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- Bitcoin plunged 30% in one session to drop till $30000 levels on 18.05.21 as Elon stated that Tesla will not accept payments in Bitcoin
- $300 billion was wiped off from the cryptocurrency market in a single day creating a new record on its way
- Three Chinese regulatory authorities came down hard on mining and trading activities of cryptocurrency combined with prohibition of Initial Coin Offerings (ICO)
The digital currency fell 30% to its January lows where it had touched $30k. In April, Bitcoin reached its highest peak of $62k with investors making merry for their superior profits. Altcoins fell 40% in the crash that was more than orchestrated, as many experts may like to put it.
In February, Tesla had announced that it would purchase $1.5 billion worth of Bitcoin and it would accept it as a means of payment for purchasing electric cars. Moreover, out of the blue regulations from China for mining activities had investors reeling under pressure as they were still rejoicing in their April gains.
Bitcoin lost $250 billion in value in the same week as it continues to trade around $36k at the time of writing. Moreover, the most famous cryptocurrency is up by 300% over the same period last year.
Elon tweets for the umpteenth time
Soon after tweeting that Tesla would accept payments in Bitcoin, Elon Musk realised the harmful effects of Bitcoin mining on the environment. It went against Tesla’s policy of using renewable sources of energy and developing sustainable sources of living.
Within months, he changed his stance by clarifying the conflict of interest to the public via Twitter. However, Elon assured that the company was not selling its Bitcoin anytime soon as they are long term investors in the digital currency.
As Bitcoin is not issued by a central authority, it is mined by the use of excessive computational power. Validators mine cryptocurrency after verifying the transactions on a particular block and establishing its accuracy. The energy consumed leads to greenhouse gas emissions that are detrimental for the environment.
Chinese regulations rubbing salt in the wound
The Asian superpower continues to take a hard stance against digital currencies for multiple reasons. First and foremost, the harmful effects are concerning China’s ambitious climate goals. Hence, it has placed a ban on mining activities where a country has the highest share of mining cryptocurrency due to the availability of low cost electricity.
Secondly, the government plans to come up with its own digital currency. The digital Yuan is under pilot projects under numerous projects as it will be distributed in the form of lotteries. The National Internet Finance Association of China, the Payment and Clearing Association of China and the China Banking Association have come together to enforce stricter guidelines.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
