Bitcoin and ethereum recorded their biggest one-day plunge since last March on Wednesday, May 19,  with the cryptocurrency market capitalization losing nearly $1 trillion.

Cryptocurrency prices plummeted as China restricted financial and payment organizations from providing bitcoin services, according to Reuters.

Bitcoin fell to $30,066, its lowest level since late January, when trading at $33,502, down 22%. The most popular cryptocurrency has lost the most in a single day since March 2020.

Ethereum also dropped to $1,850, its lowest level since late January, when trading at $2,439, down 28%. The one-day losses in ethereum were the biggest since last March.

Bitcoin and other cryptocurrencies plummeted as market uncertainty spread following China’s latest crackdown on digital currencies.

As a result of the selloff, cryptocurrency trading platforms Coinbase and Coindesk encountered problems.

Bitcoin was already on the decline earlier this month when Tesla CEO Elon Musk expressed concern about its environmental impact. However, a new declaration from a Chinese financial and banking regulators group appears to have stunned cryptocurrency markets even more.

On Tuesday, May 18, the Chinese regulators stated that financial institutions and payment providers should not engage in bitcoin transactions or provide cryptocurrency-related services to their customers.

“Prices of cryptocurrency have skyrocketed and plummeted recently, and speculative trading has bounced back. This seriously harms the safety of people’s property and disturbs normal economic and financial orders,” the regulators supervised by the People’s Bank of China and the China Insurance and Banking Commission said in a statement.

China’s skepticism of Bitcoin dates back many years. While the country does not outright ban cryptos, the regulators proclaimed bitcoin to be a fake currency in 2013 and prohibited financial and payment institutions from trading with it. They highlighted the possibility of bitcoin being used for money laundering at the time, as well as the necessity to “maintain financial stability” and “protect the yuan’s status as a fiat currency.”

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