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Bitcoin price saw a massive drop in price as China reconfirms its stance on Bitcoin trading and mining – cementing its pledge against the market.
Bitcoin price has been struggling to regain semblences of healthy following a rocky past month, dropping from an all-time trading value to hover around $45,000 USD. After gaining some value back earlier this week, the news from China has shattered the progress, breaking Bitcoin by 10% within minutes dropping the leading token to $37,000 USD.
China’s clamp down on Bitcoin
According to the statement released by the Chinese government, the nation plans to “focus on reducing credit risks, strengthen the supervision of platform enterprises’ financial activities, crack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.” This means that it will be looking to “maintain the smooth operation of the stock, debt, and foreign exchange markets, severely crack down on illegal securities activities, and severely punish illegal financial activities.”
This crack-down comes from China’s alleged plans to implement strategies to enhance and protect the economy with a three-step approach. As per the report:
- One is to further serve the real economy.
- The second is to resolutely prevent and control financial risks.
- The third is to continue to deepen reform and opening up.
The market responds
While Bitcoin might have experienced a 10% immediate knock, the token has proved to be resilient over time against this. Historically, Bitcoin has bounced back from lows after political news has rocked the market. Some of those within the industry don’t seem perturbed by the news either. WhalePanda, well-known for reporting and commenting on market news, noted that this might allow for a more transparent market.
Let China actually ban Bitcoin and Bitcoin mining.
Mining would be more decentralized, black market for Bitcoin would thrive and the “China controls Bitcoin” false narrative would disappear.
— WhalePanda (@WhalePanda) May 21, 2021