Bitcoin and other cryptocurrencies have seen a massive crash today, which is bad news for investors.
The crash follows another blow to the cryptocurrency market after Elon Musk and Tesla announced they would no longer accept payments with Bitcoin.
Now, however, the prices of Bitcoin and other crypto tokens have dropped even further today – and much of it comes from China.
But the question is whether or not China actually banned the cryptocurrency and did this cause the crash?
There is a lot of confusion and it seems like it is making a huge impact in the market, but recent news has obviously caused panic among those holding the coin.
Here’s everything we know about the Bitcoin crash and whether or not China banned cryptocurrency.
Has China Banned Cryptocurrency?
China’s stance on cryptocurrency is nothing new and has been against the concept for some time. It hasn’t “banned” cryptocurrency per se, but it does seem that China is firmly against it.
CNBC points out that in 2017 the authorities closed the local cryptocurrency exchange and banned so-called ICOs (Initial Coin Offerings), a way for companies in this area to raise money by issuing new digital tokens.
Traders in China once had a large stake in the Bitcoin market, but after the crackdown, their influence was significantly reduced. Chinese cryptocurrency operations have been relocated abroad.
“The crypto markets are currently processing a cascade of messages fueling the bear for price developments,” said Ulrik Lykke, executive director of the crypto hedge fund ARK36.
In the Bitcoin market alone, more than $ 250 billion evaporated last week, Lykke said. While that number seems “astronomical,” such moves are not uncommon in the volatile crypto market, he added.
A new announcement has now been made from Beijing that has banned financial institutions and payment companies from providing services related to cryptocurrency transactions.
It also warned investors against speculative crypto trading.
Three government-sponsored organizations, including the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China, issued a warning on social media.
They said consumers would have no protection if they suffered losses from investment transactions in cryptocurrency.