Might be bizarre to most, but Chinese analyst Willy Woo believes a power outage in China is responsible for the massive crash in Bitcoin price. This power outage occurred in the Chinese mining region of Xianjing.
Woo made a theory that somehow, these power outage was responsible for the crash in Bitcoin price as reports about the outage were made public a few days ago. The power outage was to facilitate an inspection into the safety of a coal mine as there was a flooding accident that temporarily trapped over 20 miners.
Bitcoin price which was as high as $64,000 just under a week ago, has recorded a massive decrease as it went to as low as $51,000. That is steepest of falls in Bitcoin price since February of this year.
How Does Xianjing Rank in The Bitcoin Energy Consumption Index?
According to the Bitcoin energy Consumption Index, close to one-quarter of the Bitcoin global hash rate is represented by Xianjing. The BECI provides the estimated electricity consumption by Bitcoin globally.
Willy Woo noted that since August 2017, there has not been a drop as significant as the one recorded yesterday in the Bitcoin network hash rate. This drop saw a difference of over 18 million terahashes as it was down from 172 million to around 154 million terrahashes.
This drop in the electricity consumption of Bitcoin is the cause of the crash in Bitcoin price, as insinuated by Woo. And this drop was a result of the power outage in Xianjing.
Woo made speculations concerning the 9000 Bitcoins that was transferred to Binance on April 16th. He said these funds were probably sent by a whale who had an inside knowledge of what goes on in China.
It can be recalled that many have also attributed the fall in Bitcoin price, but these claims were refuted by Binance CEO Changpeng Zhao, who referred to the pandemic as not the root cause but the trigger for the fall in Bitcoin price.
Woo’s Claims Does Not Make Sense
As expected when it comes to theories concerning the reasons behind the fall in the price of any crypto, there are people who do not agree with some views. Adam Cochran, a partner with Cinneahaim Ventures disagrees. He does not see any sense in Woo’s claims. The idea that a power outage in China will affect the price of the most valuable cryptocurrency is “utter nonsense.’’
In his post on Twitter, he said he had seen people trying to establish a link between the power outage and the fall in Bitcoin price and people who are trying to do the calculations when they do not know maths.
Still on Woo’s theory, Woo also noted that large investors who seldom sell their Bitcoin have made a habit of buying a lot since the dip in Bitcoin price. He said this has not happened since BTC was under $10,000. He added that the market cap of Bitcoin alone has gone over $1 trillion.