As the cryptocurrency market recovered from the crash it suffered in April–May — primarily because of tightening Chinese regulation on trading and mining of cryptocurrencies — another round of crackdown by China has left the market in the red. Chinese regulators intensified their hammering down of these digital assets, imposing a blanket ban on all cryptocurrency transactions and mining in the country this week. As a result, more than $400 million (roughly Rs. 2,952 crores) worth of crypto coins were liquidated within a day. This renewed effort to contain cryptocurrency trade resulted in top currencies such as Bitcoin and Ether losing significant value.
According to data from Bybt, a cryptocurrency trading and information platform, more than $418 million (roughly Rs. 3,085 crores) were wiped off the market. At the time of writing, as per Bybt data, more than $326 million (roughly Rs. 2,406 crores) were liquidated by 80,563 traders in the past 24 hours, meaning the initial panic was giving way for stability. The largest single liquidation order happened on Okex-BTC with a value of $6.82 million (roughly Rs. 50 crores).
On Friday, shortly after People’s Bank of China made crypto trading illegal and said it planned to severely punish anyone doing it, Bitcoin lost more than $3,000 (roughly Rs. 2.21 lakhs) within an hour. At one point, it slid below $41,000 (roughly Rs. 30.26 lakhs) but has since recovered to $42,733 (roughy Rs. 31.54 lakhs), according to CoinMarketCap.
China’s crackdown began this year when authorities started warning banks to halt transactions related to virtual currencies and shut down much of Bitcoin mining activities operating in the country.
This had resulted in the crash in April-May, when, for instance, Bitcoin depleted to below $30,000 (roughly Rs. 22 lakhs). It gradually recovered and had breached the $50,000 (roughly Rs. 37 lakhs) mark by August end. But this renewed focus on curtailing cryptocurrency-related activities has again led to fears among investors whether the market is headed for a bearish turn.
Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.
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