Crypto price – live: Bitcoin, ethereum and dogecoin suffer huge losses after China announcement

The price of bitcoin has plummeted below $40,000 amid a much wider crash that has wiped hundreds of billions of dollars from the crypto market.

Bitcoin is currently trading at its lowest point since April, briefly dipping as low as $38,717 on Wednesday morning according to CoinMarketCap’s price index. It has since bounced back slightly but is struggling to return above the $40,000 threshold.

One reason for the sudden drop could be China’s announcement to ban financial institutions from providing services relating to cryptocurrency transactions.

Several other major cryptocurrencies have been dragged down with bitcoin, including ethereum, dogecoin, cardano and bitcoin cash. All four dropped by between 15 and 20 per cent overnight.

Ethereum co-founder Charles Hoskinson has offered advice to Elon Musk on how to radically upgrade the cryptocurrency dogecoin in order for it to become “the currency of Earth”.

The Tesla boss and self-appointed Dogefather claimed this week that “low fees and high volume” are needed for dogecoin to ever make sense as a mainstream form of currency.

“Ideally, Doge speeds up block time 10X, increases block size 10X and drops fee 100X,” Mr Musk tweeted this week. “Then it wins hands down.”

A lot has been said about Cardano (or, more specifically, the Ada cryptocurrency that runs on the platform) recently. Even more was said about it last week, when it defied the gloomy crypto market to continue to do well.

Since Elon Musk’s announcement last week that Tesla would no longer be accepting bitcoin payments due to environmental concerns, only one major cryptocurrency has appeared immune to the market-wide downturn.

Cardano’s Ada cryptocurrency actually climbed to a new all-time high in the aftermath of Musk’s tweet, reaching above $2 for the first time in its history to add to its already considerable price gains in 2021.

This could be down to Cardano’s green credentials, which its developers describe as the “most environmentally sustainable” crypto platform.

Bitcoin has rebounded slightly overnight, returning back above $45,000. Transaction volumes also remain high, and some analysts appear hopeful that the cryptocurrency still has upward momentum on its side.

The pseudonymous PlanB, whose stock-to-flow model maps bitcoin’s previous bull and bear markets, has compared the latest dip to similar patterns seen in 2013.

Bitcoin’s recovery appears to have helped other leading cryptos, with Ethereum (ether), dogecoin and bitcoin cash all up by between 3-7 per cent since yesterday, while Ripple (XRP) is up nearly 10 per cent.

Bitcoin has now fallen below $43,000, with investors hoping there is solid resistance at $40,000.

The last time BTC fell this low was back in February, when a flash crash saw it plummet in price before soaring up above $60,000 just two weeks later.

Market analysts appear hopeful that a similar pattern can be followed by bitcoin, and alternative cryptos in general, despite the power demonstrated by Elon Musk to move the market so drastically with just a single comment. Here’s what one expert had to say:

One of the creators of ethereum has “burnt” billions of dollars in shiba inu-themed cryptocurrency, saying that he did not want to hold onto the viral currency.

Vitalik Buterin – who is the youngest crypto billionaire in the world – moved the coins into a dead wallet address, effectively destroying some 41 per cent of the currency that was in circulation. He held on to a small number of the coins and intends to give them to charity, as he recently did by donating to the Indian covid response.

Is the current drop in bitcoin’s price terminal, or at least going to last for a while? Here’s the advice from experts – “when in doubt, zoom out”.