Bitcoin falls below $40,000 for first time since February as crypto market tanks

by Editorial Team

(Washington Insider Magazine) – Bitcoin plummeted over 15 percent Wednesday, sending the price of the biggest cryptocurrency below the $40,000 mark per coin for the first time in over three months.

Bitcoin’s plunge Wednesday morning came amid a broader sell-off of cryptocurrencies that saw the overall market lose about 20 percent of its value, or over $330 billion, in 24 hours, according to data from coinmarketcap.com.

As of noon, bitcoin was trading at about $37,300 per coin, according to coinmarketcap.com.

That means the digital coin has lost all of its gains since early February, around the time that Tesla announced it had bought $1.5 billion worth of bitcoin, which helped spark a run-up in price that saw bitcoin peak at over $60,000 per coin in April.

Bitcoin is still up over 300 percent compared with a year ago.

Other major cryptos posted staggering losses Wednesday morning, too.

Ether, the digital coin native to the Ethereum blockchain, fell about 20 percent and binance coin fell almost 27 percent, according to coinmarketcap.com. Dogecoin was down about 20 percent.

A variety of bad news over the past week could have sparked the sell-off.

“This week cryptos really seem to be in the firing line, they’ve been hit by tax returns, Elon Musk, who’s hugely influential in the crypto space, major platform outages, and now, a move in the asset class today that feels like capitulation,” Anthony Denier, CEO of trading platform Webull, said. “All of these things combined are likely to have rattled investors causing them to sell.”

Last week, Tesla CEO Elon Musk said the electric carmaker would no longer accept bitcoin as payment for its cars, citing environmental concerns associated with the “mining” of bitcoins. Musk’s comments wiped about $300 billion off the cryptocurrency market that day.

And earlier this week, Musk appeared to imply in a tweet that Tesla either had sold all of its bitcoin holdings or planned to. Hours later, he clarified that Tesla has not sold any bitcoin.

Finally, on Tuesday, three Chinese banking and payment industry bodies issued a statement warning financial institutions not to offer clients any service involving cryptocurrency, including registration, trading, clearing and settlement.

“Recently, crypto currency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” they said in the statement.

China has already banned crypto exchanges and initial coin offerings but has not barred individuals from holding cryptocurrencies.

Pete Cheyne, Founder of Bottlepay, a bitcoin-based global payments app, said he’s undeterred by the recent crash.

“Those of us in the space are battle hardened to these kind of events, we will continue forward building value into these burgeoning protocols,” he told the Post. “When zooming out on the charts, these intra-day re-pricing events are hardly recognizable. It’s best to look at the markets with a long-term lens.”

Julius de Kempenaer, senior technical analyst at Stockcharts.com, added that a rapid recovery is possible, but the overall upside potential is limited and the downside risk is huge.

“The saying never catch a falling knife seems very appropriate as it is raining knives in the crypto space at the moment,” he said.

SOURCE

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