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Someday you’re on top of the world, making headlines for your next appearance on SNL. Soon after, you are the laughing stock of the Internet. This is the curse of DogeCoin which, along with Bitcoin, Ethereum, and pretty much every other cryptocurrency, lost value on Monday.
DogeCoin is down more than 30%, to 17.6 cents. That’s a huge drop from its stratospheric high of 70 cents in April. Bitcoin is at $ 31,500, a drop of just over 10%, while Ethereum has slumped 15%. The fall of Ether has affected thousands of altcoins, most of which are built from the Ethereum blockchain and have some of their value weighted in Ether coins. The overall market is down 12%, according to CoinBase.
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What is the reason? China – again. In May, Chinese authorities reaffirmed an old ban prohibiting financial companies from actively assisting in mining and selling cryptocurrencies. This caused a sharp drop, but crypto enthusiasts shrugged their shoulders saying the ban was not new, that it was enshrined in 2013 and then little enforced.
Everything is broken down.
CoinBase
On Monday, however, measures taken by China indicated that the law would be enforced much more seriously. Key banks and financial services companies like Alipay attended a meeting of the central bank of China, the South China Morning Post reports, where they were asked to crack down on cryptocurrency trading. It came days after regional authorities ordered the closure of 26 mining operations in Sichuan.
“Virtual currency transactions and speculative activities have disrupted the normal order of economy and finance [system]”The central bank said in a statement posted on its website.” They increase the risks of illegal cross-border transfers of assets and illegal activities such as money laundering. “
The decentralized nature of cryptocurrency is anathema to the Chinese Communist Party’s emphasis on stability and control. Although avoiding Bitcoin, Ethereum, and other cryptocurrencies, China is working to roll out its own digital currency, the e-yuan.
China’s #bitcoin ban is negative in the short term, positive in the long term
Anthony Scaramucci (@Scaramucci) June 21, 2021
The dominant driver of #Bitcoin right now is the crackdown on mining and trading in China that began in May. This created a forced and precipitous exodus of Chinese capital and Bitcoin network mining – a tragedy for China and a benefit to the rest of the world in the long run.
Michael Saylor (@michael_saylor) June 19, 2021
Bitcoin enthusiasts compare the cryptocurrency to Google, whose share price continued to prosper after being banned in the People’s Republic in 2010. They say China is neglecting cryptocurrencies at its peril, and that it will be of long-term benefit to the United States. .
DogeCoin holders are less peaceful. The memecoin entered the year valued at less than a cent and was pumped by Elon Musk and a tongue-in-cheek internet movement in hopes of raising it to 10 cents – similar to the move trying to carry the action of GameStop at $ 1,000. The 10-cent target was hit in April, then eclipsed the following month. With the hype surrounding a potential Musk announcement at SNL, the memecoin hit 73 cents. After Musk called DogeCoin a “turning point” on the show, its value plummeted, a trend that continued for the past month.
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