Cryptocurrency Bitcoin on May 19 declined almost 30 percent to $31,000, wiping out more than $500 billion in value from the coin’s peak market value.
According to reports, another cryptocurrency Ethereum also tanked more than 40 percent.
Earlier in the day, the world's biggest and best-known cryptocurrency -- Bitcoin -- fell about 9 percent to as low as $38,940.04 and slipped below a key 200-day moving average.
The other coin linked to the ethereum blockchain network Ether dropped about 15 percent to $2,875.36, reported news agency Reuters.
Bitcoin drops below $40,000 – All you need to know about how and why
The decline in the two most traded cryptocurrencies was sparked last week by Elon Musk's reversal on Tesla taking bitcoin as payment, followed by other tweets that caused confusion over whether the carmaker had shed its holdings of the currency.
Apart from this, China's announcement on Tuesday that it is banning financial institutions and payment companies from providing services related to cryptocurrency transactions, coupled with a warning to investors against speculative crypto trading, seemed to have exacerbated the selling.
What lies ahead of the meteoric rise of cryptocurrency?
In another news, the largest US cryptocurrency exchange Coinbase Global Inc. posted its biggest decline on record May 19 and fell as much as 13 percent to a record low of $208 amid a broader rout in cryptocurrencies, reported Bloomberg.
The cryptocurrency exchange also said that it was investigating 'intermittent downtime' on its platform. Meanwhile, the world’s biggest cryptocurrency exchange Binance temporarily disabled Ethereum withdrawals citing network congestion.
On May 19, European stock markets sank on soaring inflation numbers, while bitcoin took another tumble after China's central bank said cryptocurrencies cannot be used for payments.
In another development, cryptocurrency Ethereum co-founder Vitalik Buterin recently made an announcement of burning 90 percent of his Shiba Inu holdings and donating the rest, following which the investors of crypto coin are in a dilemma. Meanwhile, Buterin had said that burning and donating the coins was the only option.
Explained | Ethereum co-founder Vitalik Buterin destroys 90% of his Shiba Inu holdings; here's what it means
Earlier, Buterin was given 50 percent of all Shiba Inu tokens by the coin's creators. Regarding his decision to burn the digital currency, Buterin had cited that this was the only method through which he could avoid his transactions in Shiba Inu being interpreted as actions.