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Bitcoin plummets again as China moves against crypto

Bitcoin at lowest level since February

The price of bitcoin plummeted again overnight to its lowest level since February after regulators in China came down on the use of cryptocurrencies by financial institutions.

The crash took the price of bitcoin to below £28,000, and occurred alongside a slump in the wider crypto market.

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According to a statement by the People’s Bank of China, cryptocurrencies should not be used in financial markets or the wider economy because they are not “real” currencies.

“This is the latest chapter of China tightening the noose around crypto,” Antoni Trenchev, managing partner and co-founder of Nexo in London, a crypto lender, told Bloomberg.

China’s attempts to limit the rise of crypto comes as it prepares the launch its own digital currency.

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“Part of it is they have their own digital renminbi, part is the lack of control in terms of cash outflows and part of it is trying to make sure people don’t get scammed,” said Paul Haswell, a partner at law firm Pinsent Masons in Hong Kong, of China’s crackdown. 

The news comes soon after the price of bitcoin plummeted over the weekend as Elon Musk ramped up his criticism of the cryptocurrency, before confirming Tesla has not recently sold any of its holding.

Neil Wilson of Markets.com told The Guardian that crytpocurrency’s latest price volatility proves that it is a bubble. 

“A nice pop, but this is small versus the Musk-induced selling that has been taking place lately. In addition to Tesla saying it would stop accepting Bitcoin as payment, Musk indicated in a reply to a tweet that the company was dumping or had already dumped all its Bitcoin. Prices fell sharply over the weekend and at $44k the crypto asset is still down by around a third from the all-time high near $66k set in April,” said Wilson.

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