Bitcoin Price Plummets to 3-Month Low Amid Market Volatility

Bitcoin has fallen to a three-month low following a promising surge in value that created a number of opportunities for its investors.

Dropping more than 9% on Monday to just under £30,000, the cryptocurrency is at its lowest point since 9 February, Reuters reported. However, it then regained some of its traction, rising to £32,000 on Monday morning.

Similar fluctuations were also seen in other popular digital currencies such as Ethereum and Dogecoin, with the latter falling by 7%. 

The drop of all three cryptocurrencies has caused even the most confident traders to become anxious, Reuters found, with one of its most high-profile champions, Elon Musk, taking to Twitter to state that the company had “not sold any Bitcoin”.

The clarification came after a Twitter exchange between the Tesla and SpaceX CEO and Twitter account @CryptoWhale. The latter suggested that Tesla had “dumped the rest of their #Bitcoin holdings”, with Musk replying "Indeed". However, at the time, Musk didn’t clarify whether he was agreeing with @CryptoWhale’s or the account’s comment about Musk facing online criticism. 

Musk’s business decisions have been seen as catalysts for the ongoing fluctuation of Bitcoin's value. The move recent slump comes days after Musk announced that his electric car company would no longer allow customers to purchase vehicles using the digital cryptocurrency due to concerns about the increasing use of fossil fuels for Bitcoin mining.

According to research conducted by the University of Cambridge, Bitcoin was found to consume an estimated 148 Terawatt hours (TWh), increasing almost four-fold since 2017. Commenting on the decision, Musk said that “cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at a great cost to the environment”. The statement caused Bitcoin to fall £5,000 overnight.

Although Bitcoin is still far from its lowest point of this year, the news comes days after it was revealed that the world’s largest cryptocurrency exchange, Binance, was under investigation by the US Department of Justice (DoJ) and IRS due to allegations of money laundering and tax violations.