Bitcoin Experiences Flash Crash After Fake Image Of Explosion Near Pentagon Goes Viral

Bitcoin, the world's largest cryptocurrency asset by market capitalization, has experienced a fleeting flash crash after an image showing a fake explosion near the Pentagon, which may have been created with artificial intelligence (AI), went viral online.

The alarming image, showing massive clouds of dark smoke near the iconic building that serves as the headquarters of the United States Department of Defense (DOD), was widely spread by multiple accounts on the micro-blogging site Twitter.

Among those that spread the image was the Twitter account of the Russian state-owned media outlet RT, which has more than 3 million followers. The image was also shared by a verified Twitter account called BloombergFeed.

RT already deleted its tweet featuring the said photo while Twitter suspended the BloombergFeed account.

The image seemingly reminded the public of the 9/11 attacks, which affected investors' confidence and caused immediate panic selling that led to a Dow Jones loss of over 7% and a 4.5% plummet in Morgan Stanley Capital International (MSCI) returns after the regular trade resumed six days later.

However, the viral image, which Arlington County Fire Department confirmed as fake a few minutes after it spread online, did not have a sweeping impact on the stock and cryptocurrency market.

"There is NO explosion or incident taking place at or near the Pentagon reservation, and there is no immediate danger or hazards to the public," the Arlington Fire and EMS official Twitter account clarified.

The photo started circulating on Twitter at around 10:06 a.m. ET on Monday and just four minutes later, at 10:10 a.m., the markets reacted and saw a downtrend.

The U.S. stock indexes suffered a minor hit but quickly recovered following confirmation from authorities that it was a hoax.

Bitcoin, the world's first-ever crypto asset also had a flash crash and slipped to $26,500 when the photo went viral. The maiden cryptocurrency, however, quickly surged and traded at $26,882 several minutes later.

While it has not been confirmed that the viral image was created using AI tools, it bears the hallmarks of AI-generated images.

As of 4:48 p.m. ET on Monday, Bitcoin had seen a 0.19% gain over the past 24 hours and was trading at $26,903.43 with a 24-hour volume of $11,448,483,310, based on the latest data from CoinMarketCap.