Since the first on May 19, negative news from the Chinese government about Bitcoin has been coming in succession.
In 2019 Beijing already outlawed cryptocurrency trading to prevent money laundering, although this measure did not stop citizens from continuing to invest in cryptocurrencies.
Current regulations in Beijing have put Bitcoin in check.
The news we have been able to read in previous days about the restrictions on cryptocurrencies in China have been basically two:
On the one hand, China will take energetic measures on Bitcoin mining. Chinese miners represent more than 75% of the Bitcoin mining network. The restrictions are aimed at reducing carbon emissions in the country. These data suggest that the Asian country will no longer be attractive for the development of cryptocurrency mining.
On the other hand, several Chinese associations, among which we highlight the China National Internet Finance Association, the China Banking Association and the China Payments and Clearing Association, have warned cryptocurrency investors that given the volatility they represent, they constitute a risk for all investors who could lose their money and have no protection against any loss. They also claim that cryptocurrencies seriously violate the normal economic and financial order.
Weekly price drops of the 5 most important cryptocurrencies
Since May 17 these are the price drops suffered by the five cryptocurrencies with the largest market capitalization:
- Bitcoin registers -20% in one week and currently trades at $36,500.
- Ethereum has suffered -36% in the last week and trades at $2,260.
- Cardano is down 34% and trades at $1.45
- Binance Coin has suffered a 46% drop in price and trades at $289
- Dogecoin, Elon Musk’s fetish coin has fallen 36% and trades at $0.33
How have other countries acted against cryptocurrencies?
Unlike China, the United States has not spoken out against cryptocurrencies. Large financial firms such as Goldman Sachs and JPMorgan are considering including these types of investments among their wealth management options. In addition, we have recently seen the IPO of Coinbase, an exchange for the exchange and trading of cryptoassets.
In Europe, the ECB (European Central Bank) has pointed out the risk of cryptocurrencies due to the extreme volatility and high carbon footprint. Although it has also stated that the risk to financial stability was limited due to the low exposure to these digital currencies.
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