China makes all cryptocurrency transactions illegal after ordering the closure of bitcoin mining in Sichuan province, driving down crypto market prices in market capitalization
The cryptocurrency market is down 0.91% in the last 24 hours (3.30pm, Monday, January 10, 2022).
After a year of record gains and highs, cryptocurrencies are living a turbulent time with unpredictable price changes.
Bitcoin and other leading cryptocurrencies saw their share price drop after investors began dumping mining equipment as China announced new regulations.
- Bitcoin (BTC) -1.81% (£30,161.54)
- Ethereum (ETH) -2.66% (£2239.55)
- Tether (USDT) -0.05% (£0.74)
- Binance Coin (BNB) + 1.80% (£325.18)
- Solana (SOL) -3.06% (£100.46)
- Cardano (ADA) – 3.79% (£0.82)
- XRP (XRP) + 0.82% (£0.55)
- Earth (Moon) + 0.59% (£53.18)
- Polkadot (DOT) -3.61% (£17.45)
- Avalanche (AVAX) -0.50% (£61.93)
- Dogecoin (DOGE) -2.55% (£0.11)
- Shiba Inu (sheep) -3.85% (£0.000002010)
- Polygon (Matic) + 1.24% (£1.51)
It comes on the heels of Tesla’s recent meltdown, which radically shifted the acceptance of Bitcoin as payment for its products, and China clamped down on initial coin offerings, banned exchanges, and cautioned against speculation.
Another blow was dealt when China ordered a complete shutdown of bitcoin mining in Sichuan province and also told banks to stop supporting cryptocurrency transactions, in the latest wave of cryptocurrency restrictions.
Now China’s central bank, the People’s Bank of China, has effectively banned digital currencies after declaring all cryptocurrency transactions illegal.
The decision has already had an impact on the global crypto market.
Why is the cryptocurrency market going down?
China’s crackdown on cryptocurrency comes days after Musk’s surprise announcement.
Musk’s decision marks a sharp turnaround for Tesla, which only began accepting Bitcoin as payment for its services in February 2021.
This came after the electric car company bought $1.5 billion (£1.06 billion) of Bitcoin shares, which in turn sent the market price up for both the cryptocurrency and Tesla.
The billionaire businessman said: “We are concerned about the rapid increase in the use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any other fuel.”
Musk reiterated his belief that cryptocurrencies have a “promising future” but that they “cannot come at a huge cost to the environment,” in a Twitter post.
Musk has long been an advocate of cryptocurrency and Tesla’s decision has been felt throughout the market, with the price of other digital tokens dropping.
What is the price of bitcoin and ethereum?
Bitcoin was at £30,161.54 after the latest price drop (January 7), according to Coinbase.
Ethereum is now worth £2,239.55.
Cryptocurrencies are seen as an alternative to traditional banking methods, and are cheaper to transfer money because they are not regulated by the government or its banks.
Some viewed Tesla’s decision, which Musk announced, as slighting the credibility of cryptocurrencies to become a viable payment method for physical currencies.
What cryptocurrency prices have fallen?
Bitcoin wasn’t the only cryptocurrency that felt the initial effects, with most of the top ten seeing a drop in value.
Dogecoin, which was initially set up as a joke in 2012 before experiencing a sharp rise in its shares, also fell while Solana saw its market price rise more than 8%.
Musk’s influence cannot be underestimated because, while the likes of PayPal, Mastercard, and Facebook backed cryptocurrencies, Tesla’s announcement still rocked the market.
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