For the second time in a month, Bitcoin has now fallen below the $30k threshold which cryptocurrency market insiders and traders previously warned could open the door to new lows in the cryptocurrency’s value.
The latest fall, showing Bitcoin toppling by at least 5% on the last 24 hours (July 20), comes after warnings that continuing global crackdowns on cryptocurrency mining operations and trading worldwide could be continuing to plague the market with greater levels of instability.
Bitcoin’s latest plunge to values below its $30,000 threshold has rippled across the market, with prices of other major cryptocurrencies like Ethereum, Cardano, Dogecoin and even stablecoins like Tether also trading down today.
Here’s what you need to know about this latest crypto crash, how much major coins like Bitcoin, Ethereum, Dogecoin are worth after the tumble and why this appears to be happening.
What is Bitcoin currently worth?
As of 12pm on Tuesday July 20, Bitcoin’s price was fluctuating around $29,789 – having reached a new low for July of $29,368 at just before 11am according to CoinDesk.
This placed Bitcoin as down around 5% on the last 24 hours, dropping by almost $4,000 in value since last Tuesday (July 13).
Prior to this, Bitcoin’s latest dip on Thursday July 8 saw the cryptocurrency hovering around $32,285.
Bitcoin’s initial shock fall occurred last month on Tuesday June 22 when, after hovering around the $30,000 threshold, the coin’s value plummeted to a new low of $28,814.75 that afternoon.
Since then, the currency has rebounded and managed to trend upwards again, but its price has remained in the low to mid $30,000s.
The recent plunge saw its highest value so far this year of $64,000 in May almost sliced in half, with pundits warning in late June that the dip to under $30,000 could lead to a sharp rise in sell-offs and more people refusing to ‘hodl’ their positions.
Ethereum prices were also down today – with the coin typically moving in tandem with Bitcoin dropping by over 6% in price as it reached $1,723.78 at 10.59am on Tuesday (July 20).
A popular cryptocurrency synonymous with the rising crypto trend of NFTs, Ethereum recorded a 24hr high of $1,870.07 as of this afternoon – down considerably from its usual $2,000 threshold and all time high of $4,382.73 in May’s cryptocurrency boom.
The hype surrounding popular memecoin, Dogecoin, has continued to show dwindling values and struggled to buoy hopes of reaching a much-anticipated $1 threshold, which the coin came closest to in April as its price soared to $0.683796.
Dogecoin’s latest slump has seemingly continued, with its price today down to the lowest value in a three month period as it reached $0.175495 this morning and recorded a 24 hour low as of 12pm today of $16.0001.
Why are crypto prices down?
The drop comes amid a growing crackdown on cryptocurrencies in China, where authorities in the southwest province of Sichuan ordered Bitcoin mining projects to close.
The State Council, China’s cabinet, recently vowed to clamp down on mining and trading as part of a series of measures to control financial risks.
While data on mining is scarce, production of Bitcoin in China accounted last year for about 65% of global production, according to data from the University of Cambridge.
Sichuan is its second biggest producer.
“(The) crackdown on Chinese miners might mean that they are offloading coin into a thin market and taking us lower,” said Ben Sebley of London-based crypto firm BCB Group.
China’s central bank said it had summoned some banks and payment institutions recently, urging them to crack down harder on cryptocurrency trading.
Agricultural Bank of China (AgBank), China’s third-largest lender by assets, said separately it was following the People’s Bank of China’s guidance and would conduct due diligence on clients to root out illegal activities involving crypto mining and transactions.
Companies that mine Bitcoin – an energy-intensive process – typically hold large inventories of the cryptocurrency, with any moves to sell large amounts depressing prices.
Following the move, countries like South Korea also pledged to tackle the rise in money laundering taking place via cryptocurrency, while the Metropolitan Police announced that it had successfully closed in on a huge UK cryptocurrency money-laundering operation.
On July 13, the Met declared that special investigators had made the UK’s largest cryptocurrency seizure yet, and one of the world’s largest seizures, seizing a whopping £180m worth of cryptocurrency.
In turn, cryptocurrency exchange platforms such as Binance have been feeling the heat across the world as regulators and governments have started to pay close attention to the operations of such platforms in the wake of the global crackdown on crypto.
Binance UK: GBP withdrawals suspended after FCA ban and cryptocurrency crackdown…
What is crypto mining?
Cryptocurrency mining describes the process whereby Bitcoin, or similar coins like Ethereum, Tether or Dogecoin, are given to users as a reward for solving computational puzzles to verify and validate ‘blocks’ of transactions.
These are then added to a blockchain, helping to increase its value through clean, valid transactions, with miners rewarded for doing so with cryptocurrency.
As a decentralised network and form of currency, the lack of banks and infrastructure to authenticate transactions and exchanges means that mining is essential to the functioning and value of any cryptocurrency.
So clampdowns by state authorities on the activity – especially in countries where lots of mining takes place – will cause drops in the price and value of Bitcoin.
Additional reporting by Reuters journalists Tom Wilson, Kevin Buckland and Julien Ponthus