Bitcoin extended its losses on Friday afternoon, falling more than 11% after China doubled its efforts to prevent speculative and financial risks by cracking down on mining and trading in the largest cryptocurrency. China’s Financial Stability and Development Committee, chaired by Vice Premier Liu He, has named bitcoin as the asset it needs to further regulate. Read more
The world’s largest and most popular cryptocurrency recently fell 11.59% to $ 35,928 after maintaining the $ 40,000 level for most Asian and London sessions.
Since hitting a record high of just under $ 65,000 in mid-April, bitcoin has fallen about 45%. It’s down about 28% so far this week.
The statement, which came days after three Chinese industry bodies tightened the ban on banks and payment companies providing crypto-related services, was a sharp step up in the country’s efforts to root out speculation and fraud in virtual currencies.
Liu is the most senior Chinese official to publicly order a bitcoin crackdown. This is the first time the government has explicitly targeted crypto mining.
“It is difficult to understand the real impact of a potential Chinese action, as these statements are made without details,” said John Wu, president of Ava Labs, an open-source platform for financial applications. .
“That said, this statement shows the clear risk for bitcoin mining to be so dependent on China and the will of its government. “
Cryptocurrency exchanges operating in Hong Kong will need to be licensed by the city’s markets regulator and will only be allowed to provide services to professional investors, according to government proposals to be presented later this year. Read more
Earlier on Friday, Chinese state broadcaster CCTV warned of the “systemic risks” of cryptocurrency trading in a comment on its website.
“Bitcoin is no longer an investment tool to avoid risk. Rather, it is a speculative instrument, ”CCTV said, adding that cryptocurrency is a lightly regulated asset often used in black market trading, money laundering, arms smuggling, gambling. money and drugs.
Rival cryptocurrency ether also came under pressure, trading down around 15% to $ 2,339.
“China has tried to tackle bitcoin, trading and mining so many times since 2013 that I don’t think it should come as a surprise anymore,” said Ruud Feltkamp, chief executive of the bot. crypto-trading Cryptohopper.
“I would be surprised if this had a substantial long term effect on bitcoin. “
China’s latest campaign against crypto came after the US Treasury Department on Thursday called for new rules that would require large transfers of cryptocurrency to be reported to the Internal Revenue Service and the Federal Reserve reported. the risks that cryptocurrencies posed for financial stability. Read more
“The nerves have remained on the rise, and I can’t see the liquidity getting any deeper on Saturdays and Sundays than Monday through Friday, especially after last week,” said Jeffrey Halley, senior market analyst at OANDA.
“The weekend title risk could cause another episode of prolonged destruction of wealth for the weekend warriors. “
Bitcoin markets operate 24/7, paving the way for price swings at unpredictable times, with retail and day traders driving those moves.
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