Ethereum has seen prices crash to massive lows on Wednesday (May 19), in a week where cryptocurrencies were already struggling to maintain momentum. Etherum has seen losses of more than six percent in the past 24 hours, while Bitcoin, Dogecoin and Cardano have dropped between 0 and six percent.
Ethereum tumbled in price alongside many other cryptocurrencies on Wednesday, continuing the downward trend seen this week.
Prices plunged for the digital coins on Wednesday after China announced new measures to block cryptocurrencies from being used as payment in the country.
Under the ban, financial institutions and payment companies must not offer clients any service involving cryptocurrencies, such as registration, trading, clearing and settlement.
Three industry bodies, the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China, issued a statement warning against these transactions.
The statement read: “Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order.”
READ MORE: Will crypto recover? bitcoin, Ethereum and Dogecoin down a third
Why is Ethereum crashing?
Trading platforms are beginning to struggle as cryptocurrencies suffer across the board – reaching their lowest values since the beginning of the year.
Website health monitor DownDetector recorded issues with Binance, Coinbase, Gemini and KuCoun, while online banking apps like Revolut also seem to be hit by the outage.
Many digital coin holders have complained about being unable to “cash-out”, while others have shown disappointment about being unable to “buy the dip”.
The current downward turn is believed to be due to the crackdown from China.
China has warned financial firms to stop servicing cryptocurrencies prompting fears of an outright ban which could be catastrophic for many cryptocurrency holders in the country.
The value of more than 7,000 cyrptocurrencies tracked by CoinGecko has fallen by more than $600bn in the past week to $1.9 trillion, Bloomberg reported.
Mr Musk also commented on the climate impact of cryptocurrency which has had a dampening effect on the market.
He said: “We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal.”