Due to Bitcoin and other crypto currencies inconstancy On Wednesday a statement posted on The Chinese Banking Association’s website said financial institutions should sedulously abstain from providing services using digital currencies.
Other digital currencies suffered sharp declines after the statement was passed on.
Before Wednesday, Tesla’s decision to not accept the digital currency as payment for cars, along with concerns about tighter regulation of digital currencies, were major factors in the decline. The price is still up about 31% in 2021 and nearly 300% from a year ago.
The price of Bitcoin fell as much as 29% after the China Banking Association warned member banks of risks associated with digital currencies.
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
Virtually every cryptocurrency fell after the industry group’s statement. Bitcoin slumped to $30,202 before recovering to $38,038, down 12% on the day, according to Coindesk. Most cryptocurrencies lost between 7% and 22% of their value and shares of Coinbase dropped 5.4%