Bitcoin fell below $30,000 on Monday for the first time since June 22, wiping out nearly $100 billion from the entire cryptocurrency market in 24 hours.
Bitcoin was down more than 6% while ether fell nearly 9% and XRP tanked almost 10%, according to CoinDesk data.
Bitcoin has been locked in the broad price range of $30,000 to $40,000 since mid-May, and briefly broke below the $30,000 mark on June 22. The cryptocurrency fleetingly traded at $29,700 a day after the People’s Bank of China ordered the country’s major financial institutions to stop facilitating crypto transactions.
The plunge in bitcoin came after a big sell-off in global stock markets. On Monday, the Dow Jones Industrial Average had its worst day since last October.
“There’s been a broad sell-off in global markets, risk assets are down across the board,” Annabelle Huang, partner at cryptocurrency financial services firm Amber Group, told CNBC.
There are “concerns of the quality and strength of economic recovery” and “broader risk assets turned weaker including high yields,” Huang said. “Coupled with recent BTC (bitcoin) weakness, this just sent crypto market down further.”
The crypto landscape has seen some shifts lately. Binance, the popular crypto exchange, has been booted out of several countries over concerns about the way it regulated its site, and China has been enacting new rules on cryptocurrency companies.
And Malaysian authorities recently destroyed bitcoin mining equipment which had been valued at $1.2 million. They’d been seized for operating illegally.
In early June cryptocurrencies took a nose dive when former US President Donald Trump said bitcoin was a “scam.”
“Bitcoin, it just seems like a scam,” he told Fox Business. “I don’t like it because it’s another currency competing against the dollar… I want the dollar to be the currency of the world. That’s what I’ve always said.”
Bitcoin volatility nothing new
Speaking recently to Greek Reporter, Lexy Prodromos, Executive Director at the Chicago Blockchain Center, a non-profit public/private initiative dedicated to blockchain advocacy, education and community innovation, said that bitcoin volatility is nothing new.
“It’s completely market determined. It’s a global network that’s not owned or operated by a single company or country or government. So price volatility is definitely a part of owning Bitcoin,” Prodromos told Greek Reporter.
“I think people are recognizing Bitcoin’s value and that it is a scarce digital asset, that will gain in value over the long run,” Prodromos said.
In fact, there are only 21 million bitcoins that can be mined in total, with the final coins being minted in around 2140. Once the circulating supply reaches its maximum, Bitcoin miners will no longer receive block rewards — since there’s only ever going to be 21 million of them.
The limited supply of Bitcoins is one of the reasons, proponents believe, that its value will keep on rising despite occasional hiccups.
“I’ve been around in the space for the last five or six years or so. And even in that time we’ve had price dips like this before, we’ve had several magazine articles over the years declare that Bitcoin and cryptocurrency is dead,” the Greek-American exec notes.