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Home >Markets >Cryptocurrency >Bitcoin drops below $40,000, lowest level since February

Cryptocurrency Bitcoin plunged nearly 14% to hit an intraday low of $39,522.19 at around 12:30 pm ET, according to CoinDesk data. The world's largest cryptocurrency by market capitalization fell to its lowest level since February 9. Bitcoin is trading around 40% lower from its all-time high of $64,829.14 hit in April.

Other cryptocurrencies including Ethereum also witnessed a sharp fall. ETH fell below $3,000, declining around 17% over the past 24 hours, as per CoinDesk's data. Last week, Ether had surpassed $4,000 for the first time.

The cryptocurrencies slumped after the People’s Bank of China (PBOC) conveyed a statement reiterating that digital tokens can’t be used as a form of payment. China has banned financial institutions and payment companies from providing services related to cryptocurrency transactions, and warned investors against speculative crypto trading.

It was China's latest attempt to clamp down on what was a burgeoning digital trading market. China has banned crypto exchanges and initial coin offerings but has not barred individuals from holding cryptocurrencies.

The moves were not Beijing's first moves against digital currency. In 2017, China shut down its local cryptocurrency exchanges, smothering a speculative market that had accounted for 90% of global bitcoin trading.

The cryptocurrency market has taken a turn for the worse over the last week after Tesla chief Elon Musk expressed concerns over its power consumption. On May 12, Musk said the electric carmaker had suspended vehicle purchases using bitcoin, citing environmental concerns. Musk’s comments caused over $300 billion to be wiped off the entire cryptocurrency market that day.

(With inputs from agencies)

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