Bitcoin, Ethereum nosedive after China crackdown; crypto cap sheds nearly $1 trillion

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Bitcoin, Ethereum nosedive after China crackdown; crypto cap sheds nearly $1 trillion

On Wednesday, Bitcoin, the original cryptocurrency, alongside Ethereum had been hit with hefty whiplashes, as the world’s most popular crypto asset clocked its largest intra-day decline since March 2020 with crypto market cap shrugging off nearly $1 trillion.

In point of fact, in the day’s sharp downward spiral in Bitcoin’s valuation came forth as the bakers of a blistering Bitcoin rally that sent the digital asset to an all-time high of roughly $65,000 last month, appeared to be widening their gaps with the crypto asset, while in the latest flashpoint of a mass-scale blow to digital assets, Tesla Inc Chief Elon Musk was quoted saying later last week that the crypto asset would no longer be allowed to purchase Tesla vehicles given the scale of electricity crypto miners usually consume.

Fanning up the flames further, the steep decline in Bitcoin’s valuation, which tumbled as much as 22 per cent earlier in the day, came forth as Beijing had officially banned financial and payment processing institutes to offer crypto asset associated services.

Apart from that, investors holding bitcoin as a hedge against a rapid uptick in inflation indicators, left their ‘buying’ positions after April FOMC minutes had shown that the Fed policymakers were edging towards tapering off fiscal support for a ballooning US economy, which in effect had led to a restoration of American currency’s safe-haven bid alongside US Treasury bond notes.

Bitcoin falls to lowest since March 2020

Citing statistics, in the day’s cryptocurrency market, Bitcoin was tottered more than 25 per cent to $30,066 earlier in the session, however, had pared some of its losses on late-afternoon US trading hours and wrapped up the day 8.02 per cent lower.

The digital asset was last trading close to $40,000. Nonetheless, Ethereum tumbled more than a third of its market valuation to $1,850 earlier in the session, the weakest level since late-January, however, had rounded off the day 28 per cent down to $2,439, remarking the steepest intra-day plunge since March 2020.