Bitcoin, the largest cryptocurrency by market cap, plunged to an intraday low of $32,418 at 2:52 a.m. UTC on the Bitstamp exchange.
The flagship coin is struggling to recover after posting its third-biggest monthly loss ever in May.
The most recent drop came after U.S. investigators seized $2.3 million in Bitcoin paid to the Colonial Pipeline hackers, which made some question the cryptocurrency’s technology.
Justin Wolfers, a professor of economics and public policy at the University of Michigan, writes that the news has further reduced the number of Bitcoin’s use cases:
News that the government has figured out how to snatch bitcoin from the online wallets of cybercriminals surely reduces the use cases for Bitcoin even further.
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However, Alex Thorn, head of firmwide research at Galaxy Digital, claims that the ill-gotten funds flowed to a trading desk or a cryptocurrency exchange that was willing to comply with a criminal seizure warrant. This means that there is no evidence of Bitcoin having a security vulnerability.
Former President Donald Trump calling Bitcoin “a scam” in a June 7 Fox Business interview could be another possible headwind for the flagship cryptocurrency.
"It’s a long way down"
In a scathing tweet, gold bug Peter Schiff states that Bitcoin will continue its collapse if it fails to make a new high, ultimately dropping below $10,000.
Bitcoin plunged to $30,000 on May 19 and then made a higher low of $31,144 on May 23 before seeing a short-lived relief rally to $40,992.
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Dan Burgin
Vladislav Sopov
U.Today Editorial Team