An already down day for bitcoin turned into a rout Wednesday evening, with the leading cryptocurrency dropping to its lowest point in almost three weeks after Tesla CEO Elon Musk said the electric-car company will discontinue accepting bitcoin as a form of payment due to environmental concerns.
Musk’s about-face on bitcoin put to flight a market already in a nervous mood. And bitcoin wasn’t the only crypto affected – a screen showing the top 15 cryptos by market cap showed not a speck of green.
The decision by Tesla removes a psychological support for the original cryptocurrency. On Feb. 8, the price of bitcoin soared by more than 14% after Tesla said it had put $1.5 billion of its treasury funds into the cryptocurrency and that it would soon accept the crypto as payment, a promise it kept.
Tesla’s addition of bitcoin to its balance sheet also set off a guessing game of which major company would be the next to do so. While Musk’s tweet today said Tesla won’t be selling any of its bitcoin, it’s likely safe to say it won’t be buying more anytime soon, and other companies that may have been tempted to add bitcoin to their balance sheets may now have second thoughts as well.
At around 01:00 UTC on Thursday (9 p.m. ET Wednesday), bitcoin’s price fell from $54,800 to a low of $46,294, according to CoinDesk 20 data. Prices have since rebounded slightly and are currently changing hands for around $48,500.
April 25 marks the last time bitcoin fell below the $50,000 psychological support level. It did not remain below for very long because prices shot back up 15% the following day to around $54,000.
Hourly sell volume has also shot up to its highest point in over two days to levels not seen since May 10, Bitstamp exchange data shows.
Bitcoin’s volatile price action has also affected orders on Coinbase Pro, which has been experiencing intermittent outages and delays to its service. CoinDesk attempted to access the exchange’s native mobile app and webpage but was met with the following error message.
CoinDesk attempted to contact Coinbase but did not receive a reply by press time.
Other notable cryptocurrencies in the top 10 weighted by market cap also fell in dramatic fashion alongside bitcoin, with ether, dogecoin and polkadot suffering the most and falling between 8% and 12%.
Meanwhile, cryptocurrency-related equities also fell across the board, with Coinbase Global Inc (COIN) down 4.8% in post-market trading. Shares of Michael Saylor’s MicroStrategy (MSTR) fell 9.2% and those of Riot Blockchain (RIOT) tumbled 17%.