Bitcoin Price Crashes After China Warns to Block Cryptocurrencies

Bitcoin is now down more than 50 percent from its record level of $65,000 posted in April. Image used for representation. 

(Photo: iStock)

Bitcoin prices tumbled below $40,000 on Wednesday, 18 May, after People's Bank of China warned of banning crypto assets and using digital coins as a mode of payment.

The most popular crypto currency, Bitcoin, is now down more than 50 percent from its record level of $65,000 posted in April.

Since February, Bitcoin hasn't traded below the $40,000 level and is roughly 40 percent below a mid-April record high of $64,829.

Meanwhile, Ethereum dropped by 17 percent to $2,848, just before the crypto currency soared to a record high above $4,000.

Jeffrey Halley, senior market analyst at Oanda, in a note to clients told MarketWatch , "Late yesterday (Wednesday) in Asia, the PBOC issued a warning about a rebound in speculation in virtual currencies. China announced that financial and payment institutions are banned from pricing or conducting business in virtual currencies."

The People's Bank of China had warned Chinese nationals that virtual currencies can't be used as a form of payment because they 'aren't real currencies'.

Several experts claim that China is paving a way to create its own digital currency.

Bitcoin also tumbled earlier this week, on speculation that billionaire and SpaceX owner Elon Musk halted sales of cars using the cryptocurrency, owing to environmental worries.

(With inputs from IANS)