News of China’s Crackdown on Crypto Crash Bitcoin (BTC)
The leading coin crashed even closer to $7,000 even before the US markets opening, as Chinese authorities sent out more hawkish messages against illegal crypto practitioners.
Bitcoin (BTC) saw no stop to its slide, and it was only exacerbated by events in China, cracking down on local projects deemed illegal. The moves against projects claiming crypto activities in Shenzen managed to affect even the leading coin.
Dovey Wan, co-founder of Primitive Crypto and observer of trend and news in China, has noted the effect of recent fears about authorities cracking down on cryptocurrency projects. The biggest effect followed a message from People’s Bank of China, most generally saying a crackdown is expected against “cryptocurrency trading”.
Wan explained that the nuance suggested PBOC may scrutinize illegal token sales. In the past, she has noted Chinese nationals find ways to trade crypto assets, including BTC.
But the general unease of Chinese traders may have been the trigger for this week’s price slide.
A report on CCTV1 with statements that crypto was closely related to fraud also dampened the mood of traders. With most of BTC activity centered around exchanges serving the Chinese market, it was no surprise BTC moved down from the $8,800 range, to potentially below $7,000.
The effect of Chinese officials and their actions clashed with an earlier statement from China’s president Xi Jinping. The statement at the end of October led to a spike in BTC prices by 42% overnight, as Chinese traders immediately boosted their activity.
The current correction is therefore even more serious. BTC moved down from the $7,500 range, within minutes erasing hundreds of dollars to trade as low as $7,117. But once again, the leading market remains BitMex, where futures trading brought down the BTC price to $7,077.
The BTC crash based on China’s comments may have been a concerted event, to generate euphoria followed by a crackdown, commented Wan.
The recent price slide may also prevent miners from upgrading their machines. Currently, most miners use S9 rigs, but investing in S17 would take years even at $7,000 BTC to repay. The bearish outlook, combined with the halving of the block reward, may spill over and affect ASIC producers even more.
Neither the author nor the publication assumes any responsibility or liability for any investments, profits, or losses made as a result of this information. Cryptocurrency trading and investing are risky propositions, and market participants are advised to always conduct thorough research.