Bitcoin dropped to a two-week low on Tuesday falling as much as 9.9% to $31,036. Even though the reason for the slump is unclear, the major selloff might have been triggered by concerns over the cryptocurrency’s security after U.S. officials managed to recover about 85 percent of the Bitcoin ransom paid to Colonial Pipeline cyberhackers.
The incident could signal that Bitcoin is not above government control. At the same time, it goes against the fundamental concept of the digital asset’s decentralized nature. Charles Retting the head of the U.S. Internal Revenue Service said on Tuesday that Congress needs to provide authority to the tax agency to collect information on cryptocurrency transfers surpassing $10,000.
Mike McGlone from Bloomberg commenting on Tuesday’s decline said: “[It is] linked to fears of the Feds seizing people’s Bitcoins”. He further stated that “we’ve been in a down-phase for a month now and this is part of it. It’s a continuation of the latest downtrend and this is the latest spark.”
The Justice Department released a seizure warrant on Monday regarding the retrieval of the ransom. A recently formed task force in Washington was able to trace the Bitcoin by finding the digital addresses the hackers used to transfer the funds and managing to access the password for one of their bitcoin wallets.
Bitcoin in 2021
In April 2021, digital assets were on the rise, with Bitcoin topping $60,000 and having reached its all-time high to date. However, the recent dive in crypto prices has hurt investors’ confidence. Bitcoin is currently almost 50% down from its highest point ever recorded.
The recent tumble in cryptocurrencies comes after China’s crackdown on crypto mining and trading enforced with an escalating campaign against digital coins. Elon Musk’s recent tweets also contributed to stirring up the markets. A breaking-up meme, a broken heart emoji, with #Bitcoin and an additional “I miss you” meme from the Tesla CEO seem to have sent the price of Bitcoin falling.
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