Bitcoin fell to nearly $ 30,000 at one point on Wednesday morning, continuing a major sell-off in cryptocurrency markets that began a week ago.
The digital currency only hit $ 30,001.51 as sales spiked on Wednesday morning before some of those losses were reduced. The cryptocurrency has not traded below $ 30,000 since the end of January.
Bitcoin rebounded during the day, falling 8% to around $ 39,550 just after 2 p.m. ET. At the intraday low, the loss of cryptocurrency was more than 40% in the past week.
The sharp drop means that after Tesla announced it would buy $ 1.5 billion in cryptocurrency, Bitcoin temporarily wiped out all profits. It was also down more than 50% since hitting a record high of $ 64,829 in mid-April.
Other cryptocurrencies also fell on Wednesday. According to Coin Metrics, ether, the digital currency that powers the Ethereum blockchain, fell more than 18% to $ 2,745. Dogecoin, a cryptocurrency that started as a joke and was raised by Elon Musk, CEO of Tesla, fell 20% to less than 38 cents. Both suffered significantly greater losses at the beginning of the session.
Additionally, the Coinbase cryptocurrency exchange was temporarily unavailable for some users as the coins fell on Monday morning.
Bitcoin prices fell sharply amid the global sell-off of stocks.
Luke MacGregor | Bloomberg | Getty Images
The announcement that it would suspend Bitcoin payments came just three months after Tesla announced it had bought $ 1.5 billion in Bitcoin and would accept Bitcoin in exchange for its products.
Earlier this week, the Tesla CEO suggested that the company may have sold its Bitcoin holdings, but later clarified that it “did not sell Bitcoin”.
On Tuesday, three Chinese banking and payment companies issued a statement warning financial institutions not to engage in any virtual currency-related business, including trading or exchanging fiat currency for cryptocurrency.
China’s hard line on digital currencies isn’t new. In 2017, the authorities closed the local cryptocurrency exchanges and banned so-called ICOs (Initial Coin Offerings), a way for companies in this area to raise money by issuing new digital tokens.
Traders in China once had a large stake in the Bitcoin market, but after the crackdown, their influence was significantly reduced. Chinese cryptocurrency operations have been relocated abroad.
“The crypto markets are currently processing a cascade of messages fueling the bear for price developments,” said Ulrik Lykke, executive director of the crypto hedge fund ARK36.
In the Bitcoin market alone, more than $ 250 billion evaporated last week, Lykke said. While that number seems “astronomical,” such moves are not uncommon in the volatile crypto market, he added.
“In terms of Bitcoin’s outlook, things may look bleak right now, but historically this is just one more hurdle Bitcoin has to overcome and a small one compared to what it has done in the past,” said Lykke.
Bitcoin is still up over 30% since the start of the year and around 300% in the last 12 months.