Bitcoin price fell below $34,000 in three months after China imposed new sanctions on cryptocurrencies.
Earlier, the Chinese government banned banks and payment institutions from providing services related to cryptocurrency transactions.
In addition, on the 18th, he warned investors not to trade in speculative cryptocurrencies.
The bitcoin price fell more than 10% after Tesla announced last week that it will no longer accept bitcoin for car sales.
On the afternoon of the 19th, Bitcoin fell 10.4% to $38,131, but showed a slight recovery.
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Meanwhile, Ether, which serves as the fuel for the Ethereum blockchain network, and other digital crypto currency prices such as Dogecoin fell by 22% and 24%, respectively.
At the same time, Tesla shares fell more than 3% on Wall Street in the United States, likely due to Tesla’s decision not to accept bitcoin from customers in the future.
Tesla, owned by Elon Musk, still holds about $1.5 billion worth of cryptocurrencies.
China’s pressure
China has made cryptocurrency trading illegal since 2019 to curb money laundering. But people can still trade online with currencies like Bitcoin, which has raised concerns in the Chinese government.
State-owned institutions such as China Internet Finance Association, China Banking Association, and China Payment Business Association issued warnings through social media on the 18th.
They said that consumers would not be protected at all if they lost money on their cryptocurrency investment.
In addition, he added that the recent surge in cryptocurrency prices “severely undermines the safety of people’s assets” and disrupts the “normal economic and financial order”.
“China has been putting pressure on the cryptocurrency market for a while now, but it’s getting stronger now. As central banks develop their own digital currencies, several countries are turning to China,” said Neil Wilson, an analyst at financial trading platform Markets.com. It can also follow the pressure policy of the
“So far, Western regulators haven’t really sanctioned Bitcoin,” Wilson said.
Tesla rejects bitcoin
In March, Tesla CEO Elon Musk made a surprise announcement that he would allow customers to buy cars with Bitcoin.
But last week, he withdrew his plans and stopped selling vehicles using Bitcoin, citing environmental concerns.
His concern is with bitcoin mining. Mining refers to an energy-intensive process in which digital currency is created using high-performance computers. This process relies primarily on fossil fuels, particularly coal, for power generation.
“We are concerned about a surge in the use of fossil fuels used to mine and trade bitcoin, especially coal, which is the most emitting carbon dioxide,” Musk wrote on Twitter.
He also left this: “Cryptocurrency is a good idea…but it cannot be realized until it pays a huge price for the environment”.
Musk also said that Tesla has no intention of selling Bitcoin and is willing to resume trading in cryptocurrency once mining shifts towards using more sustainable energy sources.
Despite the ban on bitcoin trading in China, more than 75% of the world’s bitcoin mining takes place in China.
Analysis: Rory Celan-Jones Technical Correspondent
For those who have been watching the cryptocurrency scene for a while, what has happened in recent weeks is a familiar story.
In one random event, Elon Musk’s tweet that Tesla would accept cryptocurrency payments, Bitcoin hit all-time highs, and people began to comment that Bitcoin payments were accepted by the mainstream.
After that, another random event occurs, which is again a notice of cancellation from the volatile Tesla tycoon. Bitcoin is collapsing again, and the story that it will become the mainstream disappears into the background.
Last month, in a chat room held in a clubhouse (another phenomenon that was once booming and now on the verge of collapse), I shared my skepticism about cryptocurrencies.
During our conversation, a high-ranking person from a thriving fintech sector in London suddenly appeared.
“Crypto is becoming a recognized asset class,” he said, shouting my name, “Lori, Lori.”
There was a genuine impression, at least in April, as big city financial institutions took an interest.
But this week, the mood has changed, with the Financial Times, an economic magazine, reporting “new doubts among institutional fund managers about the future of cryptocurrencies as an asset class.”
I recalled my first interest in Bitcoin in 2013. In the evening program ‘PM’ on BBC Radio 4, I reported this. I bought a pizza with 0.5 BTC, but it was a painful process because it didn’t seem worth the 30 pounds (about 48,000 won), which was the exchange rate at the time. Of course, the pizza was £14,000 at today’s exchange rates.
Also, I wrote a blog post titled ‘Bitcoin Bubble’, in which I wanted to learn what we need to know from a time when the price of cryptocurrencies surged from $15 to $276 and then fell again.
In this article, I compared cryptocurrencies with 17th-century Dutch tulips or London houses in the 1980s, and ended up like this: “If it’s impossible to use Bitcoin to buy sandwiches or pay off friends after eating out, then Bitcoin is likely to remain just a playground for geeks and gamblers.”
Eight years have passed since then, and you still can’t buy a sandwich with Bitcoin.
Also, like I did, it is likely to be ridiculed in a few years for giving away assets that continue to soar in value, so why bother buying things with Bitcoin?
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