Cryptocurrency markets plunged on Wednesday after Chinese regulators signaled a crackdown on the use of digital currencies.
The decision to crackdown on cryptocurrency by China has sent Bitcoin, the biggest cryptocurrency further down at $38,193, losing 11 percent on Wednesday. It is down more than 30 per cent in a week.
Bitcoin had already been under pressure from a series of tweets from Elon Musk, Tesla Chief Executive Officer.
Musk had announced that Tesla will no longer accept Bitcoin as a form of transaction.
“Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.
“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.
“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction,” Musk had tweeted.
Ether, the coin linked to the Ethereum blockchain network, also dropped to $1,850, its weakest level since late January.
It was last down 26 per cent at $2,497, since hitting a record high on May 12, Ether has plummeted 57per cent.
The recent sell off has sent market capitalisation of all cryptocurrencies to $1.7 trillion, down from the $2.5 trillion record hit earlier this month.