Posted 5 months ago | by @devadmin
Why is the market crashing? It’s speculation but many are pointing to BitMEX’s Research’s investigation of a possible double spend transaction which turned out later to be false, as a catalyst for the crash.
Bitmex Research tweeted out that they had identified what they believed to be a double-spent Bitcoin transaction. On Jan. 20th, BitMEX’s ForkMonitor noted that “multiple blocks were produced at height 666833.” BitMEX Research tweeted.
For anyone interested, here are the details we have for the transactions in question.
Winning transaction (In block 666833):https://t.co/LCHaR2P2vF
— BitMEX Research (@BitMEXResearch) January 20, 2021
One hour later, BitMEX Research assessed the block noting it was what’s known as an replace-by-fee (RBF) transaction, which is where an unconfirmed transaction is replaced with a new transfer paying a higher fee in order to get ahead of the mining line. Essentially to get your transaction to go through quicker by raising the fee paid.
In order for a double spend to occur on Bitcoin, a malicious actor or actors would have to control 51% of the overall hash-rate of the Bitcoin blockchain, an unthinkable scenario.
However, the damage was already done and many crypto Twitter accounts like BSV’s Australian advocate Eli Afram sxpressed that BitMEX Research was sending “mixed messages” and further stated that the double-spent transaction should be cause for concern despite its small value of just around $20 or an estimated 0.00062063 BTC.
“So it appears an actual Double-Spend has occurred on BTC… Not an RBF (replace-by-fee), but an actual double spend. A mere 22USD… but – this could have been 22million.”
Bitcoin has fallen at least -8.4% in the last 24 hours to $31,706.41, below the key support level of $33K.
Although, BitMEX Research may have caused the latest market move, many analysts have been expecting a market pull back to at least $25K before continuing higher. Further, CoinTelegraph speculates that what crashed the market wasn’t BitMEX but institutional investors selling in droves on Coinbase Pro. CoinTelegraph points out that Bitcoin has fallen over 13% versus its highs from Tuesday, amid increased selling at Coinbase Pro.
Coinbase Premium Index has been a negative value since an hour ago. Coinbase whales might want $BTC to go lower for consolidation.
— Ki Young Ju 주기영 (@ki_young_ju) January 21, 2021
Despite that some might over hype this pull back as the end of bull run. Whether this market move was from BitMEX FUD, normal market movement or a combination of the two doesn’t matter for the broader picture. Bitcoin is down 22% since its new all-time high of $41,900 in December of last year, a range of a perfectly healthy needed correction.
What’s more is on-chain data from Glassnode indicates the number of HODLers is increasing as liquidity is running dry while big money is scooping up more Bitcoin than is being mined. In other words, don’t panic sell your Bitcoin, the institutions want it all for themselves!
Watch Bitboy Crypto explain in the live stream video below.
Bitcoin is currently trading at [FIAT: $31,976.17] DOWN -8.5% in the last 24 hours according to Coingecko at the time of this report.