Things will soon go back to normal. Even after going to lows of $688.43 in the last 24 hours, Chia Coin bounced back to an uptrend and was trading at $1,019.2 at the time of writing.
The price of the newly launched Chia coin (XCH) has been experiencing a bearish trend in the last couple of days, dipping to below $1000 in the last 24 hours. On May 17, 2021, the coin was trading at around $1300 but began a dip that saw it reach a low of $688.43 today, May 20, 2021. However, this is not because of the prevailing crypto market dip attributable to China’s crypto ban rumours.
Probable Reasons for the Chia Coin Price Dip
Token prices are subject to the forces of demand and supply. Bringing the Chia Coin into perspective, the decreased prices may be attributed to a number of factors.
Risks of Unofficial Mining Pools
On May 17, 2021, the Chia network founder, Bram Cohen, warned miners of the dangers they expose themselves to when using unofficial mining pools, the main danger being scamming. Cohen reiterated that the unofficial mining has seen some miners give out their private keys to their pools, a move that compromises the security of their wallets.
He suggested that the only way to correct such a mistake would be by setting up another wallet and transferring everything there. Additionally, Cohen noted that they’re planning to develop a pooling protocol, the Chia planning protocol. However, Chia won’t be developing a mining pool.
The Chia network typically uses high-capacity hard disc drives. According to Tomshardware, HDDs are to blame for the bearish trend. Tomshardware noted that the current huge demand for HDDs in the Chia network has resulted in a general shortage of the product in the market. As more Chia users required more hardware storage, the prices of the HDD market spiked sharply. In a case involving graphic cards a.k.a GPUs, used to mine Ethereum, a similar spike was observed. The report indicated that in some instances, retailers had totally run out of the HDDs resulting in price spikes. Also, the available models were found to be way expensive for a sustainable project. A classic example is the Seagate Barracuda Pro mode, where Amazon’s price hiked from $583 to $649 following the increased demand.
The Chia platform was founded with the aim of influencing the global financial landscape in a positive way. However, the current increased HDD demand that’s no match to the market supply may congest Chia’s system with loads of unprocessed data, and this may disrupt the payment system.
According to the CoinMarketCap price chart, it’s clear that things will soon go back to normal. Even after going to lows of $688.43 in the last 24 hours, the coin bounced back to an uptrend and was trading at $1,019.2 at the time of writing.