The energy used to mine cryptocurrencies is comparable to that of many developed countries.
Bitcoin’s decline amid a crypto crackdown from China has pushed it below $30,000 for the first time since January, nearly pulverizing its entire 2021 gain.
The original cryptocurrency has lost more than 50% from its mid-April high of almost $65,000, leaving it up marginally for the year. That compares with a 12% gain for the S&P 500 since the end of December. The coin started 2021 trading around $29,000 following a fourfold increase in 2020.
“Any meaningful break below $30,000 is going to make a lot of momentum players to throw in the towel,” said Matt Maley, chief market strategist for Miller Tabak + Co. “Therefore, even if Bitcoin is going to change the world over the long-term, it does not mean it cannot fall back into the teens over the short-term.”
Bitcoin dropped as much as 10% to $29,333 on Tuesday, just above last year’s closing price of $28,997. Other cryptocurrencies were hit harder, with Dash tumbling 22%, XRP falling 21% and Litecoin stumbling 18%. Among more volatile DeFi tokens, Prude was down 68% and Manyswap tumbled 60%, according to data on CoinMarketCap.com.
Chart-watchers said Bitcoin, which failed to retake $40,000 last week, could have a tough time finding support in the $20,000 range following its drop below $30,000. Still, Bitcoin had prior to Tuesday breached $30,000 during at least five separate instances this year but recuperated to trade above that level each time.
It’s a remarkable comedown for the digital asset which just weeks ago was trekking higher amid a warmer embrace from Wall Street as well as retail investors. But negative press about its energy use, brought on largely by Tesla Inc.’s Elon Musk, as well as a clampdown from China have pushed it lower in recent weeks.
The $30,000 support level had held steady during a selloff last month that saw it wipe out roughly 35% for the month of May.
Read More: Crypto-Linked Stocks Sink as Bitcoin Plunges to Five-Month Low
–With assistance from Kenneth Sexton.