The bitcoin selloff continued Sunday following a roller-coaster week of trading. Chinese and American regulatory bodies moved to tighten regulation and tax compliance on cryptocurrencies.
Bitcoin fell roughly 16% to $31,772.43 by 12:27 p.m. ET, according to Coin Metrics data.
Bitcoin’s recent selloff is a major reversal for the cryptocurrency, which appeared to be gaining traction among major Wall Street banks and publicly traded companies. This month, however, bitcoin has been hit by a series of negative headlines from major influencers and regulators.
Elon Musk, who helped fuel bullish sentiment when his company bought approximately $1.5 billion of Bitcoin delivered a blow earlier this month when he announced that the Tesla would be suspending purchases using Bitcoin, which was due to concerns over environmental impacts that the proof-of-work blockchain had as miners ran worldwide.
While Bitcoin continues to gain traction as more businesses accept the cryptocurrency. The price volatility is an issue that not only affects speculators, but may be a reason that businesses may see Fiat as more of an attractive asset that cryptocurrencies. Overall, seeing an asset drop in value from 60k to 30k is not what businesses desire. Requiring that they implement a mechanism to always convert to USD or their countries denomination.
A JPMorgan report showed large institutional investors sold and moved funds into gold. One must question if Bitcoin and crypto ultimately in 2021 is only ever a speculative play, with a lack of businesses accepting the cryptocurrency, unlike USD, which is accepted everywhere globally.
Bitcoin is up 268% in the past year, according to Coinbase.