Bitcoin, other cryptocurrencies continue to tumble with increasing China crackdown

Bitcoin, other cryptocurrencies continue to tumble with increasing China crackdown

Chinese authorities ordered the shut down of bitcoin mining projects in the southwest province of Sichuan, which is reportedly the second-largest producer of cryptocurrency.

(Image: Reuters) (Image: Reuters)
Story highlights
  • Bitcoin's value dropped further, continuing a two-week-long slump in the market.
  • Other cryptocurrencies also lose their value in the wake of an increasing crackdown in China.
  • Banks and payment firms in China have also been instructed to monitor illegal cryptocurrency mining and trading.

Bitcoin continues to tumble as China expands its crackdown on its mining. The downfall comes months after the cryptocurrency experienced a record high in the global markets.

The world's most valued cryptocurrency fell to as low as $31,400 on Monday, dragging others in its wake. The slump continues from a two-week dip triggered by the Chinese crackdown on its mining and trading in a bid to eliminate financial risk for the country's investors.

On Friday, Chinese authorities in the southwest province of Sichuan ordered the shut down of bitcoin mining projects. Following the order, China's central bank summoned some banks and payment firms, including China Construction Bank and Alipay, and urged them to stop cryptocurrency trading.

Citing data from the University of Cambridge, a report by The Guardian points out that bitcoin mining in China accounted for about 65 per cent of global production in 2020. The data also reveals that Sichuan is the second-biggest producer of cryptocurrency.

Crackdown on the operations in the region, thus, was bound to have a global impact on bitcoin's appeal. Agricultural Bank of China (AgBank), China's third-largest lender by assets, confirmed that it would shut down illegal activities involving crypto mining and trading based on the guidance of the People's Bank of China.

In another statement, Ant Group's payment platform Alipay stated that it would set up a regulator monitoring system that will target suspicious websites and accounts to detect illegal crypto transactions.

Bitcoin's price drop reflected in almost all other cryptocurrencies. Ether dropped to a five-week low of $1,890. Similarly, Matic dropped to $1.15 for the first time in the last six weeks.

Investors' trust in cryptocurrency lingers on by a thread as the government's around the world begin regulating their trading and mining. Earlier this month, Thailand banned meme coins, NFTs and exchange tokens in new regulation for its crypto market. Thai SEC directed digital asset exchanges to delist these tokens within 30 days of the effective date of the notice, that is, June 11.

It stated that the new regulatory guideline is meant to protect the interest of digital asset traders.