scorecardChina's FUD drags down Bitcoin, Ether and other cryptocurrencies yet again
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China's FUD drags down Bitcoin, Ether and other cryptocurrencies yet again

China's FUD drags down Bitcoin, Ether and other cryptocurrencies yet again
Investment5 min read

  • The Asian dragon has reiterated its tough stance on cryptocurrencies yet again declaring all crypto-related activities as ‘illegal’.
  • In the process, the crypto market has ended up in the red after barely managing to recover from the fear, uncertainty and doubt (FUD) caused by the Evergrande crisis.
  • Bitcoin is down by more than 5% amid the market reaction and even Avalanche could not evade the dip.
China’s central bank has reiterated its tough stance on cryptocurrencies, yet again, and it’s dragging the crypto market back into red. Bitcoin, Ethereum and others had just barely recovered from fear, uncertainty and doubt (FUD) of the Evergrande crisis, which followed September’s first dip seen during El Salvador’s launch of its Bitcoin Law on September 7.


Historically, September is always a low month for cryptocurrencies, especially during the year which follows a ‘halving’ event — it’s when the reward for mining Bitcoin is cut in half and it happens every four years. The trend was seen after the first halving event in 2012 and after the second one in 2016.

However, what makes the FUD in the market different this time is China’s relentless crackdown on private cryptocurrencies.


China’s central bank declares all cryptocurrency-related activity to be illegal
On September 24, the People’s Bank of China (PBOC) reiterated that it considers all crypto-related activity to be illegal during a Q&A session on its website. It highlighted that crypto trading, order matching, token issuance and derivatives for virtual currencies are not in compliance with the country’s laws.

Moreover, employees working for crypto exchanges that are not based out of China will be investigated.


The statements, although not entirely new, rocked the crypto market. The overall market cap is down by 5.6% as compared to yesterday at 5:45 pm Indian Standard Time (IST). Bitcoin, Ethereum, Binance Coin and other large cryptocurrencies are in red — barring stablecoins like Tether and USDC.

Even Avalanche's AVAX token, the blockchain platform which was recently seen rallying despite the market downturn due to $230 million in funding, was not spared either.

Cryptocurrency

Price

Percentage change in the last 24 hours

Bitcoin

$41,173

-5.43%

Ethereum

$2,814.79

-8.07%

Cardano

$2.20

0.17%

Binance Coin

$342.82

-7.74%

XRP

$0.911

-7.05%

Solana

$133.93

-7.06%

Polkadot

$29.32

-4.89%

Dogecoin

$0.203

-7.39%

Avalanche

$69.70

-8.8%

Source: Coinmarketcap as of 5:45 pm Indian Standard Time (IST)

China can’t keep away from drilling down on the ‘perils’ of cryptocurrencies
China isn’t a fan of cryptocurrencies and that secret has been out of the box since 2017. However, each announcement by the Chinese government in the years that followed have expanded the scope of the so-called ‘ban’.


What started off as a simple move restricting initial coin offerings (ICOs) has expanded to banning crypto exchanges, crypto mining and really any service, including news reporting, that has to do with cryptocurrencies.

This year has been especially harsh with Bitcoin and other cryptocurrency miners having to move out of the country in order to continue operations.

SEE ALSO:
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Evergrande’s impact on Bitcoin highlights how cryptocurrencies still have growing pains

Three reasons why this might be a good time to buy Bitcoin

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