In Depth

Bitcoin price: crypto market falls into ‘chaos’ as Facebook Libra delays loom

Market drops by 20% in a matter of hours as analysts blame ‘technical issues’

Bitcoin values are in a state of “chaos” after prices plummeted by almost £1,000 in the space of an hour. 

The virtual currency market experienced a “dramatic crash” on Tuesday afternoon, causing bitcoin prices to “plunge” in a matter of “minutes”, The Independent reports.

The cryptocurrency began trading at $9,790 (£7,950) mark on Tuesday morning, before slipping to $9,490 (£7,700) at about 7.30pm, according to ranking site CoinMarketCap

Prices then fell sharply to $8,420 (£6,830) an hour later, and values have continued to decline, the ranking site notes. As of 2.30pm UK time today, bitcoin was trading just above the $8,000 (£6,490) mark. 

As if often the case in the crypto world, bitcoin’s declines sent shockwaves through the rest of the market. The Independent says Tuesday’s crash resulted in 20% being “wiped off all of the biggest digital currencies”.

Is Libra coin to blame?

Facebook’s upcoming cryptocurrency, Libra coin, was widely regarded as being one of the key drivers of bitcoin’s resurgence after its grand unveiling in June. 

However, the digital coin has faced intense scrutiny from banks and regulators over competition and privacy concerns. It now appears that Facebook chief, Mark Zuckerberg, may not release the coin in 2020, as had been originally planned. 

Speaking to Japanese newspaper Nikkei Asian Review, Zuckerberg said: “Obviously we want to move forward at some point soon [and] not have this take many years to roll out.

“But right now I’m really focused on making sure that we do this well… A lot of people have had questions and concerns, and we’re committed to making sure that we work through all of those before moving forward.”

Zuckerberg’s comments came after Tuesday’s price crash, so it’s unlikely to be the driver behind the crash.

However, Forbes hints that Zuckerberg’s comments may have dampened the spirits of investors, resulting in bitcoin prices dropping by a further 5% since Tuesday.

So what caused the value slump?

Analysts are blaming a “a number of technical issues” for the crash, the Independent reports. This includes problems with Bakkt, a trading platform for institutional investors, which has seen “lower than expected” trading volumes since its launch on Monday. 

“Pessimism over the level of activity on Bakkt sparked this most recent sell-off,” Simon Peters, an analyst at online trading firm eToro, told the news site. 

However, he said the cryptocurrency’s “fundamentals such as hashrate”, the speed in which computers crunch the bitcoin code, are looking “strong” and “adoption of crypto is still moving forward at pace.

“With those conditions in mind, we could see the price rise back up to $10,000 within the space of the next month,” Peters concluded.

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