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Bitcoin Drops $2K as China Declares Cryptocurrency-Related Business Illegal
Bitcoin erased Thursday’s 3% gain as PBOC stepped up its crackdown on crypto
Updated May 11, 2023, 5:28 p.m. Published Sep 24, 2021, 10:03 a.m. 1 min read
China strengthened its anti-crypto stance on Friday, torpedoing bitcoin’s two-day winning run.
The People’s Bank of China (PBOC) said bitcoin, ether and stablecoin tether do not qualify as legal tender and cannot be used in the currency market.
The central bank declared all virtual currency-related activities illegal, including derivative transactions and overseas virtual currency exchanges serving Chinese residents.
Bitcoin fell by nearly $2,000 to $42,800 after the PBOC news hit the wires, erasing Thursday’s 3% gain. The cryptocurrency was trading 4% lower on the day at 9:32 UTC.
China renewed its crackdown on cryptocurrency trading and mining in the second quarter amid pilot testing of the digital yuan. However, according to China journalist Colin Wu, the latest central bank statement is quite detailed and mentions tether as illegal for the first time. Tether, the largest stablecoin per market value, is widely used to fund crypto purchases and as collateral in decentralized finance.
Earlier this week, the New York Times reported that regulators might declare stablecoins a systemic risk. Further, U.S. Securities and Exchange Commission Chair Gary Gensler compared stablecoins to poker chips.
Analysts told CoinDesk on Thursday that regulatory uncertainty presents a major downside risk to bitcoin in the short term.
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From May 20 to May 29, XRP funds took in $35 million while bitcoin and ether ETFs lost roughly $2 billion combined, with Ripple’s earlier reported XRP treasury plan still awaiting confirmation.
Що варто знати:
- U.S.-listed spot XRP ETFs drew $11.88 million in net inflows on May 29, extending a week of gains even as bitcoin and ether funds saw continued redemptions.
- Total net assets in U.S. XRP ETFs now stand near $1.12 billion, with about $35 million added since May 20 while bitcoin and...
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