Bitcoin dropped over 30% to about $32,000 on Wednesday, although other cryptocurrencies, such as Ethereum and Dogecoin, fell much further. After the crypto market’s height, more than $500 billion in worth has been vaporized as a result of the latest carnage.
The price of digital currencies dropped to $30,001.51 yesterday until further declines were contained. The market hasn’t seen certain kinds of trading volumes since January.
A Large Market Wipeout
As the day progressed, it lost 12% of its value to a total value of $38,205.49 after 3:00pm. But, on an intraday basis, a week’s worth of losses was over 40 percent.
Cryptocurrency exchange Coinbase saw some downtime on Monday as a result of the price drop as well.
Numerous negative reports in the media have diminished the market value of bitcoin.
Investors are still searching for solutions, which is understandable considering that cryptocurrency buyers already lost more than a third of their value in a single day. Although it’s tempting to blame the meltdown on a single reason, the truth is that large-scale collisions are rarely caused by a single incident, but often by a combination of causes.
Reasons for the Bloodbath
On May 12, Elon Musk announced that the company had halted electric vehicle (EV) sales for Bitcoin until the issues about Bitcoin’s carbon footprint are addressed.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
With Musk’s criticisms of cryptocurrencies, $300 billion in the entire market capitalization was erased that day.
Although on Wednesday, Musk joked that the automaker was holding onto the bitcoin with “diamond hands” emojis on Twitter. The tweet came as Bitcoin hit its low.
Tesla has 💎 🙌
— Elon Musk (@elonmusk) May 19, 2021
Tesla announced the suspension of bitcoin purchases only three months after announcing that it had purchased $1.5 billion in bitcoin and will begin receiving bitcoin in return for its items.
Tesla’s CEO indicated earlier this week that the firm might have sold its bitcoin shares, but later reiterated that the company “has not sold any Bitcoin.”
Then, on Tuesday, three Chinese banking and payment industry bodies released a statement cautioning financial institutions from engaging in virtual currency-related activities such as selling or swapping fiat currency for cryptocurrencies.
China’s anti-digital currency stance is not recent. Authorities shut down local cryptocurrency exchanges and outlawed so-called initial coin offerings (ICOs), which enable businesses to collect funds by selling new digital tokens.
Traders in China used to control a large portion of the bitcoin economy, but their power has dwindled after the crackdown. Chinese cryptocurrency activities have relocated to the United States.