Business World

Cryptocurrency market takes deep plunge, nearly $1 trillion wiped off

The crypto markets took a deep dive on Wednesday that at one point it nearly wiped off $1 trillion market capitalization.

Bitcoin and ether tumbled to a low of 3.5 months. They are on track to post their largest one-day loss since March last year.

Bitcoin, the biggest and best-known cryptocurrency, had already been under pressure from a series of tweets from Tesla boss Elon Musk, but  China’s move a day ago to ban financial and payment institutions from providing cryptocurrency services sent Bitcoin to a low of $30,066.

The cryptocurrency has dropped 54% from a record high of $64,895 hit on April 14. It is also heading for its first monthly decline since November 2018.

“Bitcoin’s sharp price drop should come as no shock to the market,” said Gavin Smith, chief executive officer of crypto consortium Panxora.

“Any asset which has risen as much as bitcoin over the past year can be expected to have pullbacks as some investors withdraw profits, like we’re currently seeing. While often a brilliant investment opportunity, traders must remember that Bitcoin is still an emerging asset class and will continue to experience large price swings,” he added.

Bitcoin’s decline whacked other crypto assets, with Ether , the coin linked to the ethereum blockchain network, dropping to $1,850, its weakest level since late Janury. It was last down 26% at $2,497. Since hitting a record high on May 12, ether has plummeted 57%.

Meme-based dogecoin also tumbled 26% to $0.35.

Shares in the crypto exchange Coinbase dropped 7.4% on Wednesday. Coinbase’s share price has nearly halved from the peak hit on the day of its direct listing in April.