selloff.
Source: Arkham Intelligence
Quantum Computing and Bitcoin
Other factor affecting the market is the release of Google’s quantum computing chip known as the ‘Willow’. This chip is capable of solving problems which would take about billions of years for ordinary supercomputers to solve.
With quantum computing developing at a fast pace people started to worry about the possibility of quantum computers breaking the encryption of BTC. However, current quantum computers are not a threat to BTC according to Kevin Rose. Google’s Willow chip has only 105 qubits in it, and specialists argue that to crack Bitcoin’s encryption, one would need around 13 million qubits.
Ben Sigman said that with quantum computing becoming a threat, SHA-256 is still safe in Bitcoin. Even though there may be future threats from quantum computing, Sigman thinks BTC is still safe for now.
Source: Ben Sigman
These among others have led to the current market volatility, including the large Bitcoin transactions from Bhutan and the quantum computing risk. Even with the high volatility, the analysts are still optimistic about the future of BTC, but everything is still a concern in the short term.
