Bitcoin drops 5% in minutes, causing altcoins to collapse amid a new FUD storm from China

Bitcoin has just risen to USD 45,000 in minutes thanks to positive news from the introduction of the “Tips” function on Twitter.

Source: TradingView

Today is a stormy day for Bitcoin. After failing to settle in the $ 45,000 range, BTC price created a long red candle on the 1-hour chart and is trading at $ 42,981 at press time.

It all started with the People’s Bank of China’s announcement that it would ban all transactions related to crypto.

Specifically, the PBoC said in a notification on Friday that all services that enable the exchange of fiat and cryptocurrencies or between cryptocurrencies are now considered illegal activities.

The move appears to be aimed at OTC services, already available on Huobi, OKEx, and Binance, that allow Chinese users to exchange yuan for crypto to participate in crypto trading activities.

In addition, the notice clearly states that providing crypto derivatives trading services is an illegal business in China as well, even for foreign exchanges that help Chinese people access this service. However, it remains to be seen whether Huobi, OKEx and Binance will stop their OTC services.

The PBoC said people who live in China but work for overseas crypto exchanges to offer crypto trading in China could also be prosecuted.

In addition, China’s policymakers are also increasing their control over the cryptocurrency mining industry, according to user Walter Bloomberg.

“Chinese politicians say they will not allow crypto mining projects to enter the electricity market.”

The source: Twitter

Concerns about the popularity of cryptocurrencies

The rapid adoption of cryptocurrencies like Bitcoin has posed a major challenge to the traditional financial system.

Wen Xinxiang, director of payments and settlement at PBoC, expressed concern about the growing popularity of cryptocurrencies and fiat-linked stablecoins.

Whom . Notes that Bitcoin’s market cap has now exceeded $ 800 billion and the total market cap of stablecoin exceeds $ 120 billion, emphasize according to the Shanghai Securities Journal on Jan.

According to Wen, one of the biggest challenges with cryptocurrencies is that the industry is able to operate in isolation from the traditional payment system supported by commercial banks and payment institutions. According to him, cryptocurrencies also affect banks’ payment services and weaken the power of clearing institutions.

Wen argued that the anonymity of cryptocurrencies is an attractive tool for facilitating illegal transactions such as money laundering, and called for further measures to allow the financial system to transfer competition with cryptocurrencies.

Wen’s comments further reinforce the Chinese government’s anti-crypto stance as China continues to crack down on crypto trading and mining this year, with local authorities shutting down many sites.

Together with the slump in Bitcoin, the Altcoins are not doing well either. Ethereum, which just hit the psychological mark of USD 3,000 yesterday, has now slid into the USD 2,800 area, falling over 7% in 24 hours. Other coins in the top 10 also fall between 2-8%. A red color covers the market.

Source: Coin360

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Annie

Bitcoin magazine

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