Bitcoin, the most popular cryptocurrency has been on a roller coaster for months now with an upsurge in interest on the cryptocurrency by institutional investors sending the price to over 300% premium over the past year.
BlackRock, the $8.7 trillion asset manager and the world’s largest asset manager has enabled two of its mutual funds to invest in Bitcoin futures according to SEC filing on Wednesday.
However, on Thursday Bitcoin hit its lowest level in nearly 3 weeks as the most popular cryptocurrency was dealt a double blow.
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First, Biden’s Treasury Secretary nominee Janet Yellen during her confirmation hearing on Wednesday suggested that lawmakers “curtail” the use of cryptocurrencies like Bitcoin over concerns that they are “mainly” used for illegal activities.
In addition, there is an unconfirmed report from BitMEX research which suggested that a critical flaw called “double-spend” occurred in the bitcoin blockchain.
Bitcoin fell as much as 11% on Thursday as the double whammy knocked the faith of its users having fell 7.59% on Wednesday. The 24 hour trading range is $31,075.4 – $35,591.1 according to the Investing.com Index.
Bitcoin price at the time of this report is $32,013.4
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Ethereum the second largest cryptocurrency by market capitalization was down 9.74%, to $1,259.97 on Wednesday, after hitting an all-time high of more than $1,430 on Tuesday. Its 24 hour range is $1,165.95 – $1,387.39.
Ethereum is trading at $1,213.94 at the time of this report.
Double-Spend
Double-spend is when a bitcoin owner is able to spend the same bitcoin twice. It is a feared and dire scenario for the digital asset, and the blockchain was thought to have solved the issue when Satoshi Nakamoto published the Bitcoin Whitepaper in 2009 according to Business Insider.
The supposed double-spend initially was thought to be an RBF transaction. This is when an unconfirmed bitcoin transaction is replaced with a new transfer paying a higher fee.
However, ForkMonitor has said of the alleged double-spend transaction, “No (RBF) bumps have been detected.”
BitMEX in a tweet on Thursday wrote “as for yesterday’s *possible* Bitcoin double spend, which was resolved after one block, we have summarised the transactions in the below image, so that you can decide for yourselves what may have happened”
As for yesterday's *possible* Bitcoin double spend, which was resolved after one block, we have summarised the transactions in the below image, so that you can decide for yourselves what may have happened
Image modified from work by @0xB10C https://t.co/V56scTQw5Q pic.twitter.com/W2lPYGZxvb
— BitMEX Research (@BitMEXResearch) January 21, 2021
“If in fact the $21 double spend did occur, it could be a fatal blow to the popular cryptocurrency in that the flaw Nakamoto set out to solve in fact remains a vulnerability that could crush confidence in the asset,” Business Insider wrote.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.