Skip to content

Crypto market wipes $100B in minutes as China vows crackdown on crypto trading

Crypto market wipes $100B in minutes as China vows crackdown on crypto trading

China’s central bank has announced a new series of cryptocurrency crackdown measures outlawing what it terms as illegal activities around digital currencies.

The bank has banned foreign exchanges from providing their services through the internet in mainland China, Reuters reports.

According to the People’s Bank of China, it will accelerate its monitoring capabilities to enhance the new regulations. Under the new guidelines, the bank has also banned financial institutions and payment firms from facilitating cryptocurrency trading

In the wake of the news, the cryptocurrency market wiped off the gains made early Friday. By press time, Bitcoin had corrected to $42,000, contributing to a general sudden wipe-off of about $100 billion in the cryptocurrency market cap. The asset is currently trading at $42,500, dropping almost 4% in 24 hours. 

Cryptocurrency 7-day market cap chart. CoinMarketCap

Notably, since the start of the week, the crypto market has remained highly volatile, but Bitcoin made a brief surge towards the $45,000 level on Friday, which was short-lived. 

The losses have spread across the crypto market, with all top ten cryptocurrencies based on market cap trading in the red over the last 24 hours. 

How further will Bitcoin correct?

The focus is now on how low Bitcoin will retrace. Notably, amid the volatility, market analysts believe that if the digital currency trades above $40,000, it will be a catalyst for growth. 

For instance, Mike Novogratz, founder, and CEO of Galaxy Digital states that the level is ideal for the asset to sustain its momentum for 2021, trading above the level is essential. 

The cryptocurrency market will also be looking at the full impact of the new Chinese regulations. Previously, when authorities outlawed cryptocurrency mining, Bitcoin’s rally was cut short, correcting by almost 50% from the $64,800 all-time high set in April. 

Is Bitcoin immune to crackdown?

However, some market analysts have argued that Bitcoin is growing immune to an increased regulatory crackdown. 

The author of ‘The Bitcoin Standard‘ Saifedean Ammous, had earlier suggested that China’s increased crackdown on Bitcoin would not have a long-term impact on the asset. According to Ammous. 

“You can either try and impose terms on people who use the network, and if people can accept those terms, they can continue to use it and deal with your network, but if you impose terms that are unacceptable for users or that people cannot accommodate. You can’t ban Bitcoin.”

He cites Bitcoin’s decentralized nature as a key hedge against state bans.

[coinbase]

[robinhood]

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD

Read Next:

Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Sign Up

or

By submitting my information, I agree to the Privacy Policy and Terms of Service.

Already have an account? Sign In

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.