China made all crypto currency transactions illegal after China ordered the closure of bitcoin mining in Sichuan province, causing crypto market prices to go down in market value.
The cryptocurrency market is down 4.92% in the last 24 hours (at 11.45 am, February 22, 2022).
After a year of gains and record highs, cryptocurrencies are enduring a turbulent time with unpredictable price changes.
As soon as China announced the new regulations, investors started dumping mining equipment, with bitcoin and other major crypto coins experiencing a significant drop in the share price.
- Bitcoin (BTC) +0.33% (£27,695.18)
- Ethereum (ETH) -0.43% (£1,908.88)
- Tether (USDT) +0.30% (£0.74)
- Binance Coin (BNB) -3.16% (£268.18)
- XRP (XRP) -9.03% (£0.52)
- Cardano (ADA) -6.20% (£0.64)
- Solana (SOL) -3.49% (£62.70)
- Terra (Luna) +1.98% (£37.71)
- Avalanche (AVAX) -5.58% (£53.06)
- Dogecoin (DOGE) -4.32% (£0.0952)
- Polkadot (DOT) -1.15% (£11.99)
- Shiba Inu (SHIB) -4.26% (£0.00001800)
- Polygon (MATIC) -5.45% (£1.06)
It follows the recent mishaps after Tesla took a U-turn on accepting bitcoin as payment for its products, and China closed initial coin offerings, on block exchanges, and warned against speculative trading.
Another setback came when China ordered a complete shutdown of bitcoin mining in its Sichuan province and also asked banks to stop supporting crypto transactions in the latest wave of restrictions on crypto.
Now the country’s central bank, the People’s Bank of China, has effectively banned digital coins after declaring all cryptocurrency transactions to be illegal.
The decision has already had an impact on the global crypto market.
Why is the crypto market down?
China’s crackdown on cryptocurrency comes days after Musk’s shocking announcement.
Musk’s decision marks a swift U-turn for Tesla which began accepting bitcoin as payment for its services in February 2021.
This came after Tesla purchased $1.5 billion (£1.06 billion) in bitcoin shares, boosting the market capitalization of both crypto and Tesla.
However, due of the negative environmental impact of bitcoin mining – a complex process for manufacturing new digital coins – Tesla has removed this option from customers’ options.
The billionaire entrepreneur added: “We are concerned about the rapidly increasing use of fossil fuels for bitcoin mining and transactions, particularly coal, which has the worst emissions of any fuel.”
In a Twitter message, Musk maintained his optimism in the cryptocurrency’s “promising future,” but cautioned that it “may not come at a tremendous cost to the environment.”
Musk has long been an advocate of cryptocurrencies and Tesla’s decision was felt throughout the market, with other digital tokens crashing in price.