Bitcoin Heads For Worst Slide In Nearly 10 Years

Bitcoin is heading for its worst month of trading in nearly 10 years, as the digital currency sags in value over regulatory and environmental concerns.

The currency’s latest slide began earlier this month when Tesla on 12 May announced a reversal of its earlier plan to accept Bitcoin as a form of payment for automobiles.

China on 18 May then said it would intensify its long-running campaign against Bitcoin, which is largely mined in the country.

Bitcoin declined a further 8 percent to around $35,000 on Friday, ahead of the three-day Memorial Day weekend in the US.

Image credit: Tesla

Volatility

That took its losses for May to around 37 percent, which if sustained could be the currency’s worst month since September 2011, when it lost nearly 40 percent of its value.

That month was part of a three-month slide that took Bitcoin to a low of $2 per coin in October 2011.

Bitcoin has rocketed in value this year, and even with this month’s losses is still trading up more than 25 percent for the year to date.

The notoriously volatile cryptocurrency got a boost from Elon Musk’s announcement in late March that Tesla would accept it as a form of payment for cars.

In mid-April Bitcoin traded at an all-time high of $64,829.

Musk said he reversed his cryptocurrency policy because of concerns about the environmental impact of cryptocurrency mining, which is highly energy-intensive.

Bitcoin mining raises environmental concerns

Crackdown

He has agreed to meet with North America-based mining organisations to discuss the issue.

Meanwhile, energy regulators in China’s Sichuan are planning to meet with local power companies to gather information on cryptocurrency mining, an official reportedly said last Thursday, which could lead to a mining clampdown in the country’s second-biggest Bitcoin-producing region.

Smaller cryptocoins, including Binance coin, XRP and Polkadot, have mirrored Bitcoin with steep losses of their own in May.

Ethereum, which is often used for non-fungible token (NFT) deals, has fallen a more modest 6 percent.

Governments and regulators have long warned of the dangers of cryptocurrencies, with India reportedly considering banning citizens from holding them.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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