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20 May 2021

FT: Bitcoin gyrates on fears of regulatory crackdown

Digital asset market under intense pressure after China warns on use of cryptocurrencies.Cryptocurrency markets swung in chaotic trading and related stocks were hit after Chinese regulators signalled a crackdown on the use of digital coins, which have soared in price this year.

Bitcoin tumbled as much as 30 per cent to a low of $30,101, before clawing back its losses to less than 8 per cent. Other digital coins were also hit by heavy selling, with ethereum, one of the best-performing cryptocurrencies in the past month, losing a quarter of its value before moderating to losses a little over 20 per cent. More than $8.6bn of positions have been liquidated over the past 24 hours, according to data from, a cryptocurrency data provider.

The sharp moves came after the People’s Bank of China warned financial institutions about accepting cryptocurrencies as payment or offering related services and products, amplifying investor concerns that regulators could tighten oversight of the freewheeling asset class. We go through soul-searching times like this and scrape the models and, yes, our conviction is just as high Cathie Wood, Ark Invest Elon Musk, Tesla’s chief executive and an outspoken cryptocurrency enthusiast, last week reversed course on accepting bitcoin as payment for the company’s electric cars on environmental grounds, also sharpening worries about the long-term future of the asset class.

In a tweet on Wednesday, Musk indicated Tesla was holding bitcoin for the long term and would not be selling its position. Cathie Wood, founder of Ark Invest, a fund manager that has invested heavily in cryptocurrency-related companies, also reiterated her support for bitcoin. “We go through soul-searching times like this and scrape the models and, yes, our conviction is just as high,” she told Bloomberg Television....

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