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Tuesday, December 5, 2023

Price losses on the crypto market: China increases pressure on banks

Cryptocurrencies like Bitcoin were under sustained pressure at the beginning of the week.

After price losses over the weekend, things continued to decline on Monday. Observers cited China’s increasingly tough course towards the new types of equipment as one reason. In addition, reference was made to the generally troubled mood on the financial markets.

The Bitcoin as a market strongest digital currency falls on Monday temporarily by about 10 percent to 31,965 US dollars. The second largest Internet currency , Ether , lost even more of its value and fell below the $ 2,000 mark. Other digital stocks such as XRP or Dogecoin also fell sharply .

China increases pressure on banks

China is tightening its course against private-sector cryptocurrencies such as Bitcoin. Domestic banks and the giant fintech company Ant Group have been asked to stop offering crypto trading services, the Chinese central bank announced in Beijing on Monday. Many digital systems reacted to the news with significant price losses.
The Chinese central bank announced that the banks had been informed of the route at a separate meeting. It was mainly about services that were used to speculate with crypto currencies. Such services disrupt the financial system and could be used for criminal activities such as money laundering. Not only should such services be discontinued, the payment connections to crypto trading venues should also be cut.
With the initiative, China is continuing its rigorous course against digital currencies such as Bitcoin and Ether. China’s government tighten the regulatory belt and take Bitcoin and Co. the air to breathe, commented crypto expert Timo Emden.
For days now, news from individual provinces has been piling up that action is being taken there against the digital production of crypto currencies. This so-called mining is considered to be environmentally harmful due to its high power consumption. The Chinese government is pulling the plug on the mining business, said Emden.
China has long been developing its own digital currency, the digital yuan. In contrast to private-sector crypto investments, this should be subject to the control of the state. Other countries are following similar paths, but the Chinese efforts are considered to be the most advanced.
The major cryptocurrencies have moved away from their record levels in the past few weeks: Bitcoin had risen to almost $ 65,000 in mid-April, while ether cost more than $ 4,000 for the first time a little later.

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The rather gloomy mood on the financial markets came under additional pressure on Monday. Bitcoin and other digital values ​​are considered risky asset classes that are mostly burdened by price losses on the stock markets. However, this connection is not clear, as some investors also see digital investments as a kind of gold substitute.
In any case, the major Internet currencies have moved significantly away from their record levels in the past few weeks. Bitcoin rose to almost $ 65,000 in mid-April, and ether cost more than $ 4,000 for the first time a little later. Compared to last autumn, however, the prices are still significantly higher.

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