China crypto crackdown wipes $400 billion off market, BTC slides

Bol News  |  Jun 22, 2021

China’s renewed crackdown on the cryptocurrency industry has wiped off around $400 billion in value from the total digital currency market since Friday when a major bitcoin mining hub ordered miners to shut down operations.

Bitcoin was down by more than 8% in the last 24 hours, at $29,791, at around 8:40 a.m. ET on Tuesday. It broke below $30,000 for the first time since Jan. 27, according to CoinDesk data. Other cryptocurrencies including ether and XRP were also sharply lower.

Over the past few days, China has stepped up its efforts to rein in the country’s cryptocurrency industry.

Mining ban, PBOC warning

Authorities in China’s Sichuan province ordered cryptocurrency miners to shut down their operations, according to multiple media reports. Sichuan is one of the biggest bitcoin mining centers in China.

Many bitcoin mines in the southwestern Chinese province were closed as of Sunday, according to state-backed tabloid the Global Times.

These are not new rules, but the PBOC’s comments show how China’s top regulators are stepping up monitoring financial institutions related to cryptocurrencies.

China banned local cryptocurrency exchanges in 2017 forcing them to move offshore. That did not stop Chinese traders from buying and selling digital coins, though it added a layer of complexity to crypto trading.

Chinese traders would have to move their Chinese yuan to a platform to buy crypto. That would be done via e-payments service like Alipay or a bank account. So the PBOC’s latest reminder to financial institutions could be looking to stamp this out further.

Since Friday, when the Sichuan authorities notified miners to shut down operations, bitcoin is down around 16%. The central bank notice added further pressure.

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