On Wednesday, Bitcoin prices went under $37000, a first in more than 3 months. This is a continuation of a large sell-off that had started in the last week.
The Latest Bitcoin Fall Comes From Chinese Banks
Data from Coin Metrics reported that the digital cryptocurrency lost 20% and hit $36,061 as the day’s lowest at approximately 7.30 A.M. E.T. This is the lowest it has been since 3rd February. This also means that bitcoin has presently lost all the profits after Tesla had stated that it would buy a huge amount of the coin, worth $1.5B. Bitcoin sentiments have been dampened over the previous week due to a series of negative news.
On 12th May, Elon Musk, the CEO of Tesla, announced that the company is no longer accepting bitcoin for vehicle purchases. The billionaire cited concerns about the damage to the environment due to the “mining” process involving computers. Highly powerful computers solve complex puzzles of mathematics to allow transactions that use bitcoin. These comments from Musk led to more than $300B worth of the cryptocurrency being removed from the market on the day.
After that, on Tuesday, 3 payment and banking industry bodies from China warned financial institutions about conducting any business related to virtual currency. This included exchanging or trading fiat currency to get cryptocurrency.
This hard-line is not a first from China. In 2017, local exchanges of cryptocurrency were shut down by authorities. Initial offerings of coins were also banned, which was how related companies raised money by issuing new tokens.
Chinese traders once made up a large share of the market for bitcoin. However, following the crackdown, the Chinese influence has seen a significant reduction. The operations primarily moved abroad.
BTC prices have still gained about 300% over the past year, even with the recent fall.
