Key takeaways
- The crypto market crash resulted in $1.7 billion in leveraged position liquidations in 24 hours.
- Despite concerns about the impact of quantum computing on cryptographic security, current threats remain minimal.
Share this article
A sharp correction in the crypto market triggered $1.7 billion in liquidations over 24 hours, with Bitcoin falling from over $100,000 to $94,100 and Ethereum falling 8% below $3,800, according to Coinglass data.
The market-wide liquidation led to $168 million in short liquidations and $1.5 billion in long positions as the overall crypto market capitalization declined by 7.5%.
Bitcoin has partially recovered from its recent decline, now trading at $97,800, but remains down 2% over the past 24 hours. However, the rest of the crypto market is still under pressure. Most altcoins fell by at least 10% in one day.
Among the top 10 crypto assets by market capitalization, Ripple (XRP), Dogecoin (DOGE), and Cardano (ADA) bore the brunt of the losses. XRP fell 11%, DOGE 10%, and ADA 13%.
While no single event has been definitively identified as the cause of Monday’s pullback, crypto traders are speculating that a combination of factors, including Google’s release of the “Willow” quantum computing chip and recent transfers of Bitcoin from Bhutan, may have played a role.
Bhutan transfers 406 BTC to QCP Capital
A wallet controlled by the Royal Government of Bhutan transferred 406 Bitcoins to QCP Capital, a Singapore-based digital asset trading firm, earlier today, according to data from Arkham Intelligence.
The transfer was split into several smaller transactions. Following this, Bhutan made another Bitcoin transfer worth $19 million to an unidentified address starting with “bc1qwug2”. These funds were then transferred to a Binance hot wallet.
The reason behind the government’s portfolio activities is uncertain. Last month, Bhutan reportedly sold 367 Bitcoins for around $33.5 million through Binance. The price of Bitcoin fell below $90,000 following this decision.
Despite recent sales, Bhutan remains one of the top five government Bitcoin holders in the world, with a current stash of 11,688 Bitcoins, valued at nearly $1.1 billion. Unlike most countries that acquire Bitcoin through asset seizure, Bhutan mines its Bitcoin using hydropower resources.
Google’s quantum breakthrough
On Monday, Google rolled out a new quantum chip called “Willow.” Hartmut Neven, founder and head of Google Quantum AI, said the chip can accomplish tasks in less than five minutes that would take the fastest supercomputers about 10 seven billion years.
Developed by Google Quantum AI and demonstrated superb error correction capabilities with increased qubits, this advancement paves the way for scalable quantum computing.
A number of members of the crypto community expressed concerns about the chip’s potential threat to Bitcoin’s security upon its revelation. There are concerns that hackers could break the encryption protecting crypto wallets and exchanges as computing power increases.
“$3.6 trillion in cryptocurrency assets are, or soon will be, vulnerable to hacking by quantum computers,” one community member wrote.
“My fringe theory is that #Bitcoin will eventually be hacked, rendering it worthless,” said AJ Manaseer, manager of RE PE investment funds. “This new quantum chip achieved in 5 minutes what today’s supercomputers would take 10 to 25 years to accomplish. What effect does this type of computing power have on cryptography? It kills him.
However, many point out that although quantum computing is advancing rapidly, it is not yet at the stage where it poses a serious threat to the security of Bitcoin.
“Estimates indicate that compromising Bitcoin’s encryption would require a quantum computer with approximately 13 million qubits to complete decryption within 24 hours. In contrast, Google’s Willow chip, while a significant step forward, includes 105 qubits. We have a way to go,” said Kevin Rose, partner at True Ventures.
Bitcoin entrepreneur and advocate Ben Sigman said breaking ECDSA 256, a type of Bitcoin encryption, would require a quantum computer with millions of qubits, far exceeding Willow’s current capabilities.
“SHA-256: even more resilient: it requires a different approach (Grover’s algorithm) and millions of physical qubits to pose a real threat,” he added. “Bitcoin crypto remains SAFU…for now.”
Share this article
