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London: Bitcoin, ether and other digital tokens fell as China intensified its push to rein in crypto speculation and mining.
Bitcoin is down 7.8% to $41,220 as of 7:41 am in New York. Losses were more severe in other coins, with Ether, EOS, Litecoin and Dash all falling by over 7%. Crypto-related stocks also came under pressure, with Marathon Digital Holdings Inc falling 6% in US pre-market trading.
According to a Q&A statement on PBOC’s website, China’s central bank stated that all cryptocurrency-related transactions are illegal. According to the guidelines on the website of the country’s Economic Planning Agency, rooting out crypto mining is an urgent task for China and action is critical to meet the carbon targets.
Fawad Razakzada, an analyst at ThinkMarkets, warned that bitcoin is heading towards the $40,000 level or lower. China’s tough stance is what caused bitcoin price to drop in May and struggle to regain all-time highs above $60,000.
“Risks are skewed downwards for now,” Razakzada wrote in a note to customers. “China is the key risk that is likely to keep prices under pressure for some time.”
China has come under intense scrutiny this year on the crypto industry amid growing concerns over the risks of fraud, money laundering and excessive energy use. The country is a major player in crypto and as recently as April accounted for 46% of the global hash rate, according to the Cambridge Bitcoin Electricity Consumption Index, a measure of computing power used in mining and processing.
In July, the central bank vowed to maintain heavy regulatory pressure on cryptocurrency trading and speculation. –bloomberg
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