The price of Bitcoin fell as much as 29% Wednesday after the China Banking Association warned member banks of risks associated with digital currencies. Other digital currencies suffered sharp declines as well.
Bitcoin’swas on full display: The decline had narrowed to below 10% in early afternoon trading. Bitcoin has lost about 40% of its value since April 13 when it hit a high of more than $64,606 per coin.
Before Wednesday, Tesla’s decision tofor cars, along with concerns about tighter regulation of digital currencies, were major factors in the decline. The price is still up about 31% in 2021 and nearly 300% from a year ago.
Here’s a look at Bitcoin and digital currencies in general:
What happened to the price?
On Wednesday, a statement posted on the Chinese Banking Association’s website said financial institutions should “resolutely refrain” from providing services using digital currencies because of their volatility.
Virtually every cryptocurrency fell after the industry group’s statement. Bitcoin slumped to $30,202 before recovering to $38,038, down 12% on the day, according to Coindesk. Most cryptocurrencies lost between 7% and 22% of their value and shares of Coinbase dropped 5.4%.