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Highlights
- The Chinese ban on all cryptocurrency transactions has left the digital currency markets in dire straits.
- On Friday, Bitcoin fell as much as 5%; Ether and other crypto stocks also slipped, sending a panic wave among crypto investors.
- It would require some positive announcements for popular cryptocurrencies such as Bitcoin and Ethereum to recover their losses.
Ever since Chinese regulators intensified a crackdown on cryptocurrencies, banning all crypto-related transactions, the digital currency markets have been in an extremely frail state overall. On Friday, Bitcoin fell as much as 5%; Ether also slipped, as did other crypto stocks, sending a panic wave among crypto investors.
Image Source: @2021 Kalkine Media
Now, with this blanket ban on all crypto transactions, crypto and blockchain-related stocks are expected to feel the heat this week.
How Bitcoin, Ethereum behaved last week
Bitcoin started September on a positive note. However, towards the end of the month, the world’s largest crypto was seen wallowing in the red, falling from US$48,500 to US$39,600 amid weakness arising out of Evergrande Group’s debt default.
The popular cryptocurrency recovered marginally soon after to hit US$45,000 on the news of Evergrande paying back a part of debt and the Fed monetary policy remaining unchanged. However, within an hour, Bitcoin nosedived to US$40,700 due to China hitting what seemed like the final nail in the coffin.
According to cryptocurrency exchange CoinDesk, Bitcoin was trading at US$43,798.90, up 2.99% at 11:10 AM (AEST) on Monday.
On the other hand, Ethereum, which had hit the US$4,000 mark in the first week of September, fell 25% last Friday. It plunged to a low of US$2,656 from US$4,000.
On Monday, Ethereum was trading at US$3,125.17, up 8.07%.
Image Source: @2021 Kalkine Media
Bottom Line
It is not the first time that China has vowed to maintain heavy regulatory pressure on cryptocurrency trading and speculation. The last crackdown came in May this year. But the cryptocurrency recovered after a brief dip. The latest ban by China on crypto trading and mining does seem to have riled the crypto markets and it would require some positive announcements for the popular cryptocurrencies such as Bitcoin and Ethereum to recover going ahead.
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