Berita 24 English - Bitcoin extended its losses on Friday afternoon, falling more than 11% after China stepped up efforts to prevent specul...
Berita 24 English - Bitcoin extended its losses on Friday afternoon, falling more than 11% after China stepped up efforts to prevent speculative and financial risks by cracking down on mining and trading of the largest cryptocurrency.Financial China's Stability and Development Committee, chaired by Vice Premier Liu He, singled out bitcoin as an asset that requires increased regulation. The world's largest and most popular cryptocurrency recently fell 11.59 percent to $35,928 after spending the majority of the Asian and London sessions above the $40,000 mark. Bitcoin has fallen roughly 45 percent since reaching an all-time high of just under $65,000 in mid-April. It is down about 28% this week.
The statement, which came days after three Chinese industry bodies tightened their ban on banks and payment companies providing crypto-related services, marked a significant step forward in the country's campaign to eradicate speculation and fraud in virtual currencies.
Liu is the highest-ranking Chinese official to issue a public directive ordering a crackdown on bitcoin. This is the first time the government has taken a direct stance against cryptocurrency mining.
"It's difficult to gauge the true impact of China's potential actions because these statements lack specifics," said John Wu, president of Ava Labs, an open-source platform for financial applications.
"However, this statement demonstrates the clear danger of bitcoin mining being so reliant on China and the government's will."
According to government proposals to be presented later this year, cryptocurrency exchanges operating in Hong Kong will be required to obtain a license from the city's markets regulator and will be limited to providing services to professional investors.
Earlier on Friday, China's state broadcaster CCTV issued a warning on its website about the "systemic risks" associated with cryptocurrency trading.
"Bitcoin is no longer a risk-averse investment; it is a speculative instrument," CCTV reported, adding that the cryptocurrency is a loosely regulated asset that is frequently used in black market trade, money laundering, arms smuggling, gambling, and drug dealing.
Ether, a rival cryptocurrency, also came under pressure, trading down about 15% to $2,339 at the time of writing.
"China has attempted to shut down bitcoin, exchanges, and mining so frequently since 2013 that I don't believe this should come as a surprise," said Ruud Feltkamp, CEO of crypto trading bot Cryptohopper.
"I'm skeptical that it will have a significant long-term effect on bitcoin."
China's latest anti-crypto campaign follows the U.S. On Thursday, the Treasury Department called for new rules requiring large cryptocurrency transfers to be reported to the Internal Revenue Service, while the Federal Reserve raised concerns about the risks cryptocurrencies posed to financial stability.
"Nerves remained heightened, and I don't see liquidity being any deeper on Saturdays and Sundays than it is Monday through Friday, especially in light of the previous week," said Jeffrey Halley, senior market analyst at OANDA.
"Weekend headline risk may trigger another extended period of wealth destruction for weekend warriors."
Bitcoin markets operate 24 hours a day, 7 days a week, setting the stage for wild price swings at unpredictable hours, driven by retail and day traders.
