plunged 30% to near $30,000 at one point on Wednesday, continuing a major sell-off in the cryptocurrency markets that began a week ago.
The digital currency hit as low as $30,001.51 as the selling intensified Wednesday before paring some of those losses. The cryptocurrency hasn’t traded at those levels since late January.
Bitcoin rebounded as the day went on, was down 12% to about $38,205.49 shortly after 3 p.m. ET. At its intraday low, the cryptocurrency’s loss for the past week was more than 40%.
The sharp drop means bitcoin had temporarily erased all its gains following Tesla’s announcement that it would purchase $1.5 billion worth of the cryptocurrency. It was also down more than 50% since hitting a record high of $64,829 in mid-April.
Other cryptocurrencies also plunged on Wednesday. Ether, the digital currency that powers the Ethereum blockchain, was down more than 22% at $2,620.97, according to Coin Metrics. Dogecoin, a cryptocurrency that started as a joke and has been talked up by Tesla CEO Elon Musk, fell 25% to less than 36 cents. Both had substantially larger losses earlier in the session.
Additionally, cryptocurrency exchange Coinbase was temporarily down for some users as the coins plunged on Monday morning.
Negative news over the past week has dampened sentiment for bitcoin.
On May 12, Musk said the electric carmaker had suspended vehicle purchases using bitcoin, citing environmental concerns over the so-called computational “mining” process. This is where high-powered computers are used to solve complex mathematical puzzles to enable transactions using bitcoin.
Musk’s comments caused over $300 billion to be wiped off the entire cryptocurrency market that day.
Musk did suggest on Wednesday that the automaker was not selling its existing bitcoin, saying with emojis on Twitter that Tesla has “diamond hands.” That tweet was published near bitcoin’s lows for the day.
The announcement to suspend bitcoin payments came just three months after Tesla revealed that it bought $1.5 billion worth of bitcoin, and would start accepting bitcoin in exchange for its products.
Early this week, the Tesla CEO suggested the company may have sold its bitcoin holdings but later clarified that it has “not sold any Bitcoin.”
Then on Tuesday, three Chinese banking and payment industry bodies issued a statement warning financial institutions not to conduct virtual currency related business, including trading or exchanging fiat currency for cryptocurrency.
China’s hard line on digital currencies is not new. In 2017, authorities shut down local cryptocurrency exchanges and banned so-called initial coin offerings (ICOs), a way for companies in the space to raise money through issuing new digital tokens.
Traders in China once accounted for a huge share of the bitcoin market but after the crackdown, their influence was reduced significantly. Chinese cryptocurrency operations have moved abroad.
“The crypto markets are currently processing a cascade of news that fuel the bear case for price development,” said Ulrik Lykke, executive director at crypto hedge fund ARK36.
More than $250 billion evaporated from the bitcoin market alone last week, Lykke said. Though that number seems “astronomical,” such moves aren’t uncommon in the volatile crypto market, he added.
“In terms of Bitcoin’s outlook, things may be looking grim right now, but historically this is just yet another hurdle for Bitcoin to overcome and a small one compared to what it has braved in the past,” said Lykke.
Bitcoin is still up over 30% year-to-date and around 300% in the last 12 months.