The Bitcoin and crypto market plunge continues. The most recent dip comes after the Chinese government reiterated its tough stance on Bitcoin fueled by the upcoming release of the government-backed token. The China crypto crackdown is not the only event shaking the crypto industry right now. As the Evergrande crisis continues to loom over China’s near-perfect economy, it’s also impacting the price of many royalties and the crypto market indirectly.
Last Friday, Bitcoin’s price dropped around 10% down to the $40,000 mark. Things were looking a bit up on Monday, but the largest cryptocurrency by market volume has simply been unable to dig itself out of the hole. Currently trading for just over $42,000, experts are adamant that the dips will continue before any progress is made.
China Continues Hunting Miners and Traders
The market has taken a huge dip a few weeks ago after China publicly denounced cryptocurrencies. It has been going on since May, with the Asian country continuing a series of crackdowns on miners and traders. First, it banned financial institutions and payment services from providing crypto services to its customers. Later, it outlawed Bitcoin, and most recently, it intensified the crypto crackdown when the People’s Bank of China released a statement that virtual currencies are not legal in the country.
The statement was written in a Q&A on the bank’s website. It said that all services that offer trading, matching, and token issuance, are strictly prohibited from operating in the country. Crypto exchanges were banned in China since 2017, but its citizens still found a way to invest and trade. However, the government has now announced that it would investigate exchanges with headquarters overseas that reside in China for participation in the crypto industry which is a far more severe measure than just legal drafts.
Authorities in China have also been adamant to reduce the hype on crypto prices by censoring information in various media and online. Different government departments will work together to share information and possibly eradicate any threats quickly. There’s been talk of an early warning system that will monitor trading accounts of local governments and close them when needed. It’s a bad time to be a crypto fan in China, and things are likely to get worse, which will surely drop the crypto market further.
What Can We Expect?
The negative crypto sentiment in China will continue, especially as the time for the digital Yuan comes near. It’s a continuation of previous trends and will surely not subside until the digital renminbi goes live. That should drop the price further, together with the eventual conclusion of the complex Evergrande case.
However, experts don’t see any concerns. Bitcoin’s price and the crypto market should stabilize soon, especially with the winter cycle coming up. In the long run, everything will settle down. The fact that Bitcoin is cycling between $40K and $50K shows that the price is more or less stable and in a great position to jump forward.