As the crypto market continues to fall, the market cap of all cryptocurrencies has slipped just below $1.5 trillion, according to data from metrics site Nomics.
This marks a 9% decrease in the past 24 hours, a 35% decrease in the past week, and a sharp decline from all-time highs of about $2.5 trillion achieved close to the start of the month.
A 9% overnight crash knocked a further 7% off of the price of Bitcoin, which is now worth about $35,000. The dip also lopped 13% off of Ethereum, now priced at $2,073—less than half its all-time high of $4,165 achieved on May 11.
Smaller altcoins fared even worse. Binance Coin (BNB) is down 18% in the past 24 hours. At a price of $257 and a market cap of $39 billion, it has slipped two positions in the rankings to become the sixth-largest cryptocurrency by market cap. Cardano (ADA) and Dogecoin gladly took its place, even though they fell by 14% and 9% overnight, respectively.
A string of bad news is behind the crash. The damage started on May 12, when Elon Musk, CEO of Tesla and SpaceX, retraced his support for Bitcoin and announced that Telsa would no longer accept payments in Bitcoin.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
Tesla had bought $1.5 billion in Bitcoin in January, and the purchase signaled to retail investors that the coin could be worth taking seriously. After all, Musk is among the richest people in the world—surely he knows how to spend his money.
It turns out that Musk did not know what he was getting into; he spent the past week trashing the coin and undermining its biggest supporters. Musk cited issues with Bitcoin’s energy-intensive proof-of-work mining mechanism, and the concentration of miners in China.
Several top cryptocurrency exchanges, such as Coinbase, Binance, Kraken and Huobi suffered outages when the price of Bitcoin crashed; some, such as Binance and Huobi, temporarily suspended withdrawals of Ethereum tokens.
Some of our fiat channel partners can’t handle the load on their side now. But they are very excited about the growth in users we brought to them. haha. Sorry for the inconvenience though. Working on it.
— CZ 🔶 Binance (@cz_binance) May 19, 2021
More price-pummelling followed on Wednesday when three prominent Chinese financial institutions reiterated their support for a 2017 ban that prevented them from transacting with customers who dealt with crypto. The institutions also warned that cryptocurrencies are highly volatile and speculative investments that can destabilize the “normal economic and financial order.”
The next blow came when China’s financial committee added cryptocurrency mining to a list of industries that ought to be monitored to “prevent and control financial risks.”
The announcement sparked concerns of a crackdown on Bitcoin mining. A study published in Nature last month, citing data from BTC.com, found that China accounts for approximately 70% of the world’s Bitcoin mining.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.