Cryptocurrency Market Sees a Massive Dip as Bitcoin, Dogecoin Price Fall Sharply on China Ban, Musk Tweets

Bitcoin, Dogecoin prices along with that of other popular cryptocurrencies such as Ether, Matic, and Binance Coin fell sharply on Wednesday (May 19), leading to a trading rush that Indian exchanges struggled to manage. Bitcoin, the largest and the most popular cryptocurrency in the world with a market cap of over $1 trillion (roughly Rs. 73,00,000 crore), was trading dangerously close to $30,000 (roughly Rs. 22 lakh) at around 7pm IST on Wednesday — a 21 percent dip — before showing a quick recovery, according to data from Binance, a global cryptocurrency exchange that also operates WazirX in India. Dogecoin price saw a more dramatic fall and dipped to as low as $0.26 (approximately Rs. 19) and has only managed a partial recovery so far.

The overall cryptocurrency market was down close to 10 percent, as per Coinbase data from the last 24 hours refreshed at 12:30pm IST today. While Bitcoin (price in India) swiftly scaled back to trading at nearly $40,000 (roughly Rs. 29 lakh) — recovering from the 24-hour dip entirely, thanks in part to Elon Musk's tweet last evening that hinted Tesla was holding on to its stash — Dogecoin (price in India) was down 11 percent, trading at $0.35 (roughly Rs. 26), as per the latest data. The trading volumes of the last 24 hours on Coinbase also show Ether (price in India), the second-largest cryptocurrency after Bitcoin, was trading 9 percent lower at $2,700 (approximately Rs. 1,96,576), Binance Coin (BNB) trading 15 percent lower at $356 (roughly Rs. 26,000), and Ripple (price in India) trading 19 percent lower at $364 (roughly Rs. 26,600).

The most recent development that is said to have influenced the cryptocurrency market dip is China announcing a ban on cryptocurrency trading. The blanket ban bars banks and other online payment platforms from offering any services related to cryptocurrencies in the country. China has banned crypto exchanges but has not yet barred individuals from holding digital assets.

This comes close at the heels of cryptocurrency backers, including ‘Dogefather' Musk, raising concerns about the environmental impact of cryptocurrency mining. In a recent U-turn that had a major impact on Bitcoin and Ether prices, he announced that Tesla would no longer accept Bitcoin as payment for Tesla cars till a solution was found to the massive energy required for its mining. And though he recently said that he was working with Dogecoin developers to improve the transaction efficiency of its mining (also called digging, because dogs don't mine they dig), the recent slump in the cryptocurrency market spared no major digital asset, including Ripple (XPR), whose mining requires far less energy compared to Bitcoin and Ether.

Market watchers and cryptocurrency backers are suggesting that the recent dip is more a healthy market correction than a crash. India cryptocurrency exchange WazirX Co-Founder Siddharth Menon also tweeted on Wednesday amid the falling crypto prices that a market correction was a good thing. Irrespective, Bitcoin, that has been backed by many including Twitter CEO Jack Dorsey is down approximately 40 percent from its all-time high of $64,804 (roughly Rs. 47.4 lakh) in April this year.