The dramatic decline in the price of bitcoin and other cryptocurrencies comes as a result of negative criticism and other catalysts, from Elon Musk to the new round of regulation by the Chinese government, which have hit an area characterised by extreme volatility.


The most popular cryptocurrency fell more than a quarter low on Wednesday, to $30.000, a drop of more than 30%. Ether, the second-largest digital currency, also fell sharply to below $2.000 instantly, down more than 40% in 24 hours.


The recent price drop is a correction in relation to the outrageous rise in the second half of last year. The price of bitcoin still remains at 200% higher than in September, the product of a bull rally provoked by hedge funds, banks and other companies that seemed to embrace the cryptocurrency.


“More people now own cryptocurrencies. It reached into the pockets of people all over society under the influence of a combination of events – a combination of Tax Day, Elon Musk tweets, and anything else, where positivity was reflected in price movements, and now we have a “liquidation situation,” bitcoin defender Mike Novogratz told CNBC.


Part of the reason for the weakness of bitcoin seems to be the momentary decline of its wider institutional acceptance.


Earlier this year, Elon Musk announced that he bought bitcoin worth more than $1 billion for Tesla. Many payment system companies have announced that they will upgrade to cryptocurrency trading, and major Wall Street banks have begun working on cryptocurrency trading. In mid-April, Coinbase went public.


However, Musk announced last week that Tesla would no longer accept bitcoin as a means of payment due to environmental concerns, although he made it clear that the company would not sell what it owned.


Coinbase, whose stock jumped above $400 shortly after its first trading on Wall Street on April 14, quickly lost its earnings and fell about $220 per share on Wednesday morning. The day it went public is also the day bitcoin hit a record high.


In addition, a new report from JPMorgan reported that institutional investors appear to be moving away from bitcoin and back to gold. Although its proponents want to present bitcoin as a possible replacement for gold, its volatility does not inspire the same confidence.


The weakness, however, is not limited to cryptocurrencies, as there is a wider movement of investors away from speculative transactions.


The technological and growth stocks that yielded during the pandemic have also been struggling in recent weeks.


The Ark Innovation fund of the popular Kathy Wood, has fallen more than 30% from the highs of February. On Wednesday, the technology Nasdaq is 6.9% below its recent high on April 26. Russell 2000 is down 5.6% for the same period.