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Bitcoin dips sharply as China broadens ban

webdunia
Monday, 21 June 2021 (17:36 IST)
Bitcoin dropped in value by more than 10% Monday to below $33,000 at one point, as China expanded its ban on cryptocurrency mining to a key southwestern province.

Beijing turned its eye to Chinese crypto mines that have so far powered the rise of the popular internet investment by powering down operations in Sichuan province.

As a result, the perennially volatile price of bitcoin sank to a 12-day low, plummeting further from the record high of $65,000 it hit in April, partly as a result of the Chinese crackdown. A smaller cryptocurrency rival, known as ether, dropped below $2,000 in value for the first time since May 23.

What has China done?

Authorities published a ban on cryptocurrency mining in a notice widely circulated on Chinese social media and confirmed by a former bitcoin miner.

It ordered power companies to stop supplying cryptocurrency miners with electricity by Sunday.

Vowing a "complete clean-up" the notice ordered local governments to put into action a "dragnet-style investigation" to search and end all suspected crypto mining.

Why is a global crypto mining giant changing tack?

The Far East Asian superpower hopes to stamp out financial risks from speculation with the move.

The mountainous Sichuan region has large amounts of electricity from its hydropower plants needed to run the cryptocurrency mining operations, but there are still environmental concerns over its high energy usage.

The sparsely populated province is only second to Xinjiang province as China′s crypto mining capital.

Authorities have recently shut down other operations in the regions of Inner Mongolia and Qinghai, with people being asked to report illegal cryptocurrency mining activity.

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