According to Coindesk data, the largest cryptocurrency in the world, Bitcoin, declined as low as $30,202 per coin early Wednesday after starting the day about the $40,000 mark.
The cryptocurrency then rebounded slightly; however, it was still down over 10% at around $38,700 per coin around the time of the New York stock market close.
Other cryptocurrencies also witnessed falls. Ether, the second-largest cryptocurrency, traded below $2,000 per unit after trading above $3,000 on May 18. Ethereum is down roughly 22% at nearly $2,600 Wednesday afternoon. Meanwhile, the meme-based cryptocurrency dogecoin fell by more than 24% of its value. Additionally, Coinbase and Coindesk, crypto trading platforms, faced outages as a result of the selloff.
The billionaire Elon Musk announced this month that his company, Tesla, would stop accepting cryptos as payment because of environmental concerns. This news weighed on Bitcoin. Meanwhile, a new announcement from Chinese finance and banking watchdogs have shocked crypto markets even more.
On Tuesday, the agencies announced that financial institutions and payment firms should not participate in any transactions related to cryptocurrency and wouldn’t provide crypto-related services to their clients.
Elon Musk changed his mind on a plan to allow Tesla to start accepting bitcoin
Last week, Tesla CEO Elon Musk changed his mind on a plan to allow his firm to start accepting bitcoin as payment for its vehicles by suspending the program and citing sustainability concerns around bitcoin mining. The cryptocurrency then dropped 12%. It kept falling into the start of this week after Musk suggested that his company may have dumped its holdings of the digital currency. However, he later announced that it hadn’t.
Meanwhile, a meme-inspired currency, Dogecoin, tumbled earlier this month after Musk joked about it on Saturday Night Live. Remarkably, the billionaire is its biggest supporter.
However, the two cryptocurrencies are still higher than they were a year ago. Bitcoin is up over 30% in the year to date, while Ethereum gained 255% and Dogecoin boosted 7,500%.