Bitcoin tumbles 10% in wake of deepening China crackdown

0
124
imageForex8 hours ago (Jun 21, 2021 14:56)

2/2
© Reuters. A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken June 14, 2021. REUTERS/Edgar Su/Illustration

2/2

By Tom Wilson and Kevin Buckland

LONDON/TOKYO (Reuters) – Bitcoin tumbled almost 10% on Monday as recent volatility in the cryptocurrency market showed no signs of dampening down, with market players citing jitters over China’s expanding crackdown on bitcoin mining in thin liquidity for the losses.

Bitcoin fell as low as $32,094 to its lowest in 12 days, dragging smaller coins down. It was last down 8.3%, on course for its biggest daily drop in a month.

The world’s biggest cryptocurrency, long plagued by volatility, has lost over 20% in the last six days alone and is down by half from its April peak of almost $65,000. Still, it has still gained over 10% this year.

The drop comes amid a growing crackdown on cryptocurrencies in China, where authorities in the southwest province of Sichuan on Friday ordered bitcoin mining projects to close.

The State Council, China’s cabinet, last month vowed to clamp down on mining and trading as part of a series of measures to control financial risks.

Data on mining is scarce. Yet production of bitcoin in China accounted last year for about 65% of global production, according to data from the University of Cambridge, with Sichuan its second-biggest producer.

Companies that mine bitcoin – an energy-intensive process – typically hold large inventories of the cryptocurrency, with any moves to sell large amounts depressing prices.

“(The) crackdown on Chinese miners might mean that they are offloading coin into a thin market and taking us lower,” said Ben Sebley of London-based crypto firm BCB Group.

China’s central bank said on Monday it had summoned some banks and payment institutions recently, urging them to crack down harder on cryptocurrency trading.

Agricultural Bank of China (AgBank), China’s third-largest lender by assets, said separately it was following the People’s Bank of China’s guidance and would conduct due diligence on clients to root out illegal activities involving crypto mining and transactions.

Smaller rival ether, which tends to move in tandem with bitcoin, dropped as much as 12%, falling below $2,000 for the first time in almost a month.

Bitcoin tumbles 10% in wake of deepening China crackdown

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

LEAVE A REPLY

Please enter your comment!
Please enter your name here