China makes all cryptocurrency transactions illegal after ordering the shutdown of Bitcoin mining in Sichuan province, causing crypto market prices to drop
The cryptocurrency market is down 3.58% over the past 24 hours (2:45 p.m., Friday January 7, 2022).
After a year of gains and records, cryptography currencies are going through a turbulent period with unpredictable price changes.
Bitcoin and other leading crypto coins saw a significant drop in their stock prices after investors started dumping mining equipment as China announced new regulations.
- Bitcoin (BTC) -3.21% (Â£ 30,873.27)
- Ethereum (ETH) -6.59% (Â£ 2,365.35)
- Tie (USDT) -0.12% (Â£ 0.74)
- Binance Coin (BNB) -4.76% (Â£ 329.51)
- Solana (SOL) -8.21% (Â£ 102.63)
- Cardano (ADA) -2.07% (Â£ 0.90)
- XRP (XRP) -1.05% (Â£ 0.55)
- Terra (LUNA) -6.98% (Â£ 52.23)
- Polkadot (DOT) -3.81% (Â£ 18.63)
- Avalanche (AVAX) -6.14% (Â£ 66.12)
- Dogecoin (DOGE) -3.76% (Â£ 0.11)
- SHIBA INU (SHIB) -3.59% (Â£ 0.00002170)
- Polygon (MATIC) -3.47% (Â£ 1.57)
This follows recent crashes caused by Tesla who flip-flopped by accepting Bitcoin as payment for its products and China cracked down on initial coin offers, block exchanges and warned against speculative trading.
Another blow came when China ordered the complete shutdown of Bitcoin mining in its Sichuan province and further asked banks to stop supporting crypto transactions, in a latest wave of restrictions on cryptos.
Now the country’s central bank, the People’s Bank of China, has effectively banned digital coins after announcing that all cryptocurrency transactions are illegal.
The move has already had an impact on the global crypto market.
Why is the crypto market down?
China’s crypto crackdown comes days after Musk’s shocking announcement.
Musk’s decision means a dramatic turnaround for Tesla, which only started accepting Bitcoin as a payment method for its services in February 2021.
This came after the electric car maker bought $ 1.5 billion (Â£ 1.06 billion) of Bitcoin shares, which spiked the market price of crypto and Tesla. .
The billionaire entrepreneur said: “We are concerned about the rapid increase in the use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of all fuels.”
Musk reaffirmed his belief that cryptocurrency has a “bright future” but that it “cannot cost the environment dearly,” in his post on Twitter.
Musk is a longtime cryptocurrency advocate and Tesla’s move has been felt across the market as the price of other digital tokens plummets.
What is the price of Bitcoin and Ethereum?
Bitcoin’s price was Â£ 30,873.27 after the last price drop (January 7), according to Coinbase.
Ethereum’s value is now Â£ 2,365.35.
Cryptocurrencies are seen as an alternative to traditional, cheaper banking methods for moving money because they are not regulated by the government or its banks.
Tesla’s move, and announced by Musk, has been viewed by some as a breach of the credibility of cryptos become a viable means of payment against physical currencies.
What are crypto prices going down?
Bitcoin was not the only cryptocurrency to feel the first effects, with most of the top 10 all experiencing declines in value.
Dogecoin, which was first set up as a joke in 2012 before its shares shot up, also fell as Solana saw its market price rise by more than 8%.
Musk’s influence cannot be underestimated because, although PayPal, Mastercard and Facebook backed cryptos, Tesla’s announcement rocked the market again.
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