The price of bitcoin fell 4.3% this morning to $31.100 and, according to some analysts, a break of the $30.000 level would seriously affect the climate and increase the risk of a larger sell-off. A while ago, bitcoin was trading at around $32.000.
Yesterday, China’s central bank announced that it had called on executives of major banks as well as AliPay to suspend cryptocurrency services. Concerns about the environmental impact of energy-intensive computers that support bitcoin also continue to be on the rise, with Chinese officials shutting down crypto currency mining companies.
Meanwhile, the prospect of reducing support measures as the global economy recovers from the pandemic also limits the willingness to make speculative investments.
The fall in the price of bitcoin has weakened the argument of their supporters, such as MicroStrategy’s Michael Saylor, that digital currency is a means of storing value. MicroStrategy announced on Friday that it had bought an additional 13.005 bitcoins for about $489 million with an average purchase price of about $37.600.
The news, however, failed to significantly boost prices amid concerns that wider adoption of bitcoin by institutional investors is being halted following the distancing of Elon Musk and Tesla.
A break of the $30.000 limit would mean a “big blow” to the climate and possibly “big sales” across the crypto currency market, the head of the digital asset derivative exchange, Delta Exchange, said in an e-mail. It was also stated that the largest crypto currency is expected to reach $40.000 in the weeks to come.
The price of Ether, the second largest crypto currency, fell today to 4.2%, while the price of Dogecoin plunged 22% in the last 24 hours. “Most crypto currencies have lost momentum against Bitcoin after their best performance,” said the founder of Fairlead Strategies.