Bitcoin has seen a drastic change after fallen below $ 40,000 for the first time in more than three months on Wednesday.
This unparallel change happened after China said that cryptocurrencies would not be allowed in transactions and warned investors against speculative trading with them.
The comments caused the value of the cryptocurrency to drop more than 10 percent. This would be another blow shortly after the one suffered following comments from tycoon Elon Musk and his car company Tesla.
Cryptocurrency trading has been banned in China since 2019 to prevent money laundering, as leaders try to prevent people from moving cash abroad. The country had hosted around 90 percent of the sector’s world trade.
And in a statement, three state-backed industry associations, the China National Internet Finance Association, the China Banking Association, and the China Payments and Clearing Association, said that “cryptocurrency prices have rocketed and tumbled, and speculative activities with cryptocurrency trading rebounded. ”
Price fluctuations “seriously violate the security of people’s assets and disrupt the normal economic and financial order,” said the statement, which was posted on social media by the People’s Bank of China.
The Chinese authorities warned consumers against wild speculation, adding that “losses caused by investment transactions are borne by consumers themselves,” as Chinese law does not offer them protection.
They reiterated that providing cryptocurrency-based financial products and services to customers was illegal for Chinese financial institutions and payment providers.
Bitcoin fell from $ 45,600 to $ 39,240 on Wednesday, its lowest level since early February, and well below last month’s record of $ 64,870. Analysts have warned that it could go as low as $ 30,000.
” This is the latest chapter of China tightening the rope around cryptocurrencies,” said Antoni Trenchev, managing partner and co-founder of London-based cryptocurrency lender Nexo.
And Saxo Markets’ Adam Reynolds added: “It comes as no surprise to me as Chinese capital controls can be challenged by purchases of cryptocurrencies in the country and transfers out of the country.”
“Therefore, avoiding its use in the country is essential to maintain capital controls.”
Bitcoin has had a turbulent few days. It took a heavy hit earlier in the week after Musk appeared to suggest that Tesla was planning to sell its huge holdings of the unit . And that came days after the electric car giant said it would stop using it in transactions due to environmental concerns.
China is in the midst of extensive regulatory crackdown on its fintech sector, whose major players, including Alibaba and Tencent, have been hit with large fines after being found guilty of monopolistic practices.
The central bank has also sought to promote its own heavily regulated digital yuan , which it is testing across the country in pilot schemes.
Mobile and online payments are already widely used by consumers, but the digital yuan could allow the central bank, rather than the big tech giants, to have more data and control over payments.
With information from AFP
See Cristiano Ronaldo Preferred Coach For Man United Job
Manchester United striker, Cristiano Ronaldo, wants Luis Enrique to take over the coaching job of Manchester United following the sacking...
This Is Worse For Me – Solskjaer Breaks Silence After Their Historic Match Against Liverpool, Says They Performed Poorly
Chelsea Vs Norwich: Why We Didn’t Stop Scoring – Tuchel
UCL: J Cole Reveals Chelsea’s Two Most Important Players
Ballon d’Or: Why Benzema Deserves The Title – Modric
Winning The Ballon d’Or Have Been One Of My Childhood Dreams – Benzema
Brazil Legend, Ronaldo Declares His Candidate For Ballon d’Or, Excludes Messi
Vusi Nova Retracts His Words, Says He Is Not Rebranding Or Changing His Stage Name
Recall that a few days ago we reported that Vusi Nova is rebranding his musical career and also changing his...
Nokwazi Reveals The Condition She Was Into When She Wrote Siyabonga Song
South African songstress, Nokwazi has disclosed the condition she was into when she wrote the viral Siyabonga song. The singer...
Khuli Chana Is Opening A New Studio, See The Interior View (Photos)
Khuli Chana is about to take his musical career to the next level as he reveals that he is opening...
Cassper Nyovest Drops 70K Pounds For A Gold Necklace Says It’s An Early Birthday Gift For Himself
South African rapper, Cassper Nyovest is living his life as he splashes a whopping 70,000 silver pounds for a gold...
Sonia Mbele Is Now A New Business Owner – See The Business She Ventured Into!
South African actress, Sonia Mbele have decided to spread her hand into multiple chains of business as she ventures into...
Keep Chasing Those Dreams & Keep Winning – Simz Ngema Applauds Self
South African actress, Simz Ngema has taken time to applaud herself with an appreciation message via her official Instagram page....
A spooky Christmas tree set up in a Canadian shopping mall sparks outrage among locals
A large Christmas tree measuring 15 meters was set up in a shopping mall in Canada. A huge face with...