The massive and abrupt plunge in oil took a toll on the cryptocurrency market, which lost over $26 billion.

The coronavirus set off a price war in oil as OPEC failed to reach consensus on a production cut. Saudi Arabia went ahead and slashed prices. At one stage WTIC crude oil futures were, therefore, down over 33% to a low of $27.34 today. In a continuing sell-off, S&P futures were down nearly 5% to 2817. The reverberations from oil’s ‘slash-and-burn’ and stock rout were felt in cryptocurrencies such as bitcoin too, which lost more than $26.43 billion in a seeming flash crash. (CNBC)

Bitcoin, the flagbearer for cryptocurrencies, is down 10.43% to $7,850 after touching a low of $7730. Other mainstream coins such as ethereum, XRP and bitcoin cash also notched up losses in double digits. Analysts dubbed the crash in bitcoin as a flash crash, but such volatility is not uncommon in the cryptocurrency market.

Bitcoin: The real culprit may be PlusToken pyramid scheme

However, some analysts attributed the fall to bitcoin sales pressed by perpetrators of the $2.9 billion PlusToken pyramid scheme.

According to Ergo, a Twitter handle that closely follows and analyzes PlusToken’s shenanigans, the scam actors unloaded about 13,000 bitcoin valued at $210 million. The coins were allegedly routed through coin mixer exchanges to convert the tainted bitcoin into other “clean” coins.

Twitter analyst Kevin Svenson had the same view and drew attention to a similar action by PlusToken when BTC crossed $10,000 last year.

Miner hoarding may also be the cause

A third analysis says bitcoin fell due to hoarding by miners. According to Charlie Morris, of ByteTree, miners may have stopped selling their coins in the market to “protect the market which is too soft to sell into.” Such a trend has historically coincided “with negative returns and reflects a weaker market bid.”

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