On Sunday Bitcoin faced another huge sell-off that caused it to fall 13% and overall by almost 50% since hitting the peak in April this year. Ether also faced a tough time as it dropped by 17% on the day. The Crypto market has taken a hit since Elon Musk’s tweets on Tesla not accepting cryptocurrencies as payments. Recently China imposed a ban on banks and financial firms on providing crypto-related services which further affected the crypto-market.
After China’s new curbs on cryptocurrency, Bitcoin has dropped to a 3.5 month low, falling below the $40,000 mark. A drop of 40% since its all-time high of $64,895 in April 2021. Other cryptocurrencies also took a beating with Ether falling 12% and Dogecoin falling by 18%. Shares in COIN.O fell by 4% in pre-market trading. The recent selling of crypto has brought the market capitalisation of cryptocurrency from $3.5 trillion to $3 trillion.
Bitcoin, following Elon Musk’s tweet, rallied from a three-month low in a session that went back and forth. Musk, however, clarified speculations and said Tesla has not sold any bitcoins. On Monday bitcoin dropped almost 9% but rallied back to more than 5%. Ether dropped to $3,123.94 and dogecoin dropped nearly 7%. Ever since Musk tweeted about Tesla not accepting payments in bitcoins for cars, bitcoin has dropped by almost a quarter.
Cryptocurrency Ether, the token transacted on the ethereum blockchain, witnessed a 3% rise on the Bitstamp exchange to touch $3,144 to set a new record. The present value of the digital currency has jumped 325% higher in the year so far, outgrowing a 95% rise of bitcoin. Both Ether and Bitcoin soared over 100% this year and hit a 2.5-year high on the last Sunday. The rise in Ether highlights the fact that investors are diversifying their exposure.
Major digital currencies posted sharp losses after the news reports said that President Joe Biden was planning to double taxes on capital gains to 39.6% on an annual earning of $1 mn years, Bitcoin slipped to $47,555, falling below the $50k mark for the first time since March. Ether and XRP fell 3.5% and 6.7%, respectively, while dogecoin was down 20% at $0.21. The tax plans also jolted share markets, as investors booked profits and other risk assets.
PayPal will start allowing its users in the USA to use cryptocurrencies to pay its online merchants across the globe. Those having bitcoin, ether, bitcoin cash and litecoin in PayPal digital wallets will be able to convert them into currencies at checkouts to make the transaction. PayPal is working on the service since late last year, and in few months it will be available to its 29 mn merchants.
Meitu, a beauty app that helps touch up user-profile pictures, has reportedly bought 15,000 units of Ether for $22.1 mn and 379.1 Bitcoins for $17.9 mn in the open market on March 5. No other company has invested this heavily in cryptocurrency in recent times. The company has used as much as $100 mn of cash to fund crypto purchases because it believes that crypto could diversify its portfolio.