The cryptocurrency market, particularly bitcoin, took a tumble on Wednesday as China toughened its stance on digital coins.
According to CNBC, bitcoin dropped by 30 percent, at one point hitting about $30,000 USD before leveling off to about $40,000 USD later in the day. Ethereum and dogecoin also saw losses — ethereum sunk below $2,000 USD per coin, according to CNN Business, while dogecoin lost nearly 26 percent.
The drop came after China banned financial institutions and payment companies from conducting business using virtual currencies, a move that spooked the crypto trading space and heightened uncertainty.
Reuters reported that bitcoin recouped losses after Tesla founder Elon Musk and Ark Invest CEO Cathie Wood voiced their support for the coin. On Wednesday, Musk tweeted that Tesla had “diamond hands,” implying that the electric automaker would not sell its $1.5 billion USD stake in bitcoin.
Tesla has ? ?
— Elon Musk (@elonmusk) May 19, 2021
Bitcoin initially dropped earlier this week after Musk announced that Tesla would no longer accept Bitcoin as a payment for new vehicles.