Bitcoin prices were continuously deteriorating and went down close to 11% on Friday afternoon, after China decided to double down its precautions to prevent the trade of cryptocurrencies, majorly Bitcoin, as it is a significant contributor to the overall cryptocurrency market trade. Furthermore, the Chinese Financial Stability and Development Committee chairman Lue, has voted against the use of bitcoin and stated that these cryptocurrencies need to be regulated more before they can be integrated and accepted to fit into the economy, already consisting of the digital currency Yuan and other centralized financial institutions within the country.
Since hitting the $65000 mark in mid-April, the cryptocurrency token value has gone down almost 45% from its peak value, closing at around $35000 yesterday. Tightening the ban on cryptocurrency and related trades is an attempt to cross out any fraud pertaining to the unregulated and decentralized trade market. China has been making multiple efforts to take down the cryptocurrency trade since 2013. The rival cryptocurrencies like ether also went down in per token price considerably to settle at $2,340 yesterday, facing a fall of 15%.
At earlier stages of Cryptocurrency trade, China was the major cryptocurrency mining and trading platform supplier, with over 80% of the worldwide cryptocurrency mining being done in China. However, the issue of extensive use of coal and other fossil fuels in the mining process was brought to light recently after Tesla and SpaceX CEO Elon Musk tweeted about the environmental concerns with the extensive mining and the ever-increasing carbon footprint as a result. The Chinese mining community uses Lignite, a type of coal in many processes, which contributes to carbon emissions extensively.
The Chinese authorities have decided against cryptocurrency after the U.S. Treasury Department announced a set of new rules that require large trade values to be recorded under the Internal Revenue, which minimizes the possibility of risks on cryptocurrency values leading to financial stability. In addition, unlike stock market and equity traders, the cryptocurrency trades operate 24X7, which leads to fluctuations constantly throughout the clock and dipping in the most unpredictable hours of trade.
The cryptocurrency trades will require to be licensed by city-specific market regulators. They will only be available for professional and large-scale investors and traders, according to reports by the government’s proposals to be presented on the matter of trade liberty. The small-scale traders and the public trading operations through various applications are in major turmoil after these statements by the Chinese authorities, as they will no longer be able to trade or invest in the cryptocurrency market with many regulatory authorities affecting the trading patterns.