Bitcoin and other cryptocurrencies took a shellacking on Monday, as China took further steps to limit its exposure to the banking system.
Bitcoin dropped nearly $2,000 in just 30 minutes around 2 a.m. ET, losing about 6% of its value. It briefly slipped below $32,000 before rebounding to about $32,200, down 5% over the past 24 hours. Ether, the second-most valuable crypto, fell below $2,000, off 7% in the past 24 hours.
The People’s Bank of China said it told domestic banks and the Alipay unit of Ant Group not to provide services linked to cryptocurrency trading. The central bank said speculative activities were disrupting China’s financial system and creating the risk of illegal capital outflows.
Major banks immediately announced moves to ban cryptocurrency trading.
China accounts for two-thirds of Bitcoin mining activities, according to the University of Cambridge. The country has been shutting off access to Bitcoin and other cryptocurrencies as it promotes its own Central Bank Digital Currency, the digital renminbi. A Chinese bank recently made the digital renminbi available at ATMs in the country.
Bitcoin’s high of the year was $63,381.20, reached on Apr. 15. Environmental concerns as well as Chinese regulatory scrutiny are among the factors weighing on the assets.
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