The value of Bitcoin plunged after the crackdown of the Chinese government.

The value of Bitcoin falls by 30% after the crackdown of the Chinese government.

Image source: Yahoo Finance

The value of the Bitcoin currency and the cryptocurrency have fallen by 30% on Wednesday after the crackdown of the Chinese government on the banks. The world’s largest digital currency has fallen by $30,000 amid frenzied trading. The value of the currency has fallen by more than 50% since its highest record of more than $64,000 in mid-April.

The pressure on the cryptocurrency has emerged after the tweet of the Tesla Chief executive, Elon Musk whose investors had turned their backs when it came to supporting these coins.

But the major effects were seen after the Chinese financial industry announced that the banks and payment firms will no longer use any kind of cryptocurrency.

“Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” the regulator’s statement, issued on Wednesday, said.

Laith Khalaf a financial analyst at stockbroker AJ bell stated that the tides have turned on Bitcoin.

On the other hand, Arks Investment Management CEO Cathie wood who have invested in several cryptocurrencies stated that they still held a $500,000 price target on Bitcoin.

Earlier this week Musk has also clarified that he hasn’t sold any of bitcoin and also exchanged the plans of Tesla’s Bitcoin Holdings. Apart from this Musk also tweeted that Tesla still has the hands of diamonds.

The ability of Musk of shifting the price with a single tweet has given further ammunition to critics who say cryptocurrencies are too volatile.

Picture credit: Cryptocurrency News

Another cryptocurrency Dogecoin has also tumbled by more than 40% before paring some of its losses on Wednesday and to trade roughly 15% lower at $0.40. Dogecoin has failed to recover after Musk described the virtual currency as a “hustle” during his arrival on the US comedy sketch show, Saturday Night Live earlier this month.

Shares of Tesla Inc fell 2.5% on Wednesday, underperforming the wider market, as China’s crackdown on cryptocurrencies has brought a lot of trouble for the electric car maker.

Tesla revealed initially in February it had purchased around $1.5 billion of bitcoin, and later sold around 10% for a $101m profit.

Also, read: Bitcoin all set to replace traditional currency?

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