Bitcoin, Cryptocurrencies Tumble On Latest Crackdown; Coinbase Knocked Out Briefly

Bitcoin plunged more than 30% in a 24-hour period to its lowest level since January, as China widens its crackdown on cryptocurrencies. Bitcoin stocks like Marathon Digital Holdings (MARA), Riot Blockchain (RIOT) and Coinbase (COIN) also plummeted.


Chinese regulators have tightened restrictions that ban financial institutions and payment companies from providing cryptocurrency services, according to a Reuters report.

Beijing has sought to limit the spread of cryptocurrency for years. Officials have cited the risk that Bitcoin could be used for money laundering. They’ve also said controls were needed to maintain financial stability and protect the yuan’s status. The growing crackdown may also be an effort to boost China’s state-backed digital yuan initiative.

The price of Bitcoin fell below $30,202 early Wednesday but recovered somewhat after the stock market opened, down 13% to $37,498.86, according to Coindesk. Bitcoin notched an all-time high of $64,829.14 in April.

This month’s decline was made worse by recent tweets by Tesla (TSLA) CEO Elon Musk, who halted the use of Bitcoin for vehicle purchases, citing environmental concerns. Tesla bought $1.5 billion in bitcoin in February. Bitcoin sales added $101 million to its bottom line in the first quarter. Tesla stock fell 3%.

Other digital currencies also tumbled overnight. Ethereum plummeted below $2,000 per unit before regaining some of its loss. Ether was down around 19% at $2,696 on Wednesday. The meme-inspired cryptocurrency Dogecoin lost nearly 19%.

Meanwhile, top digital currency exchanges suffered website outages. Coinbase had intermittent downtime with issues across its website due to network congestion. It came back online midday. Kraken also had connectivity issues.

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Bitcoin Stocks

Bitcoin miner Marathon Holdings dropped 9% to 20.90 on the stock market today. Shares are well off their all-time high of 57.75 achieved intraday on April 6. MARA stock is also trading below its 50-day line, according to MarketSmith chart analysis.

Rival Bitcoin mining company Riot Blockchain tumbled 9%. Riot stock also is trading well below its 50-day line, which itself is sloping down. Its relative strength line is also trending downward.

Among other Bitcoin stocks, Coinbase, which went public on April 14, fell 9% to an all-time low of 216.97. Silvergate Capital (SI) lost 3%.

Meanwhile, MicroStrategy (MSTR), an enterprise analytics software company focused also on acquiring Bitcoin, slid 9%. 

On Feb. 24, MicroStrategy said it had purchased about 19,452 Bitcoins for approximately $1.026 billion in cash at an average price of approximately $52,765. The company now holds a total of about 90,531 Bitcoins. 

At the time, CEO Michael Saylor said MicroStrategy remains “focused on our two corporate strategies of growing our enterprise analytics software business and acquiring and holding Bitcoin.”

Square Holds Firm

Bitcoin price tracker Grayscale Bitcoin (GBTC) plunged 10%, while mobile payments firm Square (SQ) fell 2%. Square stock is in a weekslong consolidation with a buy point of 283.20.

Square CEO Jack Dorsey recently tweeted his support for Bitcoin, saying it “changes everything … for the better.” The tweet appeared to be in response to earlier comments by CFO Amrita Ahuja implying Square would be halting its purchase of Bitcoin, although he later said the company had not changed its strategy. Square reported a $20 million Bitcoin loss last quarter.

Follow Adelia Cellini Linecker on twitter @IBD_Adelia.


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