Crypto markets erase $ 150 billion in value within hours of China’s latest ‘Bitcoin ban’.

[ad_1]

Top line

In another testament to the extreme volatility of the emerging market, cryptocurrency prices fell on Friday morning after China’s central bank reiterated a sweeping ban on digital asset transactions, prompting some experts to warn that the rhetoric lasts. could encourage more countries to take similar action while others pointed out prices have quickly recovered from such announcements in the past.

The plunge has wiped out virtually all gains since a massive selloff on Monday triggered the crypto market slump. [+] worst drop in weeks.

Getty Highlights

The value of global cryptocurrencies hit a low of around $ 1.8 trillion at 7.15 a.m. EDT on Friday, falling about 9% and losing $ 188 billion in market value in just three hours after the announcement of China, according to crypto data website CoinMarketCap.

The sharp plunge wiped out virtually all gains since a global stock sell-off on Monday triggered the crypto market’s worst drop in weeks, with major Solana’s bitcoin, ether and sol cryptocurrencies falling between 6% and 10% each Friday morning.

In a Friday memo, Vital Knowledge Media analyst Adam Crisafulli noted that China’s announcement is “very consistent with its past rhetoric,” but still cautioned investors against buying at prices. current because it is likely that Beijing’s measures could be adopted by other countries, with India among the largest economies expressing hesitation towards cryptocurrencies.

Meanwhile, Freddie Williams, digital asset broker GlobalBlock, said he saw “little gut reaction from clients” after the latest ban, adding that the market could rebound once the temporary fear subsides, as he did after Monday. decline.

Williams further noted that China had reiterated its so-called “bitcoin ban” several times over the years (most recently in May), but still had not stopped institutions, especially United States, to boost cryptocurrency adoption at an astounding rate.

Crypto investor Mike Novogratz, an avid bitcoin bull, also weighed in on Twitter, saying the world’s largest cryptocurrency could continue its struggle to cross a price of $ 45,000 again, but that “history secular is stronger than ever ”.

Key context

Starting in late 2017, a wave of early regulatory action triggered an almost 80% collapse in cryptocurrency prices and a bear market that lasted for several years. At the time, many countries, like South Korea, started cracking down on initial coin offerings, the then booming crowdfunding technique used to raise funds by minting new cryptocurrencies. In the same year, China announced its sweeping ban on cryptocurrency transactions, claiming that financial institutions were prohibited from directly or indirectly providing trading, settlement or insurance services for virtual currency businesses, repeated measures. in the government announcement on Friday. Officials also reissued the regulation in May while warning of additional rules to come. China introduced its first major regulatory measure towards cryptocurrencies in 2013, when it banned bitcoin as a medium of transaction while recognizing it as virtual property.

Tangent

Bitcoin and the broader cryptocurrency market soared during the pandemic in light of inflationary concerns and skyrocketing institutional adoption, but prices ended a year-long rally in April , when Tesla, one of the biggest bitcoin companies, revealed that it had sold a large chunk of its holdings and would not. buy more until bitcoin mining uses less power. Markets have largely failed to recover since then amid heightened regulatory repression from China, with the value of global cryptocurrencies still being around 30% below its peak of near 2.6 trillion dollars on May 12.

Chief critic

China’s authoritarian crackdown on crypto, including #Bitcoin, is a great opportunity for the United States, Senator Pat Toomey (R-Pa.), One of the many lawmakers who have introduced legislation to help Relaxing potential cryptocurrency regulation in the United States, Twitter said on Friday, adding: It’s also a reminder of our huge structural advantage over China.

Further reading

Chinese Central Bank Says All Cryptocurrency Transactions Illegal (Forbes)

Crypto Markets Suddenly Lose $ 250 Billion in Value as Evergrande Turmoil Hits Bitcoin, Ethereum, and Other Major Cryptocurrencies (Forbes)

China clamps down on crypto trading, says ‘speculative’ trading ‘seriously violates’ financial order (Forbes)

[ad_2]