Bitcoin slides below $40,000 after China curbs

Bitcoin's volatile week continued on Wednesday (May 19).

It tumbled below the $40,000 mark to hit a 3 1/2 month low, before recovering some ground.

The drop came after China said on Tuesday (May 18) that it's banning financial institutions and payment companies from providing services related to cryptocurrency transactions.

As the biggest and best-known virtual money, bitcoin had already been under pressure from a series of tweets from Tesla boss Elon Musk.

But the news from China sent it as low as $38,514 - a 9% fall.

That took the coin down around 40% from a record high hit last month.

It is also heading for its first monthly decline since November 2018.

Rival cryptocurrencies Ether and Dogecoin also fell Wednesday.

The crypto declines were sparked last week by Musk's reversal on Tesla accepting bitcoin as payment.

His subsequent tweets caused further confusion over whether the carmaker had shed its holdings of the coin.

Analysts at JPMorgan said that investors may be shifting from bitcoin back to gold in what they called the steepest liquidation in bitcoin futures since last October.

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