Chinese ban adds to Bitcoin’s woes, price sinks 8%

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Chinese ban adds to Bitcoin’s woes, price sinks 8%

 Chinese ban adds to Bitcoin’s woes, price sinks 8%
Image source: Bitcoin, Ethereum and Ripple coins - largest cryptocurrencies by market capitalisation. © Josefkubes

Summary

  • China moves to ban cryptocurrencies citing volatility.
  • However, it doesn’t ban the articles.
  • Bitcoin prices plummet after the move.

The prices of Bitcoin tumbled 7.6% after the world’s second largest economy, China, banned financial institutions from offering Bitcoin and all other cryptocurrency services to clients.

This was announced in a joint statement by the National Internet Association of China, the China Banking Association and the Payment and Clearing Association of China over concerns of volatility and speculation in the digital assets.

“Recently, crypto currency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” the statement said.

The three bodies are of the belief that digital assets aren’t “supported by real values” and that their prices can easily be manipulated.

However, this ban on cryptocurrencies doesn’t mean that China has made it illegal for individuals to hold digital assets. Earlier when Nigeria made such a move, the peer-to-peer trading among the cryptocurrency holders surged by 27%.

After the announcement was made, the cryptocurrency prices – especially those of Bitcoin – plummeted. The world’s largest cryptocurrency crashed by 7.8% to touch US$42,349.15 level. However later in the day, it recovered partially and is now trading at US$42,430.89, down 5.39%.

Ethereum was also down 1.96%.

China’s latest ban comes days after Tesla boss Elon Musk’s tweets meted severe blow to Bitcoin, leading to considerable decline in its price.

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