Bitcoin Registers Worst Monthly Losses Since 2011

Although Bitcoin registered some gains on Tuesday, it still recorded its worst monthly losses since 2011.

The world’s largest cryptocurrency in terms of market capitalization plunged by around 37.8% in May, marking its second-worst losses since a 40% drop in September 2011.

The decline is close to that of November 2018, which amounted to around 37%.

Bitcoin was negatively impacted by increasing selling pressures, which resulted from a crackdown on the digital currency in China, as well as mixed signals by billionaire investor Elon Musk.

The Chinese Vice Premier, Liu He, announced plans by the government to crack down on Bitcoin’s mining and trading activities.

The Chinese Financial Stability and Development Committee, chaired by Liu He, revealed measurements against the largest cryptocurrency in the world that come as part of wider efforts with the aim of limiting financial risks.

Bitcoin was hit hard by the decision of Tesla, led by Musk, to no longer accept Bitcoin as a payment method for the company’s famous products and electric cars, prompting a decline to the cryptocurrency’s worst level in about three months.

The decision came due to criticism that a company like Tesla that is producing environmentally-friendly products should not be investing as much as $1.5 billion in Bitcoin. Especially at a time when mining the cryptocurrency is consuming huge energy sources most of which continue to come from fossil fuel, making Bitcoin’s carbon footprint a huge burden on the efforts to combat climate change.

This also led to worries that Tesla might be giving up its huge investments in the digital currency, which led to increased institutional inflows into crypto in the first place. Nonetheless, Musk denied through Twitter that Tesla has sold any Bitcoin.

In addition, an appearance on New York’s Saturday Night Live (SNL) comedy show on NBC saw Musk once again supporting Dogecoin, a digital currency that started as a joke based on an internet meme but has recently attracted investments, mostly due to interest from Musk. However, Musk jokingly approved a description of Dogecoin as being a hustle.

Surely this has led to acquisitions that the famous billionaire might be manipulating the market in favor of his investments and those of his company.

Recent media reports indicated that over a period of six months, scammers have collected more than $80 million from people who were seeking investments in cryptocurrencies.

Scammers specifically impersonating Musk on social media cheated retail investors out of more than $2 million, after promises to increase Bitcoins sent to their wallets, according to the U.S. Federal Trade Commission.

More than 7,000 people have reported being subject to fraud in the cryptocurrency domain, with a median loss of $1,900.

In addition, as the United States Federal Reserve could soon begin to discuss curbing its stimulus measures, concerns that fiscal support and relief packages, which are believed to have spurred retail interest in Bitcoin, also took a hit.

After relative stability in its performance over the first 11-12 days of the month, Bitcoin fell from the $58,000 range to near $30,000 in a matter of days.