The news: The intensification of the crackdown in China has caused cryptocurrency prices to plummet. China has tightened its cryptocurrency regulations for some time, but it now seems likely that more than 90% of Bitcoin’s mining capacity in the country will shut down, according to a report in the World time, which is published by the Chinese state. Authorities in southwestern Sichuan Province last Friday ordered crypto miners in the region to cease operations.
Yesterday, the central bank of China ad he was ordering banks to crack down on cryptocurrency trading.
The effects: On the same day, Bitcoin’s price fell to $ 31,333 – it fell 20% last week – amid growing uncertainty about its future. Other cryptocurrencies have fallen as well, and the overall market has lost 12% in value over the past two days, according to cryptocurrency exchange platform CoinBase. These events also have an impact on hardware prices. Chinese consumers looking to purchase graphics cards, which are essential components for Bitcoin mining, have seen significantly lower prices over the past day. Some prices had plunged as much as 66%, according to the South China Morning Post.
Why now: China views cryptocurrencies, which are decentralized and unregulated, as a threat. Its central bank said they had “disrupted the normal order of the economy” and “increased the risks of illegal cross-border transfers of assets and illegal activities such as money laundering.” It plans to become the first country to launch its own official digital currency, the e-yuan.
Another alternative: Bitcoin mining will not stop because of the Chinese crackdown. Instead, operators will move elsewhere. Texas was touted as a place that could benefit from the new restrictions in China, thanks to its relatively lax regulatory environment and cheap electricity.
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