Bitcoin tumbles under China’s renewed cryptocurrency crackdown

As China continued its cryptocurrency crackdown, Bitcoin fell closer to $30,000 as the world’s second largest economy remained committed to push back on the rise of crypto markets by imposing trading bans on domestic exchanges and shutting down digital currency mining activities in the country.

China’s and Bitcoin’s relation became strained as Chinese authorities ordered cryptocurrency miners to stop their operations in the Sichuan province on Friday. Similar shutdowns were also witnessed earlier in other mining-intensive provinces in China, including Inner Mongolia.

The digital coin went down by as much as 4.3 percent and was trading at about $32,240 at 9:08 a.m. in Hong Kong, according to Bloomberg. Other cryptocurrencies have also suffered the same fate with the second-ranked Ether also falling by 4.2 percent.

China’s history with cryptocurrencies

China banned initial coin offerings (ICOs) and crypto trading in 2017. Moreover, financial institutions and payment service providers are also stopped from getting involved in crypto trades and are not allowed to open bank accounts for crypto trading purposes.

While bitcoin mining has long been concentrated in China, the authorities have also actively discouraged it. The country currently dominates the global crypto market with some of the biggest crypto-mining machine manufactures like Bitmain, MicroBT and Canaan also based in China.

It is also important to note that China provided 65 percent of the computing power for Bitcoin mining as compared to the United States’ 7 percent, according to estimates by the University of Cambridge.

While China has not provided an explicit reason for these crackdowns, it is evident that Chinese authorities want to discourage outflows aggressively.

As the bitcoin market plunges, this massive hit is expected to impact traders’ sentiments and result in heavy selling activity across other cryptocurrencies as well. It is important to note that the digital coin has already gone down by 50 percent from a record high of $65,000 in mid-April.