The price of Bitcoin, the world's largest and most famous cryptocurrency, fell to its lowest level in three weeks over the weekend. Known for its extreme volatility, Bitcoin fell 13% from a high of around €64,800 per unit to a low of €52,000. Since then, the digital currency has recovered slightly and is worth around €56,400 at the time of writing. The sudden drop in value stems from a surge that propelled the cryptocurrency to a new all-time high last week, following Coinbase's all-time float. The drop also affected all kinds of altcoins, such as Ether and Dogecoin, which recently broke previous price records. While the cause is not entirely clear, some have speculated that an alleged crackdown on cryptocurrency laundering among major US financial institutions could have sent crypto into a spiral.
Bitcoin selling spree
The fall in the price of Bitcoin has caused a sell-off, as some investors look to limit their losses in the belief that prices could fall further. This, in turn, caused significant network congestion, driving up transaction costs. According to Johoe-Hoenicke data, more than 160.000 Bitcoin transactions are currently pending resolution, which would be unprecedented. With such intense competition on the network, the average fee per transaction skyrocketed to €52. It was only during the last period of crypto mania, at the end of 2017, that transactions on the Bitcoin network became more expensive. The network congestion problem is believed to have been exacerbated by power outages in China, which is home to many large Bitcoin mining operations. Over the weekend, the collective computing power of miners on the Bitcoin network dropped nearly 30%, to 105 exahash.