Cryptocurrencies took a plunge of nearly $1 trillion on Wednesday with investors shying away from assets considering the risk factor of inflation.
Bitcoin and Ethereum also posted the largest single-day drop since March 2020. The decline is observed owing to the Chinese ban on financial payment institutions from providing cryptocurrency services, reported Reuters.
Global market strategist Nikolas Panigirtzoglou said, “The bitcoin flow picture continues to deteriorate and is pointing to continued retrenchment by institutional investors,” Reuters reported.
According to the report, institutional investors seemed to have shifted towards the trends of the previous two quarters like traditional gold.
Bitcoin plunged more than 30% to $30,066 and Ethereum fell over 40% at $1,850 highest single-day drop for both the digital coins.
Tesla CEO Elon Musk also announced on May 13 that the electric car manufacturing company will no longer accept Bitcoin as payment for its vehicles citing the environmental cost for its use.
“Bitcoin. We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel”, read Musk’s tweet.