- Flagship cryptocurrency briefly gives up all 2021 gains…
- China ramps up mining ban in the country…
- Other cities, countries court Chinese crypto miners…
Bitcoin continues to plunge, with the cryptocurrency turning negative for the year.
The coin’s value dropped below $30,000 today amid a fresh crackdown on crypto mining in China.
At its lowest point today Bitcoin had fallen nearly 12% to $28,946, down from where it closed out 2020 at $29,026.
The flagship coin has since gained back some of those losses — at writing, it was trading down about 3.7% and above $31,000.
Other cryptocurrencies were also hit, with Ethereum falling as much as 13% and Dogecoin dropping more than 19%.
Galaxy Digital cofounder and CEO Mike Novogratz told CNBC, “We had China really be much more forceful in their idea to ban cryptocurrency. That’s created a retail deleveraging. A lot of crypto happens in Asia, a lot of it is Chinese focused so we’re seeing big liquidations, so it’s hard to call a bottom.”
China Intensifies Crypto Crackdown
The latest rout in the crypto market comes after Beijing ramped up its restrictions on cryptocurrencies.
On Monday the People’s Bank of China issued a notice to financial institutions in the country about crypto transactions.
In that notice, the PBOC said, “virtual currency trading activities disrupt the normal economic and financial order, breed the risks of illegal cross-border transfer of assets, money laundering and other illegal and criminal activities, and seriously infringe the people’s property safety.”
The PBOC also said financial institutions in China must implement stricter guidelines on “bitcoin risks,” “token issuance financing risks,” and other regulatory requirements.
Image credit: phanurak rubpol/shutterstock.com
The Chinese Central Bank also said banks “must not provide account opening, registration, and registration for related activities.”
In a statement responding to that notice, the Postal Savings Bank of China said it will not allow any type of crypto transactions.
The PSBC said, “According to relevant regulations of the People’s Bank of China, no institution or individual may use our bank’s accounts, products, services, and channels to conduct token issuance financing and ‘virtual currency’ transactions.”
The bank also cemented its role as a monitor of crypto activity in the country, telling citizens if they notice any crypto-related behavior that they can report it to the bank.
The latest move from the PBOC comes after the Sichuan Province in Southwest China banned mining of cryptocurrencies in the region over the weekend.
Sichuan is the fifth province in China to implement such a ban.
On June 20, the Sichuan Development and Reform Commission and Energy Bureau issued a notice requiring 26 “suspected key projects” of crypto mining.
That notice said that all power generation companies were required to stop supplying electricity to virtual currency mining projects by June 25.
Since June 14, the hashrate of the Bitcoin network has steadily fallen as more mining operations are shut down.
As those miners leave China, other regions of the world are inviting them to open up shop.
Miami Mayor Courts Chinese Crypto Miners
Mayor Francis Suarez | Editorial credit: Felix Mizioznikov / Shutterstock.com
Miami Mayor Francis Suarez has said his city is open for crypto mining and he’s inviting Chinese miners to move there.
In an interview with CNBC last week, Suarez said, “We’re talking to a lot of companies and just telling them, ‘Hey, we want you to be here.’”
He touted the city’s reliance on nuclear power as sustainable, clean, and inexpensive.
“The fact that we have nuclear power means that it’s very inexpensive power,” Suarez said.
The mayor himself says he invested in Bitcoin and Ethereum as a hedge against inflation after Congress passed the $1.9 trillion American Rescue Plan this spring.
Although he expressed optimism the city would be able to build a mining center, he admits it would take time.
“Building a mining facility is similar to building a data center. It’s not something that happens overnight,” Saurez told CNBC.
The country of El Salvador is also trying to attract crypto miners to move their operations there.
In a tweet on June 9, President Nayib Bukele said he had instructed the state-owned energy company to present a plan to offer Bitcoin mining facilities in the country powered by volcanos.
I’ve just instructed the president of @LaGeoSV (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos 🌋
— Nayib Bukele 🇸🇻 (@nayibbukele) June 9, 2021
This is going to evolve fast! 🇸🇻 pic.twitter.com/1316DV4YwT
In a follow-up tweet, Bukele said, “Our engineers just informed me that they dug a new well, that will provide approximately 95MW of 100% clean, 0 emissions geothermal energy from our volcanos. Starting to design a full #Bitcoin mining hub around it.”
Earlier this month El Salvador became the first country in the world to make Bitcoin a legal tender but that effort has faced pushback from opposition leaders in the nation and the World Bank.
But President Bukele seems committed to the effort as he continues to retweet support for Bitcoin mining on his Twitter page.
Featured cover image credit: Creativan/Shutterstock.com
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Bitcoin was established as a ‘Peer to Peer’ method of transaction and has now morphed into this insane speculation of NOTHING!!!!!
This isn’t new –
The Dutch tulip bulb market bubble, also known as ‘tulipmania’ was one of the most famous market bubbles and crashes of all time. It occurred in Holland during the early to mid-1600s when speculation drove the value of tulip bulbs to extremes. At the height of the market, the rarest tulip bulbs traded for as much as six times the average person’s annual salary.