The price of bitcoin fell by almost 30% on Wednesday, after a Chinese government crackdown on banks’ use of cryptocurrencies accelerated a long-predicted sell-off.
The world’s largest digital currency tumbled to about $30,000 (£21,000) amid frenzied trading, a drop of over 50% since it hit record highs of more than $64,000 in mid-April. However, by 6pm UK time, the bitcoin price had risen back to about $40,000, still down 8% on the day, according to Refinitiv data.
Critics have been predicting a sell-off for months, claiming the coin has no intrinsic value. The Bank of England governor, Andrew Bailey, has even warned that investors should be prepared to lose all their money if they dabble in cryptocurrencies. Meanwhile, the European Central Bank has compared bitcoin’s meteoric rise to other financial bubbles like “tulip mania” and the South Sea bubble, which eventually burst in the 17th and 18th centuries. » | Kalyeena Makortoff and Graeme Wearden | Wednesday, May 19, 2021
