Bitcoin falls 7% after China reportedly bans banks from cryptocurrency business
Bitcoin's recovery from Monday's sell-off lost steam on Tuesday after Reuters reported that China banned financial companies from the cryptocurrency business.
- A statement from China regulators said virtual currencies "are not supported by real value," the report said.
- China has not restricted individuals from holding
cryptocurrencies, but did warn about their speculative nature.
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Three Chinese industry bodies released a statement warning investors about the speculative and volatile nature of cryptocurrencies, adding that they "are not supported by real value," according to the report.
Those three industry bodies were the National Internet
The statement also said cryptocurrency prices can be easily manipulated, according to the report. China has banned initial coin offerings and crypto exchanges, but does not restrict individuals from holding them.
US companies are pouncing on the opportunity in cryptocurrencies, with Square's CashApp and PayPal's Venmo facilitating the buying and selling of bitcoin. Banks have created trading desks and funds dedicated to bitcoin.
Bitcoin's volatility has been on full display in recent days, as Tesla CEO Elon Musk sparked a near 20% sell-off in the cryptocurrency after the EV company stopped accepting it as a form of payment. Several tweets from Musk also cast doubt on his bullishness on bitcoin, as he questioned its high energy consumption needs.
Read more: 'Wolf of All Streets' crypto trader Scott Melker breaks down his strategy for making money using 'HODLing' and 100X trade opportunities - and shares 5 under-the-radar tokens he thinks could explode
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