Bitcoin resumes sell-off over weekend, falls below $32,000

PUBLISHED: Mon, 24 May 2021 09:24:18 GMT
Hannah Miao
CNBC
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Key Points
  • The bitcoin sell-off continued Sunday following a roller-coaster week of trading.
  • Bitcoin fell roughly 16% to $31,772.43 by 12:27 p.m. ET, according to Coin Metrics data.
  • Bitcoin on Wednesday plunged more than 30% at one point to nearly $30,000, its lowest price since late January.
  • Chinese authorities and the U.S. Treasury last week announced moves to tighten regulations and tax compliance on cryptocurrencies.
A visual representation of the cryptocurrency Bitcoin on November 20, 2018 in London, England.
Jordan Mansfield | Getty Images

The bitcoin sell-off continued Sunday following a roller-coaster week of trading, as authorities in China and the U.S. move 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.

The world’s largest cryptocurrency on Friday afternoon traded at $35,891.20.

Bitcoin’s recent sell-off 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.

Tesla CEO Elon Musk, who helped fuel bullish sentiment when his company bought $1.5 billion of bitcoin, delivered a blow earlier this month when he announced that the automaker had suspended vehicle purchases using the cryptocurrency over environmental concerns.

Musk subsequently sent mixed messages about his position on bitcoin, implying in a tweet that Tesla may have sold its holdings, only to clarify later that it had not done so.

“The asset class continues to be highly volatile, with the potential of significant price movements resulting from a single tweet or public comment,” CIBC analyst Stephanie Price said in a note Thursday.

A JPMorgan report showed large institutional investors were dumping bitcoin in favor of gold. The news raised questions about institutional support for the cryptocurrency.

Cryptocurrencies continued to slide as Chinese authorities called for tighter regulation on crypto mining and trading, and the U.S. Treasury announced that it would require stricter crypto compliance with the IRS.

Bitcoin on Wednesday plunged more than 30% at one point to nearly $30,000, its lowest price since late January, according to Coin Metrics. The cryptocurrency peaked in April near $65,000.

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“Even with this week’s selloff cryptocurrencies have had an incredible run over the last year,” Price said.

Bitcoin is up 268% in the past year, according to Coinbase. Ether, the second largest cryptocurrency, grew more than 840%.