Bitcoin Value Plummets After China Issues New Bans on Cryptocurrency Transactions

While the cryptocurrency has risen since the opening of the New York stock market on Wednesday, it's still down 15 percent and below the $40,000 threshold.

bitcoin and bill

Photo Illustration by Thiago Prudencio/SOPA Images/LightRocket via Getty Images

bitcoin and bill

In just 24 hours, the value of Bitcoin plunged from $44,000 to as low as $30,202 after China announced preventative measures to crack down on the cryptocurrency, according to Coindesk.

While the currency is back up to $37,280 after the opening of the New York stock market today, it is still down 15 percent and below the $40,000 threshold. Similarly, Ethereum fell below $2,000, Ether to $2,430, and Dogecoin lost almost 26 percent, as Coindesk and Coinbase went through outages in response. 

This all follows Beijing banning payment companies and banks from providing crypto-related transaction services, the BBC reports. Crypto trading has been illegal in China since 2019, but people have still been able to trade online.

On Tuesday, 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, sharing that customers would have no protections if they dealt with losses. They also added that recent crypto price swings are disrupting the “normal economic and financial order.”

“The Chinese position on cryptocurrencies is clear from the beginning: trading and usage of cryptocurrencies are simply forbidden,” wrote Ipek Ozkardeskaya, senior analyst at Swissquote, as reported by CNN. “Therefore, the news is nothing ‘new,’ but given that crypto traders are too sensitive to negative news nowadays, it adds to the downside pressure on cryptocurrencies.”

The downward trend follows Elon Musk’s announcement that Tesla will not accept bitcoin payment for vehicles, as he cited sustainability concerns. The currency’s value subsequently fell 12 percent.

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