Bitcoin Price Plunges By 50% From Its 2021 High Of $64,000

Bitcoin prices fell by 13% Sunday following a sell-off that saw it plunge by nearly 50% from its 2021 high.

Bitcoin fell to $32,601 by 2 p.m. ET, losing nearly $4,900 from its previous close. The drop came after the cryptocurrency hit a record high this year of $64,895.22 on April 14.

"Many point to bitcoin's volatility as untenable," RBC Capital Market’s Amy Wu Silverman wrote in a research note published Saturday. "Indeed, Bitcoin makes severe and dizzying swings."

Bitcoin had been gaining traction among Wall Street banks before it faced a series of negative headlines this month.

On May 12, Tesla CEO Elon Musk tweeted that his company will stop accepting Bitcoin payments for purchases of its electric vehicles because of the cryptocurrency’s impact on fossil fuels.

“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk tweeted. “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.”

Musk noted that Tesla will not sell Bitcoins and announced plans to look into other cryptocurrencies.

“To clarify speculation, Tesla has not sold any Bitcoin,” he said in a later tweet.

Musk’s announcement came two months after he announced that Tesla would begin accepting Bitcoin payments. The price of the cryptocurrency dropped as low as 4.92% less than an hour after the announcement.

In addition to Musk’s announcement, Vice Premier Liu He, China’s Financial Stability and Development Committee, on Friday imposed a crackdown on mining and trading of Bitcoin as part of an effort to prevent financial risks.

In a statement, Chinese officials claim the crackdown was necessary to “resolutely prevent the transmission of individual risks to the social field.”

Bitcoin’s price plunged by 8.5% after the news circulated. Other cryptocurrencies, including Etherium and Dogecoin, also slid by more than 11%.

China’s crackdown came days after the U.S. Treasury called for stricter cryptocurrency compliance and announced steps it is taking to prevent people from conducting “illegal activity broadly including tax evasion” using Bitcoin.