Late trading on Saturday saw the price of Bitcoin drop by as much as 15 percent. This drop represents the biggest drawback in price since February. The dramatic drop came just a matter of days after hitting new highs.
Analysts and investors are unsure of what caused the weekend sell-off. Ray Dalio, billionaire investor and founder of Bridgewater, believes that a ban placed on cryptocurrencies by the Turkish governments dampened the mood of the market.
Other analysts believe that the dramatic plunge in the price of the popular crypto may have reflected reports that the U.S. treasury may commence an action against money laundering using popular digital assets.
There is also concern that Turkey’s decision to ban crypto as of April 30 will set a precedent for other countries as they attempt to protect their domestic currency. It is anticipated that India will ban crypto, and Morocco has already done so.
Insight reported by Reuters hints that the sell-off can be blamed on a power blackout in the Xinjiang region of China, an area reportedly responsible for powering a great deal of Bitcoin mining.
Bitcoin Price Tumbles
Within a 24-hour period late in the week, bitcoin shed eight percent of its value. CoinGecko, a market data site reported a fall from slightly over $60,800 to under $53,000. Late Saturday, Bitcoin fell over $7,000 in one hour, hitting a low of $52,810.
On Wednesday, the price of Bitcoin was over $64, 895. At one point over the weekend, the price dropped by almost 20 percent.
However, despite the rapid decline, Bitcoin is still valued at more than $1 trillion. This value is based on a price surge approaching 700 percent over the last full year.
Other Cryptocurrencies Also Fell
It is not just Bitcoin that took a hit. Other cryptocurrencies also saw sharp declines over the weekend with Ether, the second-largest crypto, falling seven percent.
Bitcoin prices topped $64,000 during last week when Coinbase, the largest crypto exchange in the United States, made its debut on Nasdaq. The rapid rise in crypto prices, especially Bitcoin, is worrisome to some traders who see the possibility of a bubble in the market. Bitcoin has more than doubled in price since the start of the year.
The greatest majority of respondents, a full 74 percent, surveyed by Bank of America fund managers believe the popular crypto is in a bubble. Bitcoin prices have been extremely volatile. In late 2017, Bitcoin rose to almost $20,000. By the following year, the price had crashed to almost $3,000.
Dogecoin on the other hand was hitting new record highs, soaring more than 400 percent during the week and up over 5,000 percent since early January. Over the weekend, Dogecoin went from a high of 44 cents to a low of 24 cents on Saturday. The crypto has since recovered and is currently trading at almost 32 cents.
Bitcoin Under Pressure
In recent days, Bitcoin has been under pressure, falling more than four percent on Friday on news that the central bank in Turkey is banning the use of crypto from the end of the month. India is preparing to propose a law that bans cryptocurrencies. The penalty for holding crypto will result in a fine.
There is no doubt that more and more companies are beginning to accept crypto as an official payment option for goods and services, despite concerns about volatility.
Tesla CEO Elon Musk has said Tesla will accept Bitcoin as payment for all models sold in the U.S. Paypal, the largest online payments company has also begun accepting Bitcoin as payment.