Bitcoin crashes
Bitcoin crashes

The price of Bitcoin is off around 39 percent from its peak in mid-April when it was $64,895.

On Wednesday (May 19) around 11.30 AM, Bitcoin was at $38,570.90 according to latest data on Coinbase. This is its lowest level since February 2021. Yet, it is still up over 40 percent year-to-date and 320 percent in the last 12 months.

One of the reasons for the tumble is Tesla chief Elon Musk's tweets. He tweeted on May 13 that Tesla had suspended vehicle purchases using Bitcoin. That tweet sent the cryptocurrency careening and wiping of off $300 billion off the market. The other reason being regulatory hurdles.

On Tuesday, three Chinese banking and payment industry bodies--National Internet Finance Association of China, China Banking Association and the Payment and Clearing Association of China-- issued a statement warning financial institutions not to conduct virtual currency related business, CNBC reported. Under the ban, such institutions must not offer clients any service involving cryptocurrency, such as registration, trading, clearing and settlement, three industry bodies said in a joint statement on Tuesday.

Musk cites climate concerns

On May 13, Musk had tweeted that Tesla had stopped accepting Bitcoin to purchase its vehicles due to climate concerns. He had said Tesla will not be using any Bitcoin and we intend to use it for transaction as soon as mining transitions to more sustainable energy.

Musk said Tesla was looking at other cryptocurrencies that use 1 percent of Bicoin's energy/transition. This was contradictory to what Tesla said a few months ago. In February, Tesla had revealed it had bought Bitcoin worth $1.5 billion. It had said it 'would soon' accept it as a form of payment for cars. That statement had sent Bitcoin shooting higher, sparking heavy trading in cryptocurrencies and caused exchanges like Coinbase, Gemini, Binance to experience technical issues.

On May 16, it appeared from his tweets that Musk favoured Dogecoin over other cryptocurrencies. He tweeted: “Ideally, Doge speeds up block time 10X, increases block size 10X & drops fee 100X. Then it wins hands down,” he said on Twitter.

On May 11, Musk put out a question to his followers asking them if they wanted Tesla to use Doge to buy Tesla.

The price of Dogecoin jumped after Musk's tweet. According to Coindesk, the price currently stands at $0.723573, witnessing a 25.77 percent jump in 24 hours after Musk tweeted about it.

Referring to the origins of Dogecoin which was invented as a joke, Musk said:. “Dogecoin was created to make fun of cryptocurrency. Fate loves ironies. The currency that was invented as a joke becomes the real currency,” Musk said.

(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Free Press Journal