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Tuesday, October 19, 2021

Bitcoin Price Plummets After Chinese Crackdown

The Chinese crackdown on cryptocurrencies has intensified to a level that the price of Bitcoin has suffered yet again. Several government agencies in China, which also include the securities regulator and the People’s Bank of China, stated that every business activity that was related to cryptocurrency has been deemed illegal and they would be looking forward to clamping down on any illicit activities that involved digital currencies. The agencies have also mentioned that overseas exchanges of cryptocurrencies would be blocked from providing any form of services to the residents of China through the world wide web. 

Bitcoin Price Goes Down After China Crackdowns On Mining

The price of Bitcoin went down by 5% after this news. Ethereum, another cryptocurrency that had been going pretty steady, has also gone down by 9%. The agencies have stated that China would be moving in to develop newer systems that would counter risks that were posed by cryptocurrencies. The country would then start closing down mining operations of the different token currencies, and no new mining projects would be allowed- which was later confirmed by the National Development and Reform Commission. These announcements have been the latest in quite a large compendium from China on banning cryptocurrencies. 

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Back in May, Liu He, the Vice Premier of China, stated that the government would be clamping down on trading activity as well as mining Bitcoin- which would be a major part of their goal in achieving financial stability. This has led to finance and banking watchdogs stating that payment companies and financial institutions should not be major participants in any cryptocurrency transactions. 

As understood by big analysts, these measures aren’t just put in place to curtail financial risk. Rather, since computers need a lot of electricity and computing power for Bitcoin mining, the country has raised concerns about the cost to the environment.

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