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TOKYO (Reuters) – Bitcoin tumbled as much as 9% on Monday as recent volatility in the cryptocurrency market showed no signs of abating, as market players pointed to poor liquidity and an expanding Chinese crackdown on bitcoin mining.
Bitcoin dropped to $32,288, its lowest level in 12 days, and was last down 7.5%. If it continues, the drop will be the largest in about a month.
Authorities in southwestern Sichuan Province on Friday ordered the closure of crypto-mining projects. The State Council, China’s cabinet, pledged last month to clamp down on bitcoin mining and trading as part of a series of measures to control financial risks. Read more
“The crackdown on Chinese miners could mean they dump coins in a weak market and take us down,” said Ben Sibley of London-based crypto firm BCB Group.
Bitcoin production in China accounts for more than half of global Bitcoin production. Sichuan is the second largest bitcoin mining province in China, according to data compiled by the University of Cambridge. Some miners move production there in the rainy summer to take advantage of the rich hydropower resources.
Bitcoin mining companies typically hold large stocks of cryptocurrencies, with any moves to sell in large quantities that drive prices down.
Bitcoin has fallen by more than a fifth in the past six days, dropping by half from its April peak of $65,000. However, it has gained more than 10% this year.
Smaller rival ether, the second largest cryptocurrency by market cap that tends to move in tandem with bitcoin, is down as much as 12%, dropping below $2,000 for the first time in about a month. The last drop was 10% at $2,025.31.
Kevin Buckland reports. Editing by Toby Chopra
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