It’s no secret that China’s regulators are too fond of cryptocurrencies. They’ve already tried to clamp down on the crypto mining and trading industry numerous times, but it’s never been this harsh.
The story goes that on Friday, it was announced that several of China’s regulatory bodies have decided to take the crypto crackdown to a whole new level.
Ten governmental agencies including China’s Central bank, announced they’ll be working together from now on, in order to deal with the illegal crypto activity. By “illegal” they refer to cryptocurrency mining, as well as selling and buying.
Reasons Behind the Crypto Crackdown
China is just one in a long list of countries that have decided to crack down on the crypto industry. Their worry is that digital currencies could dimmish their efforts in tackling financial crime. Furthermore, there’s also worry that cryptocurrencies could cause problems to the environment.
This is because crypto mining is a process that requires a lot of energy, which, in turn, generates huge amounts of carbon emissions. In China, for instance, the government is working on making the country carbon-neutral. As promised by President Xi Jinping, China will become one such country by 2060.
The trouble is that keeping that promise isn’t going to be easy, especially not if with the crypto mining industry ramping up those carbon emission numbers. Banning cryptos would certainly help China with this problem.
However, as we’ve witnessed over the last 24 hours, the cryptocurrency crackdown could have a disastrous impact on the global economy. What we saw was Bitcoin – the world’s most popular digital currency – tumbling down to almost $40k.
Bitcoin Tumbles Following the Ban News
The Bitcoin price experienced a nose-dive on Friday, following the news about China’s crypto crackdown. Its price lost about 5.5% of its value without hours. It was even more extreme with other digital currencies. Ether (ETH), for instance, fell by 9%.
The fall of cryptos started a few days before China revealed its crackdown plans. The price of Bitcoin started falling sharply on Monday when rumors started spreading about China’s plans. In a single day, it shed almost $4,000 of its value.
Its fall continued over the next couple of days. On Wednesday, BTC went to nearly $40,000 before making a comeback to almost $45,000. Then, it dropped again on Friday and is now just below $42,200.