Bitcoin falls below $ 40,000 after new Chinese bans

By Tommy Wilkes and Sujata Rao

LONDON (Reuters) – Bitcoin fell below the $ 40,000 threshold on Wednesday to a three-and-a-half-month low on a wave of digital currency sales that intensified after China banned financial and payment institutions. provide cryptocurrency services.

Bitcoin, the broadest and most well-known cryptocurrency, had already been under pressure from a series of tweets from Tesla boss Elon Musk, but news from China pushed it back to $ 32,241, a 24% drop so far. of the session.

The cryptocurrency has fallen by at least 40% from the record of $ 64,895 reached on April 14. It is also heading for its first monthly decline since November 2018.

Bitcoin’s decline hit other assets. Ether, the currency linked to the ethereum network, lost as much as 28% on Wednesday at $ 2,426. In the week, it accumulates losses of 40% since it reached a historical maximum on May 12.

Cryptocurrency price drops last week were triggered by Musk’s remarks that Tesla will no longer accept bitcoin as payment. His subsequent tweets caused further confusion over whether the automaker had divested its holdings of the coin.

China’s announcement on Tuesday to ban financial institutions and payment companies from providing services related to cryptocurrency transactions exacerbated sales.

China also warned investors against speculative cryptocurrency trading.

“Cryptocurrency markets are currently processing a cascade of news fueling the bearish argument for price development,” said Ulrik Lykke, CEO of crypto hedge fund ARK36.

“News like this can generate a lot of traction and easily shake market sentiment, but it is often of little consequence in the long run,” he added.

(Additional reporting by Stanley White and Hideyuki Sano in Tokyo; Edited by Kim Coghill and Emelia Sithole-Matarise, edited in Spanish by Gabriela Donoso)

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