For the first time since January, the world’s most famous cryptocurrency – Bitcoin fell below the $30,000 milestone. The price of Bitcoin had been fluctuating between $30,000 and $40,000 and it was quite unexpected that the currency’s value would fall below the $30,000 milestone. Although the currency’s value is back above this milestone, it shortly erased the gains for the year and added to the losses that the crackdowns spearheaded by the Chinese government caused.
China’s continuous crackdowns against the cryptocurrency are one of the major reasons why Bitcoin’s value continues to fluctuate, and the most recent crackdown on Sichuan province of China seems to have had adverse effects on Bitcoin. Earlier today, Bitcoin value’s which was over $30,000 fell to $28,600 – its lowest since the beginning of the year after giving up gains achieved during Asian hours. Other coins, such as Ethereum network’s Ether also felt some pressure from Bitcoin’s fall.
On Monday, Bitcoin fell 11 percent. This was its largest one-day drop in at least four weeks. Losses ran into almost 30 percent for last week erasing the year-to-date gains.
The crackdowns against Bitcoin have been very severe. Chinese authorities continue to shut down mining operations in provinces across the country. The People’s Bank of China also revealed that they have urged payments platforms like Alipay, to restrict crypto payments on their platforms.
“The underlying fundamentals of the crypto-asset world have not changed and this correction was more of a when, not if”, Iqbal Gandham; Vice President of transactions at Ledger – a digital asset management solution, said.
“Any asset class which sees a meteoric rise in the same way as we have seen in crypto is expected to correct. The situation in China has perhaps exacerbated this, along with the increased rate of adoption of altcoins by new users, following tweets of various crypto personalities”, he added.
Following Bitcoin’s continuous falls, Ethereum blockchain network’s Ether and the second-largest cryptocurrency, fell 4.5% to $1,801. It dropped to $1,700 – its lowest in a month.
“China’s iron-fist ban on crypto seems to be more serious than back in 2017 as the directive came straight from the top,” Anthony Wong of Hong Kong-based crypto firm Orichal Partners said.
Market players believe that the crackdown on miners will likely hit prices in the short term. “Some of the miners in China may be more willing to sell their Bitcoin now versus when they are can run their mining operations because they have to raise cash”, Seth Melamed of Tokyo crypto exchange Liquid said.
Already, more than three metric tons of Bitcoin mining rigs have been taken out of China following the crackdowns.