The world’s most traded cryptocurrency plunged 10% on Wednesday to trade at $ 40,728 per coin, according to Coindesk, a news and information website specializing in crypto assets. This is the lowest level of Bitcoin since February. This is also a 36% drop from the all-time high of $ 63,347 in April.
Bitcoin was already down this month after Tesla ( CEO Elon Musk said he was wary of its environmental impact. But a new announcement from a trio of Chinese finance and banking watchdogs seems to have shocked cryptocurrency markets even more. )
The agencies said on Tuesday that financial institutions and payment companies should not participate in any cryptocurrency-related transactions, nor should they provide crypto-related services to their customers.
“Cryptocurrency prices have skyrocketed and fallen recently, and speculative trading has rebounded. This seriously harms the security of people’s property and disrupts normal economic and financial orders, ”said the statement from regulators overseen by the People’s Bank of China and China Insurance. and Banking Commission.
Members of the public can own or trade cryptocurrencies, but major exchanges in mainland China have been closed. In 2017, authorities also banned initial coin offerings, a way for tech startups to raise funds by issuing crypto tokens to the public.
The growing crackdown may also help in part to boost the Chinese state-backed digital yuan initiative, which authorities are working to implement so that it can keep money flows under its tight watch.
While the 2013 advisory only mentioned bitcoin by name, some observers have viewed it as applicable to all cryptos, given Beijing’s distaste for currencies. The China Times, a state-owned company, described the latest announcement on Wednesday as a “risk warning in nature.” Although not a national law or regulation, it represents an “industry standard to some extent,” the outlet wrote, citing Zhu Youping, an official with the State Information Center. , a political think tank.
Still, it shows that China isn’t changing course on crypto anytime soon – and that seemed like enough to worry traders.
Along with Bitcoin’s fall, several other major cryptos were down on Wednesday. Ethereum fell 14%, trading at $ 2,978 – a drop of 31% from a high reached last week. The dogecoin meme turned cryptocurrency lost 13%.
“China’s position on cryptocurrencies has been clear from the start: trading and using cryptocurrencies is simply prohibited,” Ipek Ozkardeskaya, senior analyst at Swissquote, wrote in a research note Wednesday. “Therefore, the news is not ‘news’, but since crypto traders are too sensitive to negative news these days, it adds to the downward pressure on cryptocurrencies. “
Before China’s latest announcement, Tesla’s Musk had already sent the crypto markets into a wild ride.
He did an about-face last week on a plan to allow his electric car maker to start accepting bitcoin as payment for its cars by suspending the program, citing sustainability concerns over mining. bitcoin. The cryptocurrency fell 12% thereafter. It continued to drop earlier this week after Musk appeared to suggest his automaker may have thrown away his digital currency holdings, although he later clarified that was not the case.
Dogecoin, meanwhile, fell earlier this month after Musk – the coin’s biggest supporter – joked about it on “Saturday Night Live.”
But both cryptos are still astronomically higher than they were a year ago. Bitcoin has risen 323% in the past year, according to Coinbase, while dogecoin has climbed 670%.