Bitcoin value plummeted to 34000 USD for the first time in three months after China’s ban on services related to cryptocurrency. The news follows after Tesla has decided to discontinue payments in bitcoin due to environmental concerns. The Chinese stance has always been bearish on cryptocurrency, but this recent move has significantly dented Chinese investor’s interests in digital currency.
Cryptocurrency trading in china has been illegal since 2019. But people were still able to trade crypto online which has raised concerns among the Beijing top brass. China’s crackdown on crypto has been subject to criticism from all around the globe. The Chinese government believes that the wild swings in cryptocurrency prices have put their citizen’s asset safety at risk.
“China has for some time been putting pressure on the crypto space, but this marks an intensification – other countries might follow now as central banks make strides towards their digital currencies.
“Until now, Western regulators have been pretty relaxed about Bitcoin, but this might change soon.”
Neil Wilson of Markets.com
Bitcoin and China
China developed their digital currency named “Digital Yuan”, a coin based on blockchain, but one that the Chinese government permits which will defeat the whole purpose of a decentralized network. The rest of the world might reject China’s digital yuan as it poses a threat to user anonymity, a prerequisite for any digital currency.
Along with Bitcoin, other cryptocurrencies have seen their value decrease after the news broke out. Dogecoin dropped from 0.48 USD to 0.21 in 24 hours representing a 45 % drop.
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