The value of the world biggest digital currency Bitcoin has fallen to lowest levels since early February, continuing a downward spiral that has been ongoing for a week now.
The digital currency is now valued below $37,000 for the first time in over three months on Wednesday, CNBC reported.
The digital currency was down 20 percent in the last 24 hours, hitting a low of around $36,189 on Wednesday morning.
This is a massive change in the past three months, after the of Bitcoin began surging in February when Tesla in a filing with the US Securities and Exchange Commission (SEC) revealed that it had purchased $1.5bn (£1.1bn) worth of Bitcoin.
That prompted the price of the digital currency to jump to $43,765 per coin, and its value kept increasing in the following weeks.
Another boost came in late March, when Elon Musk confirmed Telsa vehicles in the United States could be purchased by Bitcoin.
In mid April the value of Bitcoin surged again and reached a high of $63,000 (£45,800). It then peaked at a record high of $64,829 – its high water mark.
But last week the wheels came off when Elon Musk, one Bitcoin’s biggest champions, said Tesla would no longer accept Bitcoin payments from customers, due to environmental concerns about its generation.
That prompted Bitcoin to fall last week down to $50,933.
This week on Wednesday it is down to $36,189.
Elon Musk’s u-turn came because Bitcoin mining uses large amounts of energy, much of it derived from the burning of fossil fuel.
Essentially this is because Bitcoin is created when high-powered computers compete against other machines to solve complex mathematical puzzles, a process known as mining.
This is mostly done in China, and is an an energy-sapping activity that currently often relies on electricity generated with fossil fuels, particularly coal.
But other factors have also influenced the decline in Bitcoin, namely issues in China, when three Chinese banking and payment industry bodies on Tuesday issued a statement warning financial institutions not to conduct virtual currency related business, including trading or exchanging fiat currency for cryptocurrency.
It should be remembered that despite this new low for Bitcoin, it is still up over 30 percent year-to-date and around 300 percent in the last 12 months.
Last month the Bank of England and HM Treasury revealed that the Chancellor, Rishi Sunak had asked them to look at the case for a new “Britcoin”, or central bank-backed digital currency.
That is a big change considering that seven years ago in 2014, the Bank of England warned that Bitcoin could pose a threat to financial stability in the UK – should it see widespread adoption.
And the Governor of the Bank of England (BOE), Andrew Bailey, earlier this month had a very blunt warning for people investing in cryptocurrencies.
Bailey said cryptocurrencies “have no intrinsic value” and people should only buy cryptocurrencies if they are prepared to lose all their money.
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