At one point on Wednesday, extending a week-long sell-off in cryptocurrency markets. As the selling accelerated on Wednesday, the digital currency fell as low as $30,001.51 before recovering some of its losses. Since late January, the cryptocurrency has not traded at such levels. On Wednesday, as the selling increased, the digital currency plunged as low as $30,001.51 before recouping some of its losses. The cryptocurrency has not traded at such levels since late January. Bitcoin recovered as the day progressed, falling 12 percent to around $38,205.49 long after 3 p.m. ET. The cryptocurrency has lost more than 40% of its value in the previous week at its intraday low.
The sudden decrease indicates that bitcoin has briefly reversed all of its gains following Tesla’s statement that it would buy $1.5 billion in cryptocurrency. It has also dropped by more than half since reaching a record high of $64,829 in mid-April. Other cryptocurrencies fell as well on Wednesday. According to Coin Metrics, Ether, the digital currency that drives the Ethereum network, was down more than 22% at $2,620.97. Dogecoin, a cryptocurrency that began as a joke and has been hyped by Tesla CEO Elon Musk, has dropped 25% to less than 36 cents. Both had suffered even greater losses early in the day. Additionally, the cryptocurrency exchange Coinbase was momentarily unavailable for some customers on Monday morning, as the value of the cryptocurrencies plummeted. Musk announced on May 12 that the electric manufacturer had paused bitcoin vehicle orders, citing environmental worries about the so-called computational “mining” process. High-powered computers are employed to answer complicated mathematical riddles, in order to facilitate transactions using bitcoin.
Musk’s statements prompted the cryptocurrency market to lose nearly $300 billion that day. Musk did imply on Twitter on Wednesday that Tesla was not selling its current bitcoin, adding with emojis that Tesla had “diamond hands.” That tweet was sent at the day’s lows for bitcoin. The decision to cease bitcoin payments occurred just three months after Tesla announced that it had purchased $1.5 billion in bitcoin and will begin taking bitcoin in return for its goods. Earlier this week, Tesla CEO Elon Musk implied that the business had sold its bitcoin holdings, but then clarified that it had “not sold any Bitcoin.” Then, on Tuesday, three Chinese banking and payment industry authorities released a joint statement urging financial institutions not to engage in virtual currency-related activities such as trading or exchanging fiat money for cryptocurrencies.
Traders in China used to control a sizable portion of the bitcoin market, but their clout has shrunk dramatically since the crackdown. Chinese cryptocurrency businesses have expanded overseas. “The crypto markets are now absorbing a flood of news that fuels the negative case for price development,” Ulrik Lykke, executive director of crypto hedge fund ARK36, said. According to Lykke, the bitcoin market alone lost more than $250 billion last week. Though that figure is “astronomical,” such swings aren’t unusual in the turbulent cryptocurrency industry, he adds. “In terms of Bitcoin’s prognosis, things may appear bleak right now, but historically, this is simply another barrier for Bitcoin to overcome, and a minor one in comparison to what it has endured in the past,” Lykke added. Bitcoin is still up more than 30% year to date and approximately 300% in the previous 12 months.
