The Decline of Bitcoin – Why is Bitcoin dropping today?
THE DECLINE OF BITCOIN. The value of the world’s most expensive cryptocurrency, Bitcoin, fell to less than $34,000 on Wednesday after China banned cryptocurrencies. This is the first time in the last three months that the price of Bitcoin has fallen so low. However, the price of Bitcoin improved slightly to $42,000 on Thursday.
China has recently banned banks and payment companies from trading in cryptocurrencies. Last Tuesday, China warned investors not to trade in cryptocurrencies.
Earlier, the electric car maker Tesla had also announced that it would not use Bitcoin for trading in the company. With the announcement of Tesla, the price of Bitcoin fell by about 40 percent last week.
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Along with Bitcoin, the prices of cryptocurrencies including Ether and Dogecoin have also fallen sharply.
The decline has not only affected cryptocurrencies such as Bitcoin. Tesla’s share price has fallen nearly 3 percent since Elon Musk announced he would not trade on Bitcoin. Remember that Elon Musk has about one and a half billion dollars worth of bitcoin.
How much Bitcoin does Elon Musk have?
In a tweet earlier this week, defending Musk’s investments in bitcoin amid recent concerns related to bitcoin mining’s impact on the environment, Scaramucci said Elon Musk owns over $5 billion in bitcoin via Tesla, SpaceX, and personally.
Musk had earlier this week clarified that Tesla had not sold any of its Bitcoins after the company last week said it will no longer accept Bitcoin as payment for its products due to concerns related to the environmental damage caused by cryptocurrency mining.
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First the announcement, then the U-turn
Last March, Tesla announced that it could buy Tesla cars by paying with Bitcoin. Tesla’s move was opposed by environmentalists and investors. Elon Musk recently reversed the company’s decision. Taking the umbrella from the previous decision, Musk canceled plans to buy a car using cryptocurrency, citing concerns about climate change. Bitcoin mining consumes a lot of energy and uses many high-powered computers, and the main source of such energy is coal, Musk said.
However, the bitcoins purchased by Tesla so far will not be sold and alternative and sustainable energy will be used for mining, Tesla said, adding that they will use those cryptocurrencies.
What did China say?
In 2019, China banned cryptocurrency transactions to control money laundering. But even then, people were trading online using cryptocurrencies such as Bitcoin, which was a headache for the Chinese government.
On Tuesday, Chinese government agencies, including the National Internet Finance Association and the Payments and Clearing Association, issued warnings on social media. He warned that if a customer loses due to investing in cryptocurrency or trading in cryptocurrency, any compensation and protection can be provided.
The recent fluctuations in the value of cryptocurrencies have threatened the security of individual assets and affected normal financial transactions, the organizations said.
Neil Wilson, who works at markets.co, says: China’s central bank has decided to introduce its own digital currency by banning cryptocurrencies. Other countries are also likely to be affected by China’s decision and move forward on China’s path. This could weaken the future of cryptocurrency. “
Western regulators are still unsure about Bitcoin. But that is likely to change soon.
With the decision of China, no transaction can be done in China through Bitcoin. But another reality is that more than 75 percent of the world’s bitcoin is mined in China.
Here are some references to the relationship between The Decline of Bitcoin and Elon Musk:
- In early 2021, Tesla CEO Elon Musk showed interest in Bitcoin and Tesla bought 1.5 billion bitcoins.
- Bitcoin, which was $34,000 in February, reached $64,000 at the end of April.
- In March, Musk announced that it could buy Tesla cars by paying with Bitcoin.
- With the announcement, the price of Bitcoin had risen.
- In the second week of May, Musk took the uterus. His new announcement was that Bitcoin would not be accepted for payments at Tesla.
- People’s Bank of China also announced to stop using digital tokens for payment.
- With these events, the price of Bitcoin has started collapsing. According to experts, the price of Bitcoin could fall further.
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