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.
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.