Bitcoin took a big hit after China declared a crackdown on cryptocurrency.
The world’s most sought after cryptocurrency plunged to 30,202 per coin but has sinced bounced up to 41,000.
The drop comes after regulators from China announced a series of bans regarding cryptocurrency which include prohibiting banks and payment companies from providing cryptocurrency services.
One regulator who represents the interests of the Bank of China said the bans have been put in place because “prices of cryptocurrency have skyrocketed and plummeted recently, and speculative trading has bounced back. This seriously harms the safety of people’s property and disturbs normal economic and financial orders”.
Many believe the crackdown is being used to promote China’s digital yuan project and to sow seeds of distrust in any other currency.
China Bans Its Banks and Payment Companies From Providing Cryptocurrency-Related Services https://t.co/7kxStv9a79
— Entrepreneur (@Entrepreneur) May 19, 2021
China has banned its finance firms from servicing cryptocurrency transactions, causing Bitcoin, Dogecoin and others to decrease in value 📉 pic.twitter.com/OcAFbeGyUK
— HYPEBEAST (@HYPEBEAST) May 19, 2021
CNN covered the story, check out what they reported:
Bitcoin and other cryptocurrencies are plunging as anxiety spreads through the market — this time, after China took more steps to crack down on the digital coins.
The world’s most heavily traded cryptocurrency plunged as low as $30,202 per coin early Wednesday after starting the day around the $40,000 mark, according to data from Coindesk.
Bitcoin then recovered slightly but was still down more than 10% at around $38,700 per coin around the time of the New York stock market close.
“The Chinese position on cryptocurrencies is clear from the beginning: trading and usage of cryptocurrencies are simply forbidden,” wrote Ipek Ozkardeskaya, senior analyst at Swissquote, in a Wednesday research note. “Therefore, the news is nothing ‘new’, but given that crypto traders are too sensitive to negative news nowadays, it adds to the downside pressure on cryptocurrencies.”
Bitcoin falls sharply after China signals crypto crackdown https://t.co/80VJ00Tb0N
— Financial Times (@FT) May 19, 2021
The Financial Times didn’t stay behind and got the scoop too:
Cryptocurrency markets swung in chaotic trading and related stocks were hit after Chinese regulators signalled a crackdown on the use of digital coins, which have soared in price this year.
Bitcoin tumbled as much as 30 per cent to a low of $30,101, before clawing back its losses to less than 8 per cent.
Other digital coins were also hit by heavy selling, with ethereum, one of the best-performing cryptocurrencies in the past month, losing a quarter of its value before moderating to losses a little over 20 per cent. More than $8.6bn of positions have been liquidated over the past 24 hours, according to data from bybt.com, a cryptocurrency data provider.
The  sharp moves came after the People’s Bank of China warned financial institutions about accepting cryptocurrencies as payment or offering related services and products, amplifying investor concerns that regulators could tighten oversight of the freewheeling asset class.
Bitcoin falls almost 30% after China crackdown https://t.co/pVXP7XgZS8
— The Guardian (@guardian) May 19, 2021
It looks like Elon Musk is not the only one who is able to turn the crypto market into a frenzy, this month has showed us China is able to do it too.
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