The value of Bitcoin has continued to plummet, falling below the $40,000 mark on Wednesday as the entire crypto market shed over $350 billion.
The reasons for the decline that led BTC to lose massive value in the past week revolves around the bearish sentiment that emanated from the regulatory pressure meted on the cryptocurrency and its suspension as a payment method for Tesla products due to concerns over the environment.
The lows of BTC went down as low as $38,500 before springing slightly up again. This recent development follows after the cryptocurrency witnessed a rough week of successive dips. The value of BTC currently sits at about $40k which is close to 40% decline since it recorded an all-time high in the early days of February.
The rapidly declining value in cryptocurrencies has triggered a sense of fear in the crypto markets as speculative traders begin to panic sell. However, a popular crypto trader, Scott Melker has attempted to calm followers on Twitter with this tweet, “Bitcoin putting in new lows, probably buy more soon”
Most experts and pro traders aren’t yet bearish in their predictions of BTC value even after a dip below $40,000.
Increasing Governmental Regulations is Speculated to be Affecting the Value of Cryptocurrencies
Sell pressure on the crypto market accelerated just after the Chinese government through a joint body of three institutions under the Central Bank banned financial institutions in the country from making transactions in cryptocurrency.
The joint body has also warned investors of the speculative nature of cryptocurrencies whilst increasing efforts to develop its digital version Yuan as it tests trails beyond borders.
The value of the top five cryptocurrencies aside from BTC was not exempt from the general market decline. Ethereum, Binance Coin, Cardano, and Dogecoin have all faced sharp declines in double-digit percentages within the past 24 hours which indicates the overall crypto market value losing over $700 billion from the recent week
Tesla’s Profits Melts as the Crypto Market Bleeds
World-renowned automobile manufacturing company, Tesla, is losing its profits from holding Bitcoin since early February.
The company has lost nearly a 100% of its profits generated as the price of BTC retraced to the value at the period Tesla purchases the crypto. The purchase was announced on February 8th when Bitcoin was trading at a value of around $39k.
Criticisms and blames have been thrown at Tesla CEO, Elon Musk, for the fear signal he was perceived to have triggered after he made an announcement on Twitter of Tesla parting with Bitcoin as a transaction mode due to the damage its mining method causes on the environment. The announcement had sparked an instant selloff from anxious traders, leading the value of BTC to drop massively from a trading spot above $55k, which it still hasn’t recovered to.
Vocal critics have taken to Twitter to banter with the business mogul over his derogatory statements about the cryptocurrency. However, Elon Musk has stated in a reply to one of his critics that Tesla hasn’t sold out her stake in Bitcoin contrary to speculations.
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