Earlier this week, Bitcoin price fell below $ 30,000 for the first time since January, after hitting an all-time high of nearly $ 65,000 in mid-April.

Mining energy aside, China’s role in the 2021 crypto crisis is huge.

China’s Role in the 2021 Crypto Crisis

While Tesla CEO Elon Musk’s tweets are one of the reasons for this drop in prices, another major reason is China’s massive crackdown on digital currencies and cryptocurrencies in general.

The country has always taken a firm stance on cryptocurrencies. China’s central bank banned financial institutions from processing Bitcoin transactions back in 2013 when the price of the digital currency rose from $ 100 to $ 1,000 within a few months. It also banned fundraising through initial coin offerings and closed the country’s bitcoin exchanges in 2017.

However, the government has been stepping up crackdown on cryptocurrencies in recent months, trying to even end their mining and trading.

In May, China’s Deputy Prime Minister Liu He and the State Council warned that it was necessary “to put an end to bitcoin mining and trading and resolutely prevent the transfer of personal risks to industry.”

It came after China’s three state-backed financial associations raised concerns about the risks stemming from the volatility of cryptocurrencies and instructed their members to involve banks and the online payment company would not offer crypto-related services.

China’s Role in 2021 Crypto Crisis – Crypto Miners Stopped

Immediately after the government’s warning, several crypto miners, including HashCow and BTC.TOP, suspended all or part of their China operations last month. This has a huge impact as Chinese miners supposedly account for 70% of the world’s crypto mining.

In early June, Weibo, China’s version of Twitter, banned a number of prominent crypto accounts, saying that each of them “violated laws and regulations”.

On Monday, China’s central bank, the People’s Bank of China (PBOC), also met with a number of domestic banks and payment companies such as Alipay, urging them to tighten restrictions on transactions that translate cryptocurrencies and instruct them to seek relief Cease cryptocurrency transactions. These institutes must also comprehensively examine and identify crypto exchanges and the over-the-counter capital accounts of their traders, and separate payment links to exchange-traded funds “in good time”.

This practice has forced some miners out of desperation to close down or sell their machines and leave the business. Some of them are also moving abroad to countries like Kazakhstan, reports Reuters. China’s crackdown could take 90% of crypto mining in the country offline, citing estimates by Adam James, a senior editor at OKEx Insights.

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