Bitcoin Plummets To Below $30,000 Amid China Crackdown

The wide ride of Bitcoin valuations continues, amid the ongoing clampdown on cryptocurrencies by Chinese authorities.

On Tuesday the value of Bitcoin fell below $30,000 for the first time in more than five months, mostly because of the ongoing crackdown in China on the world’s most popular cryptocurrency.

Last year China accounted for 65 percent of all Bitcoin production worldwide, but the country’s State Council in May vowed to clamp down on bitcoin mining and trading as part of a long-running policy.

Bitcoin value

Last week regional authorities in China began cracking down on Bitcoin and cryptocurrency mining projects, after financial institutions and payment companies were banned from providing services related to crypto transactions.

Its crackdown extended to the southwestern province of Sichuan, a region known for its rich hydropower resources (and hence home to many cryptocurrency mines), when an order was issued to halt all Bitcoin mining in the province.

Then on Tuesday it emerged that the People’s Bank of China had summoned a number of major banks and lenders to tell them they must not provide crypto-related services.

All of this prompted the digital currency to fall down $28,890, which represents a staggering 50 percent fall in value since it reached an all-time high of $64,870 in April.

However on Wednesday morning Bitcoin recovered 7.8 percent to $34.039 in value.

The value of Bitcoin remains highly volatile, and it has undergone several massive price drops (and rises) during its existence.

For example, it was trading at only $7,000 in April 2020.

Bitcoin supporters

But despite this Bitcoin has its supporters and champions.

Earlier this month El Salvador became the first country in the world to accept Bitcoin as legal tender, after that country’s legislator approved President Nayib Bukele’s proposal to embrace the cryptocurrency.

But following that, the World Bank rejected a request from El Salvador to help with the implementation of Bitcoin as legal tender.

Meanwhile auction house Sotheby’s said this week that an auction of a rare pear-shaped diamond that is expected to sell for as much as $15m, can be purchased using cryptocurrencies.

It is the first time that such a large diamond can be purchased with cryptocurrency.

Bitcoin opposition

Yet cryptocurrency is still viewed with concern by senior officials in Western nations.

Last month for example the governor of the Bank of England (BoE), Andrew Bailey, said cryptocurrencies “have no intrinsic value” and people should only buy cryptocurrencies if they are prepared to lose all their money.

BoE governor Bailey then one step further and said cryptocurrencies and similar assets were a danger to the public.

“Crypto-assets,” as the central bank’s official labels bitcoin and the rest, present a danger to the public, Bailey told the British Parliament’s Treasury Committee.

It should be remembered that the Bank of England in September 2014 had warned that Bitcoin could pose a threat to financial stability in the UK should it see widespread adoption.