Cryptocurrency market is down 7.13% in the last 24 hours (20 July).
After a year of gains and record highs, crypto currencies are enduring a turbulent time with unpredictable price changes.
Bitcoin and other leading crypto coins experienced a significant drop in share price after investors began dumping mining equipment as China announced fresh regulations.
Bitcoin (BTC) was down -5.18% at 10.40am on 20 July, followed by Ethereum (ETH) -7.17%, Tether (USDT) +0.49%, Binance Coin (BNB) -11.66%, Cardano (ADA) -10.77%, XRP (XRP) -8.18%, Dogecoin (DOGE) -7.33%, Polkadot (DOT) -13.32%, Uniswap (UNI) -10.09%, Bitcoin Cash (BCH) -10.49%, Litecoin -10.32%.
It follows recent crashes brought on by Tesla making a u-turn on accepting Bitcoin as payment for its products and China clamping down on initial coin offerings, block exchanges and warned against speculative trading.
A further blow was dealt when China ordered Bitcoin mining in its Sichuan province to shut down completely and furthermore told banks to stop supporting crypto transactions, in a latest wave of restrictions on cryptos.
This is what’s going on in the world of cryptocurrencies...
Why is the crypto market down?
China’s crackdown on cryptos comes days after Musk’s shock announcement.
Musk’s decision signifies a sharp u-turn for Tesla who only started accepting Bitcoin as payment for its services in February 2021.
It came after the electric car company bought $1.5b (£1.06b) of Bitcoin shares, which in turn sent the market price of both the crypto and Tesla soaring.
Yet the impact on the environment of Bitcoin mining - a complicated process of minting new digital tokens - has seen Tesla withdraw this option for customers.
The billionaire entrepreneur said: “We are concerned about rapidly increasing use of fossil fuel for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
Musk reaffirmed his belief that cryptocurrency has a “promising future” but that it “cannot come at great cost to the environment”, in his Twitter post.
Musk has been a long-time advocate of cryptocurrencies and the Tesla decision was felt across the market, with other digital tokens going down in price.
What is the price of Bitcoin and Ethereum?
The price of Bitcoin was £21,719.56 after the latest drop in prices (20 July), according to Coinbase.
In the last 24 hours, Ethereum had dropped to a value of £1,270.81.
Cryptocurrencies are seen as an alternative to traditional banking methods, cheaper to move money around due to not being regulated by the government or its banks.
The decision by Tesla, and announced by Musk, was seen by some as a slight on the credibility of cryptos to become a viable method of payment against physical currencies.
Which crypto prices are down?
Bitcoin wasn’t the only cryptocurrency to feel the initial effects, with the rest of the top 10 all experiencing dips in value.
Dogecoin, which was initially set up as a joke in 2012 before seeing its shares skyrocket, has faced the worst of it with significant double digit drops due to China’s crackdown.
Musk’s influence cannot be underestimated as, even though the likes of PayPal, Mastercard and Facebook have backed cryptos, the Tesla announcement still rocked the market.