Key takeaways
- The crypto market crash led to $1.7 billion in liquidations of leveraged positions within 24 hours.
- Despite concerns about quantum computing’s impact on crypto security, current threats remain minimal.
A sharp correction in the crypto market sparked $1.7 billion in liquidations in 24 hours, with Bitcoin falling from over $100,000 to $94,100 and Ethereum falling 8% below $3,800, according to data from Coinglass.
The market-wide sell-off saw $168 million in short liquidations and $1.5 billion in long positions liquidated, as the total crypto market capitalization fell 7.5%.
Bitcoin has partially recovered from its recent decline, now trading at $97,800, but is still 2% lower in the last 24 hours. However, the rest of the crypto market is still under pressure. Most altcoins have plummeted by at least 10% within a day.
Of the top 10 crypto assets by market capitalization, Ripple (XRP), Dogecoin (DOGE) and Cardano (ADA) led the losses. XRP decreased by 11%, DOGE by 10% and ADA by 13%.
While no single event has been definitively identified as the cause of Monday’s pullback, crypto traders speculate that a combination of factors, including Google’s release of the quantum computing chip ‘Willow’ and recent Bitcoin transfers from Bhutan, may have played a role.
Bhutan moves 406 BTC to QCP Capital
A wallet controlled by the Royal Government of Bhutan transferred 406 Bitcoin to QCP Capital, a Singapore-based digital asset trading firm, earlier today, data from Arkham Intelligence program.
The transfer was split into several smaller transactions. Following these, Bhutan made another Bitcoin transfer worth $19 million to an unidentified address starting with “bc1qwug2.” These funds were then moved to a Binance hot wallet.
The reason behind the government’s wallet operations is uncertain. Last month, Bhutan reportedly sold 367 Bitcoin for around $33.5 million via Binance. Bitcoin’s price dropped below $90,000 after the move.
Despite the recent sale, Bhutan remains one of the top five government holders of Bitcoin worldwide, with a current reserve of 11,688 Bitcoin, valued at nearly $1.1 billion. Unlike most countries that acquire Bitcoin via asset seizures, Bhutan mines its Bitcoin using hydropower resources.
Google’s quantum breakthrough
On Monday, Google rolled out one new quantum chip called “Willow.” Hartmut Neven, founder and head of Google Quantum AI, said the chip can perform tasks in under five minutes that would take the fastest supercomputers about 10 septillion years.
Developed by Google Quantum AI and showing amazing error correction capabilities with increased qubits, this breakthrough points to scalable quantum computing.
A number of members of the crypto community expressed concern about the chip’s potential threat to Bitcoin’s security as soon as it was revealed. There is concern that hackers could break the encryption that protects crypto wallets and exchanges as computing power increases.
“$3.6 trillion of cryptocurrency assets are, or soon will be, vulnerable to quantum computer hacking,” wrote a community member.
“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 did in 5 minutes what supercomputers today would take 10^25 years to accomplish. What does that kind of computing power do with cryptography? It’s killing it.”
But many point out that while quantum computing is advancing rapidly, it is not yet at a stage where it poses a serious threat to Bitcoin’s security.
“Estimates suggest that a compromise of Bitcoin’s encryption would require a quantum computer with about 13 million qubits to achieve decryption within a 24-hour period. In contrast, Google’s Willow chip, while a significant advance, comprises 105 qubits. We have a way to go” explained Kevin Rose, Partner at True Ventures.
Ben Sigman, a Bitcoin entrepreneur and advocate, 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 tougher – requires a different approach (Grover’s algorithm) and millions of physical qubits to pose a real threat,” he added. “Bitcoin’s cryptography remains SAFU … for now.”
