Bitcoin remains at a minimum of three months after a rocky 24-hour period, which has so far erased more than 15% of its value and taken away many other cryptocurrencies. While volatility is a trademark of cryptocurrencies today, this sudden drop is related to recent statements by China’s major banking and financial institutions about whether Bitcoin is a good investment.
Spoiler: China thinks not.
China's financial institutions announced on Tuesday afternoon a ban on payment companies from "providing services related to cryptocurrency transactions," including trading, clearing, recording and settlement operations (through CNBC). This does not prevent an individual from owning a number of bitcoins, but it could make life difficult for Bitcoin investors.
The People's Bank of China also stated that the virtual currency "is not a real currency" and that "it should not and should not be used as a currency in the market," according to a publication in its official account in the WeChat messaging application (via Financial Times), an account the bank created in 2019 to better communicate with the public.
Apparently as a result of these statements, Bitcoin has crashed below $ 40,000 for the first time since February and has taken on other popular currencies, such as Ethereum, popular with GPU miners.
The value of Ethereum is currently around $ 2,500, despite tracking more than $ 4,000 earlier this month (information from CoinDesk).
In the past, China has shown a disdain for cryptocurrencies in general, despite one reported 75% of the world’s bitcoin mining happening within its borders. The country had previously moved to block bitcoin exchanges in 2017 and further limit exchanges and websites of initial currency bids in 2019. You can see today’s statement as a reiteration of its previously tough stance. in the formalization or legitimation of cryptocurrencies in the country's financial institutions.
This is Bitcoin falling in value and Ethereum says it wants to abandon GPU mining in the “coming months”. How much will it help to get a graphics card on your gaming PC? Perhaps, and even more so, if the profitability of cryptocurrencies really drops. However, it’s important to remember that Bitcoin has long since moved away from graphics cards as a mining mode.
However, for today, it seems that the most popular cryptocurrencies can withstand the storm, as the edge of the fiscal cliff that was the price of Bitcoin has relaxed its early hours.