Why is crypto crashing? Update on Bitcoin, the Coinbase fight
It looks like a dark day for cryptocurrency investors as tokens lose value left and right.
The market has been in shock since last Wednesday when crypto trend maker Elon Musk tweeted that his electric car maker Tesla was “concerned about the increasing use of fossil fuels for Bitcoin mining and trading. , especially coal, ”and would stop accepting bitcoin as payment for its vehicles. While Bitcoin’s gargantuan carbon footprint has long been a major concern among those who are pessimistic about its future, Musk’s comments threw the reality of its impact into sharp relief – at least for buyers and consumers alike. crypto sellers.
But the market absorbed another punch on Tuesday, as investors backed down on news that China was preparing to regulate the burgeoning industry. According to a joint statement released by three of the country’s industry bodies, virtual currency, including bitcoin and ether, “is not real currency” and “should not and cannot be used as currency on the market ‘, and banks and payment companies actually prohibited trading in such assets. Notably, the government-controlled People’s Bank of China is currently developing its own electronic money, the digital yuan, which would be fully supervised by the central bank.
The news has raised concerns that other foreign governments may tighten restrictions around what has so far been a loosely regulated company. Another dark sign for the industry, Inner Mongolia, one of China’s five autonomous regions, today launched a dedicated phone line, email and courier service to report illegal crypto mining operations. change. Under pressure from Beijing to meet its ambitious green energy goals, the region has cracked down in recent months on its vast network of crypto-miners, which accounted for 7.71% of the global bitcoin network hash rate of September 2019. until March 2020.
All this caused a frantic liquidation. The biggest losers are bitcoin, which has fallen 13% in the past 24 hours at noon on Wednesday, falling below $ 40,000 from a high of $ 63,000 in April. Ether fell 19% and dogecoin fell 18%. But it’s not just the brand names – tokens are red everywhere:
Nice cold day in the crypto markets pic.twitter.com/WvvKqldHen
– Drew Harwell (@drewharwell) May 19, 2021
Crypto wallet today. ????. We will pump again after the sale is over. pic.twitter.com/uGloPBwfne
– Mike Novogratz (@novogratz) May 19, 2021
In a show reminiscent of this year’s Robinhood-GameStop fiasco, Binance and Coinbase, two of the world’s largest cryptocurrency trading platforms, both experienced technical glitches amid the frenzy. Binance temporarily disabled ether withdrawals due to “network congestion” and Coinbase suffered a multi-hour outage (it has since fixed the issue).
Coinbase, which made its historic public debut earlier this year, saw its stock drop 25% last week, hitting an all-time high earlier today.
The sale wiped a staggering $ 200 billion from the cryptocurrency market in the past day.
But he still has at least billionaire status, ironically, in Musk. Despite the cryptocurrency’s free fall kicking off last week, he tweeted this morning that Tesla has diamond hands, borrowing a phrase from Reddit to imply he would not sell his stake of 1, $ 5 billion in Bitcoin:
Tesla has ???? ????
– Elon Musk (@elonmusk) May 19, 2021