In the previous 24 hours, the crypto market has dropped 3.42 percent (9.50 am, Friday 17 December).
Cryptocurrencies are experiencing a volatile period with unpredictable price movements after a year of increases and new highs.
Following China’s announcement of new limitations, investors began selling mining equipment, causing Bitcoin and other top crypto coins to plummet in value.
It comes after recent market crashes triggered by Tesla’s decision to stop recognizing Bitcoin as payment for its products and China’s crackdown on ICOs, block exchanges, and warnings against speculative trading.
In the most recent wave of cryptocurrency restrictions, China instructed Bitcoin mining in the province of Sichuan to be fully shut down, as well as telling banks to stop supporting cryptocurrency transactions.
After declaring all cryptocurrency transactions illegal, China’s central bank, the People’s Bank of China, has officially banned digital coinage.
The judgment has already influenced the worldwide cryptocurrency market.
The Reason Behind the Market Price Drops
China’s crypto ban comes only days after Musk’s shocking declaration.
Tesla, which only began taking Bitcoin as payment for its operations in February 2021, has taken a sudden U-turn as a result of Musk’s decision.
It came after Tesla purchased $1.5 billion (£1.06 billion) in Bitcoin shares, sending the cryptocurrency’s and Tesla’s market prices skyrocketing.
Tesla, however, has removed Bitcoin mining as a customer option due to the environmental impact of the challenging process of minting new digital coins.
“We are concerned about the rapidly increasing use of fossil fuel for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” the wealthy entrepreneur added.
In a Twitter post, Elon Musk reiterated his opinion that crypto has a “promising future;” however, that it “cannot come at a great cost to the environment.”
Elon has long been a proponent of cryptocurrencies, and the Tesla decision sent ripples through the sector, with the value of other digital tokens falling.
Furthermore, the crypto sector is seeing celebrity-driven ads for trading platforms, despite a recent slump.
There are growing indications that cryptocurrency is on the verge of a major selloff. The Federal Reserve’s hawkish shift on Wednesday could hasten the process. Trading volumes for both NFTs and crypto are decreasing after recent highs, which is a significant indicator.
Moreover, since August’s highs, the total value of NFTs exchanged on markets has decreased. Melania Trump, the previous first lady of the United States, established her own NFT platform on Thursday, making her the most recent public figure to join the cryptocurrency craze.
Bitcoin and Ethereum Prices
Cryptocurrencies are viewed as a viable alternative to conventional banking techniques as they are less expensive to transfer money due to their lack of regulation by the state or its banks.
Some saw Tesla’s move, which was disclosed by Musk, as a knock-on crypto’s ability to become a viable payment mechanism against traditional currencies.
Which Currencies Are Down?
Bitcoin was not the only crypto coin to suffer from the first repercussions, as the majority of the top 10 all saw their prices fall.
Dogecoin, which began as a joke in 2012 before witnessing its value explode, has similarly plummeted in value, where as Solana’s market price has increased by over eight percent.
The Bottom Line
During the early hours of Friday, Ethereum was trading at $3,976.49, down two percent. Dogecoin has declined 3.7 percent in the previous 24 hours, trading at $0.174720, following yesterday’s trend. Shiba Inu fell, even more, dropping 3.5 percent to $0.00003295.
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