Bitcoin extended losses on Friday afternoon and fell more than 11% after China redoubled its efforts to prevent speculative and financial risk by cracking down on the mining and trading of the largest cryptocurrency. China’s Financial Stability and Development Committee, chaired by Vice Premier Liu He, highlighted Bitcoin as the asset it needs to regulate more. Continue reading
The world’s largest and most popular cryptocurrency recently traded 11.59% to $ 35,928 after holding the $ 40,000 level for most sessions in Asia and London.
Since reaching an all-time high of just under $ 65,000 in mid-April, Bitcoin has fallen about 45%. It’s down 28% so far this week.
The statement, issued days after three Chinese crypto-related services industry associations tightened its ban on banks and payment companies, marked a sharp escalation in the country’s drive to stamp out speculation and fraud in virtual currencies.
Liu is the oldest Chinese official publicly ordering crackdown on Bitcoin. This is the first time the government has explicitly targeted crypto mining.
“It is difficult to see the real impact of China’s potential action because these statements are made without specifics,” said John Wu, president of Ava Labs, an open source financial applications platform.
“However, that statement shows the clear risk that Bitcoin mining is so dependent on China and the will of its government.”
Cryptocurrency exchanges operating in Hong Kong must be licensed by the city’s market regulator and may only provide services to professional investors, according to government proposals due later this year. Continue reading
Earlier on Friday, China’s state broadcaster CCTV warned of “systemic risks” in cryptocurrency trading in a comment on its website.
“Bitcoin is no longer an investment vehicle to avoid risk. Rather, it is a speculative instrument,” said CCTV. The addition of the cryptocurrency is a slightly regulated asset that is widely used in black market trafficking, money laundering, gun smuggling, gambling, and drug trafficking.
The competing ether of the cryptocurrency also came under pressure, trading around 15% at $ 2,339.
“China has tried attacking Bitcoin, exchanges and mining so many times since 2013 that I no longer think this should come as a surprise,” said Ruud Feltkamp, CEO of Crypto Trading Bot Cryptohopper.
“I would be surprised if this had a significant long-term impact on Bitcoin.”
China’s most recent campaign against crypto came after the U.S. Treasury Department on Thursday called for new rules requiring large cryptocurrency transfers to be reported to the Internal Revenue Service and the Federal Reserve flagging the risks to the financial stability of cryptocurrencies. Continue reading
“My nerves stayed sharpened, and I can’t see that Saturday and Sunday liquidity is higher than Monday through Friday, especially after last week,” said Jeffrey Halley, senior market analyst at OANDA.
“The weekend headline risk could lead to another spell of widespread wealth destruction for the weekend warriors.”
Bitcoin markets are open 24/7, setting the stage for price fluctuations at unpredictable times, with retailers and day traders driving these movements. Continue reading
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