Bitcoin slumps further as China tightens crypto crackdown
Bitcoin tumbled on Monday to a two-week low on China's expanding crackdown on bitcoin mining, as investors grew more uncertain about the continuing future of the leading cryptocurrency.
Bitcoin fell only US$31,333, a two-week trough, dragging down other cryptocurrencies. It had been last down 10.7 per cent, its major daily percentage loss in a month.
The world's biggest cryptocurrency has lost a lot more than 20% within the last six days alone and was at half its April peak of almost US$65,000. Year to date, it remained up about 11 %.
Some bitcoin investors were concerned further losses could be in store because of a chart formation referred to as a death cross which occurs when a short-term average trendline crosses below a long-term average trendline.
China has been tightening its crackdown on cryptocurrencies. On Friday, authorities in the southwest province of Sichuan ordered bitcoin mining projects to close.
Last month the State Council, China's Cabinet, vowed to clamp down on mining and trading within a campaign to regulate financial risks.
On Monday, China's central bank said it recently summoned some banks and payment firms, including China Construction Bank and Alipay, urging them to crack down harder on cryptocurrency trading.
"People still react strongly to actions from China that create uncertainty so this will probably reflect negatively on the bitcoin price," said Ruud Feltkamp, ceo at crypto trading bot Cryptohopper.
"China is rolling its cryptocurrency and has every incentive to have only a small amount competition as possible...I think we will have miners leaving China and relocate where there is spare or cheap energy."
Data on mining is scarce. Yet bitcoin in China accounted last year for approximately 65% of global production, according to data from the University of Cambridge, with Sichuan its second-biggest producer.
Agricultural Bank of China (AgBank), China's third-largest lender by assets, said separately it had been following People's Bank of China's guidance and would conduct homework on clients to root out against the law activities involving crypto mining and transactions.
Alipay, the ubiquitous payment platform owned by fintech giant Ant Group, said in a separate statement it would set up a regulator monitoring system targeting key websites and accounts to find illegal crypto-related transactions.
In other cryptocurrencies, ether, the token used for the Ethereum blockchain, dropped to a five-week low of US$1,890. It had been last down 14.3 % at US$1,922.05.
Also on Monday, auction house Sotheby's announced that a rare pear-shaped diamond that's expected to fetch up to US$15 million can be bought at an auction the following month using cryptocurrencies. It could be the 1st time a diamond of such size has been offered for public purchase with cryptocurrency.
Source: www.channelnewsasia.com
