Bitcoin crashes below $30,000

The price of Bitcoin dropped 30% to about $30,000 at a point on Wednesday, the lowest it has been at since the recent instability in the crypto markets.

Since January, Bitcoin hasn't traded at a price that low, with the coin, even hitting $64,000 in mid-April. As the day went on, however, at about 3 pm, it rebounded slowly to about $38,205. This drop came as a shock to investors, who didn't expect the coin to drop to this low. 

Bitcoin wasn't alone, other crypto coins like Ether, the coin which powers the Ethereum blockchain, went down about 22% to $2,620.97. Just a few days ago, Ether was trading for over $4,000.

The price of Dogecoin also plunged, falling 25% to about $0.36 after trading for over a dollar. 

Elon Musk, Tesla CEO, has been blamed for this dip in the crypto market as his tweets have been partly responsible for the rise and fall of Bitcoin. Ever since he tweeted on the 12th of May that his company, Tesla, would cease accepting the digital coin as payment for its electric vehicles, citing environmental concerns, the price of Bitcoin dipped and over $300 billion was lost in the crypto market.

Another factor contributing to the drop in Bitcoin price is the Chinese government. On Tuesday, Chinese banking industry bodies issued a statement that warned financial institutions against conducting any virtual currency-related business, including trading or exchanging fiat currency for cryptocurrency.

China’s clamp-on digital currencies are hardly a surprise. In 2017, Chinese authorities shut down all local crypto exchanges and banned initial coin offerings, which is a way for companies in the space to raise money through issuing new digital tokens.

After the clampdown, China's budding crypto community diminished and their influence limited. Before that, Chinese crypto traders accounted for a significant share of the Bitcoin market.

Regardless of the reasons, one of the features of crypto is volatility, and sudden price drops should be expected. According to Ulrik Lykke, ED at ARK36 -a crypto hedge fund, 

“The crypto markets are currently processing a cascade of news that fuel the bear case for price development.

More than $250 billion evaporated from the bitcoin market alone last week.

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.”

Bitcoin is currently trading at $37,407. While Ether and Dogecoin are trading for 

$2,363 and $0.311 respectively.