Bitcoin has now lost all of the gains accrued since Tesla announced that it had invested $1.5 billion into the cryptocurrency.
The crypto market’s woes deepened further on Wednesday, with Bitcoin’s price falling below $40,000 for the first time since February.
Lex Moskovski, the chief investment officer at Moskovski Capital, pointed to charts suggesting that, on average, most investors are now selling at a loss.
In an earlier tweet late on Tuesday evening, he said that 22,917 BTC was deposited to exchanges in a single hourly period — a sign people are preparing to offload. He wrote:
“This hourly inflow is rivaled only by the March 2020 crash. People are scared.”
What remains to be seen is whether predictions from CNBC’s Carter Worth end up being correct. He previously stated his belief that BTC could tumble 55% from recent all-time highs of $65,000, taking the cryptocurrency down to $29,000.
Other factors in the dramatic decline include the People’s Bank of China warning that the likes of Bitcoin cannot be used for payments because they are not “real currencies.” This comes as Beijing continues to add the finishing touches to the digital yuan.