Bitcoin prices continue to fall sharply today after a very difficult week for traders and investors.
It comes shortly after Elon Musk and Tesla announced that they would be making purchases in the cryptocurrency due to the “insane” use of coal to mine.
At the time of writing, Bitcoin fell more than 20 percent to less than $ 35,000, wiping out more than half a trillion dollars in value from the coin’s highest market value.
Ethereum, the second largest coin, fell more than 40 percent. Dogecoin lost 45 percent.
All the profits lost after Tesla’s announcement, but why on earth is it crashing?
Whether you are an investor or just a person interested in the topic, here is everything we know so far about the massive drop in prices.
Why are Bitcoin, Dogecoin and Ethereum crashing?
This all comes from a new announcement by Chinese officials after they imposed new rules to stop token and coin trading.
Beijing on Tuesday banned financial institutions and payment companies from offering services related to cryptocurrency transactions.
It also warned investors against speculative crypto trading.
In a statement, the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China claimed that cryptocurrencies “are not backed by real value.”
“Recently, cryptocurrency prices have skyrocketed and fallen, and speculative cryptocurrency trading has rebounded, seriously violating the security of people’s property and disrupting normal economic and financial order.”
China is one of the largest investors in Bitcoin. Around 75 percent of global Bitcoin mining takes place in China, where there is cheap electricity and relatively easy access to manufacturers who make specialty hardware.