China makes all cryptocurrency transactions illegal after ordering the shutdown of bitcoin mining in Sichuan province, causing crypto market prices to drop in market value
The cryptocurrency market is down 11.43% over the past 24 hours (5:30 p.m., Friday, January 21, 2022).
After a year of gains and records, cryptocurrencies are going through a turbulent time with unpredictable price changes.
Bitcoin and other top crypto coins saw a significant drop in share price after investors began dumping mining equipment as China announced new regulations.
- Bitcoin (BTC) -10.47% (£28,340.17)
- Ethereum (ETH) -13.42% (£2,058.91)
- Tether (USDT) +0.61% (£0.74)
- Binance Coin (BNB) -8.04% (£316.28)
- Gimbal (ADA) -13.31% (£0.89)
- Solana (SOL) -10.20% (£93.84)
- XRP (XRP) -8.12% (£0.51)
- Earth (LUNA) -6.99% (£57.33)
- Peas (DOT) -12.72% (£16.20)
- Dogecoin (DOGE) -8.05% (£0.11)
- Avalanche (AVAX) -14.83% (£54.36)
- Polygon (MATIC) -13.35% (£1.38)
- SHIBA INU (SHIB) -11.54% (£0.00001840)
This follows recent crashes caused by Tesla backtracking on accepting Bitcoin as payment for its products and China cracking down on initial coin offerings, blocking exchanges and warning against speculative trading.
Another blow came when China ordered a complete shutdown of Bitcoin mining in its Sichuan province and further instructed banks to stop supporting crypto transactions, as part of a latest wave of crypto restrictions.
Today, the country’s central bank, the People’s Bank of China, effectively banned digital coins after announcing that all cryptocurrency transactions were illegal.
The decision has already impacted the global crypto market.
Why is the crypto market falling?
China’s crackdown on crypto comes days after Musk’s shock announcement.
Musk’s decision means a sharp turnaround for Tesla, which only started accepting bitcoin as payment for its services in February 2021.
It came after the electric car company bought $1.5bn (£1.06bn) worth of Bitcoin shares, sending the crypto market and Tesla’s price skyrocketing.
The billionaire entrepreneur said, “We are concerned about the increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of all fuels.”
Musk reiterated his belief that cryptocurrency has a “bright future” but “can’t come at a cost to the environment,” in his Twitter post.
Musk is a long-time cryptocurrency advocate, and Tesla’s decision was felt across the market as other digital tokens fell in price.
What is the price of Bitcoin and Ethereum?
The Bitcoin price was £28,340.17 after the last price drop (January 21), according to Coinbase.
The value of Ethereum is now £2,058.91.
Cryptocurrencies are considered a cheaper alternative to traditional banking methods of moving money as they are not regulated by the government or its banks.
Tesla’s decision, and announced by Musk, was seen by some as undermining the credibility of cryptos to become a viable means of payment against physical currencies.
What crypto prices are falling?
Bitcoin was not the only cryptocurrency to feel the initial effects, with most of the top 10 all seeing declines in value.
Dogecoin, initially set up as a joke in 2012 before seeing its shares soar, also fell while Solana saw its market price rise by more than 8%.
Musk’s influence cannot be underestimated because even though PayPal, Mastercard and Facebook supported cryptos, Tesla’s announcement still shook the market.
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