The price of bitcoin rallied on Wednesday as the world’s largest cryptocurrency managed to regain some of its earlier losses.

On Tuesday bitcoin fell below $30,000 and at one point was trading below its 30 December 2020 value of $28,990, wiping out all gains made during 2021.

The coin has risen 3.14% in the last 24 hours, however, with Coinmarketcap showing its value nearing the $34,000 mark.

China's bitcoin crackdown

Bitcoin has fallen by over 50% from its record high of almost $65,000 in April. As reported by Reuters, the latest selloff followed a Chinese government's crackdown that closed bitcoin mining projects in the southwest province of Sichuan.

Global Times, the Chinese state-controlled tabloid, said that the ban represented a 90% shutdown of China’s bitcoin mining capacity.

Mike Hampson, founder & CEO of Bishopsgate Financial, spoke exclusively to Currency.com saying that the dramatic fall and rise of bitcoin was further evidence of the volatility of non-central bank digital currencies (CBDCs) volatility.

He said: "The huge energy cost involved in mining and processing each bitcoin transaction, in particular, means that there is nothing cheap or efficient about the crypto and with concerns rising about climate impact this will only become a bigger problem’.

"With the volatility, lack of intrinsic value, climate-unfriendly credentials and general lack of regulatory acceptance, I cannot see the non-CBDCs being anything other than a bubble."

Further reading: Cryptocurrency sell-off continues

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