Bitcoin Prices Falter on China Crackdown

Written by Bryan Shin

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November 22, 2019

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Bitcoin prices slumped on Friday after China’s central bank launched a crackdown on cryptocurrencies, warning of risks with issuing or trading them, according to Reuters.

Bitcoin touched as low as USD 6,929 early morning on Friday, representing a 9% decrease. Moreover, it marks the lowest point since May when it reached USD 7,107.

The People’s Bank of China’s Shanghai headquarters said it would tackle growing cases of illegality involving virtual currencies. Additionally, it also warned investors not to confused cryptocurrency with blockchain technology.

The announcement came a day after Shenzhen regulators launched a similar initiative and came after the PBOC prepares to launch its own cryptocurrency.

Last month, Chinese President Xi Jingping said that China would look into accelerating the development of blockchain technology. 

Jamie Farquhar, portfolio manager at London-based crypto firm NKB Group, said the PBOC statement crystallized a growing sense among crypto investors that China’s embrace of blockchain would be unlikely to include cryptocurrencies like bitcoin, according to Reuters.

 “It’s the realization that the positivity over Xi’s blockchain announcement was exaggerated,” he said. “It may not include bitcoin at this point.”

Since Monday, bitcoin prices have slumped as much as 18.4% from the 5-day high of USD 8,500.01. 

Bitcoin hit a sharp rebound in late October, when prices bounced from USD 7,430.87 on October 24 to USD 9,548.84 just three days later. However, after hitting the 30-day high, prices quickly pulled back. 

Similarly, the rest of the cryptocurrency market also witnessed crashes. Ethereum fell by 4.66% during late Friday afternoon, while XRP slipped by 3.39%. Bitcoin Cash fell the most by 7.36%.

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