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Bitcoin tanks 20% in the last 24 hours to decrease by $37,000, hitting the lowest level

Bitcoin tanks 20% in the last 24 hours to decrease by $37,000

May 20, 2021: -Bitcoin decreased $37,000 for the first time in over three months on Wednesday, continuing a significant sell-off that started a week ago.

The digital currency was less than 20% in the previous day, according to Coinbase. The cryptocurrency hit an intraday low of around $36,189. It was a low level since February. Bitcoin is down over 30% in the previous week, according to Coinbase.

That means bitcoin has now erased all its gains following Tesla’s announcement that it will buy cryptocurrency of $1.5 billion worth. It’s also down nearly 44% since hitting a record high of $64,829 in mid-April.

Negative news in the last week has dampened sentiment for bitcoin.

On May 12, Tesla CEO Elon Musk said that the electric carmaker had suspended vehicle purchases through bitcoin, citing environmental concerns over the computational “mining” process. This is where high-powered computers are used to solve complex mathematical puzzles to enable transactions using bitcoin.

Musk’s comments caused over $300 billion to be wiped off the entire cryptocurrency market that day.

The announcement to suspend bitcoin payments came just three months after Tesla revealed that it bought $1.5 billion worth of bitcoin and would start accepting bitcoin in exchange for its products.

Early this week, the Tesla CEO suggested the company may have sold its bitcoin holdings but later clarified that it has “not sold any Bitcoin.”

Then on Tuesday, three Chinese banking and payment industry bodies issued a statement warning financial institutions not to conduct virtual currency-related business, including trading or exchanging fiat currency for cryptocurrency.

China’s hard-line on digital currencies is not new. In 2017, authorities closed the local cryptocurrency exchanges and banned the initial coin offerings, a way for companies in the space to raise money through issuing new digital tokens.

Traders in China once accounted for a considerable share of the bitcoin market, but their influence was reduced significantly after the crackdown. Chinese cryptocurrency operations have moved abroad.

“The crypto markets are currently processing a cascade of news that fuel the bear case for price development,” said Ulrik Lykke, executive director at crypto hedge fund ARK36.

More than $250 billion evaporated from the bitcoin market alone last week, Lykke said. Though that number seems “astronomical,” such moves aren’t uncommon in the volatile crypto market, he added.

Bitcoin is still up over 30% year-to-date and around 300% in the last 12 months.

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