The digital currency was down more than 20% in a 24 hour period from Tuesday to Wednesday, according to Coinbase.
The cryptocurrency fell below $32,000 at one point in morning trading, and was at roughly $33,200 at 9:20 a.m. ET. It was the lowest level since late January. Bitcoin is down more than 30% in the last week, according to Coinbase.
That means bitcoin has now erased all its gains following Tesla’s announcement that it would purchase $1.5 billion worth of the cryptocurrency. It’s also down about 44% since hitting a record high of $64,829 in mid-April.
Luke MacGregor | Bloomberg | Getty Images
Then on Tuesday, three Chinese banking and payment industry bodies issued a statement warning financial institutions not to conduct virtual currency related business, including trading or exchanging fiat currency for cryptocurrency.
China’s hard line on digital currencies is not new. In 2017, authorities shut down local cryptocurrency exchanges and banned so-called initial coin offerings (ICOs), a way for companies in the space to raise money through issuing new digital tokens.
Traders in China once accounted for a huge share of the bitcoin market but after the crackdown, their influence was reduced significantly. Chinese cryptocurrency operations have moved abroad.
“The crypto markets are currently processing a cascade of news that fuel the bear case for price development,” said Ulrik Lykke, executive director at crypto hedge fund ARK36.
More than $250 billion evaporated from the bitcoin market alone last week, Lykke said. Though that number seems “astronomical,” such moves aren’t uncommon in the volatile crypto market, he added.
“In terms of Bitcoin’s outlook, things may be looking grim right now, but historically this is just yet another hurdle for Bitcoin to overcome and a small one compared to what it has braved in the past,” said Lykke.
Bitcoin is still up over 30% year-to-date and around 300% in the last 12 months.
Other cryptocurrencies also plunged. Ether, the digital currency that powers the Ethereum blockchain, was down 34% at $2,218, according to Coinbase. Dogecoin, a cryptocurrency that started as a joke and has been talked up by Musk, fell 44% to about 26 cents, according to Coin Metrics.
Read More: Bitcoin (BTC) price plunges below $35,000, hits lowest level since January