After the China central bank declares that all crypto transactions are illegal, a Bitcoin price crash occurs. Will the market recover quickly after China ban?
China continues to crack down on Bitcoin and the entire crypto sector. Now China is declaring that all cryptocurrency transactions are illegal. The state with around 1.4 billion inhabitants is thus positioning itself completely against the crypto sector.
No cryptocurrency is allowed to circulate in the market, according to the People’s Bank of China on its website. The PBOC continued to explain that all crypto transactions are therefore unauthorized financial activities.
Bitcoin price crashed below $41,000
Even if there are regular negative reports from China, investors are always put under pressure by such news – especially concerning the statements of the SEC or the Evergrande crisis.
After the Bitcoin price had recovered the day before and moved toward the $45,000 mark, the oldest cryptocurrency fell significantly to $40,900 within a few hours.
A few days ago, the crisis surrounding the Chinese real estate group Evergrande suffered a short-term price slide to below $40,000, but quickly recovered from this.
The Bitcoin rate is currently around $42,000. The next few days should show whether the support at the lower limit is sufficient to sustain the 40,000 US dollar limit.
Most recently, Bitcoin rose from $29,000 to nearly $53,000 between July 20, 2021, and September 7, 2021. Above all, this can be linked to the introduction of bitcoin as a legal tender in El Salvador on September 7, 2021.
Negative reports from China have been the norm for years
It’s not the first time China has positioned itself against cryptocurrencies. In the past few years, there have been reports of a crypto ban in Asian countries.
But the Chinese government has never positioned itself against cryptocurrencies as strongly as this year. So were Bitcoin mining centers in the country forced several months ago to close. Since then, mining companies have been looking for new locations, especially in North and Latin America.
In particular, the Bitcoin mining centers in China were a factor in the fact that negative news from China had a powerful influence on the Bitcoin price. Most recently, the attitude of China, together with Elon Musk’s sudden change of heart around the energy balance of Bitcoin in May 2021, led to an enormous price drop to below $30,000.
In addition, with 1.4 billion inhabitants, China is the largest country in the world in terms of population, so there is a huge market for digital products here.