Key Takeaways
- Bitcoin and the rest of the crypto market turned negative today as news of China’s regulatory crackdown surfaced.
- The country’s Vice Premier and state council have pledged to introduce tighter crypto regulations.
- The Inner Mongolian province has also announced a whistleblower program for reporting on BTC miners.
Bitcoin investors have panicked for a third consecutive day, sending the asset 12% into the red. Today, it’s because China has sent out another warning to the crypto industry, specifically targeting miners.
China Issues Another Warning
Bitcoin’s week of negative trends continues.
At 10:10 am EST Friday, reports that the Chinese Vice Premier, second to the President, Liu He, had vowed to curb the mining business in the country jolted the cryptocurrency market. He hosted a meeting with China’s state council, after which a statement calling for a crackdown was posted on the Chinese government’s website.
Today is the third consecutive day where the market has seen flash crashes driven by regulatory news.
Bitcoin suffered its worst dip since March 2020 on Wednesday, as the news that China would increase its oversight on crypto trading helped the asset hit lows of around $30,000.
The U.S. Treasury then announced its plans to make crypto users report transactions worth over $10,000 to the IRS. If implemented, the ruling would begin in 2023. Bitcoin dipped 8% from $41,500 to $38,100 within an hour of the news breaking.
The astronomical price rises of cryptocurrencies like Bitcoin have recently led to increased government oversight of the space worldwide.
Reports of China ramping up efforts to curb the crypto market have been coming all week. Local authorities have also attempted to introduce new checks on trading and mining. China is known for its opaque approach to cryptocurrencies; in previous bull cycles, regulatory fears over China enforcing a Bitcoin ban have sent the market into panic.
Prior to today’s announcement, the Financial Times reported yesterday that the Inner Mongolian province, which announced a ban on Bitcoin mining last month, had set up a dedicated whistleblower hotline to “comprehensively clean up and shut down” mining operations in the region. The region houses around 7% of the country’s Bitcoin mining operation and is especially busy during the dry season.
In addition to the He update, Hong Kong, the special administrative region of China, also reiterated its legislative proposal that will allow only professional traders with a portfolio of over HK$8 million ($1.03 million) to trade on licensed cryptocurrency exchanges.
Bitcoin was last trading at $37,300 on Bitstamp. The second-largest cryptocurrency Ethereum was down 11.3% to lows of $2,450. The losses across other altcoins were more severe, down in double-digit percentages.
