Bitcoin plunges 25%, wipes $500bn value
Bitcoin plunged almost 30% to $31,000, wiping
out more than $500 billion in value from the coin’s peak market value. It has erased all the gains it clocked up following Tesla’s February 8 announcement that it would use corporate cash to buy the asset and accept it as a form of payment for its vehicles. Ethereum, the second-biggest coin, sank more than 40%, while meme token Dogecoin lost 45%. Bitcoin is now down more than 50% from its record of almost $65,000 set in April. Fuelling the volatility is Tesla CEO Elon Musk, whose social-media utterances have whipsawed the crypto community. A statement from the People’s Bank of China on Tuesday reiterating that digital tokens can’t be used as a form of payment added to the selloff. The selloff dominated chatter on a day when equities also were tumbling and the Federal Reserve was set to release minutes from its latest meeting.
NEW YORK/LONDON: Bitcoin and ether tumbled on Wednesday to 3-1/2 month lows, on track to post their largest oneday loss since March last year, in the wake of China’s move a day ago to ban financial and payment institutions from providing cryptocurrency services.
At one point during the meltdown, nearly $1 trillion was wiped off the cryptocurrency’s market capitalisation. In late morning trading, the market cap was at $1.65 trillion, according to data tracker CoinGecko.com
Bitcoin, the biggest and bestknown cryptocurrency, had already been under pressure from a series of tweets from Tesla boss Elon Musk, but the news from China sent it further down, It hit a 3-1/2-month low of $30,066. It has dropped 54% from a record high of $64,895 hit on April 14. It is also heading for its first monthly decline since November 2018.
“Bitcoin’s sharp price drop should come as no shock to the market,” said Gavin Smith, chief executive officer of crypto consortium Panxora. “Any asset which has risen as much as bitcoin over the past year can be expected to have pullbacks as some investors withdraw profits, like we’re currently seeing. While often a brilliant investment opportunity, traders must remember that bitcoin is still an emerging asset class and will continue to experience large price swings,” he added.
Bitcoin’s decline whacked other crypto assets, with ether, the coin linked to the ethereum blockchain network, dropping to $1,850, its weakest level since late Janury. It was last down 26% at $2,497. Since hitting a record high on May 12, ether has plummeted 57%. Memebased dogecoin lost nearly 26% to $0.35, according to Coingecko. Shares in the crypto exchange Coinbase dropped 7.4% on Wednesday.