China's Cryptocurrency Crackdown: Over $400 Million in Tokens Liquidated in 24 Hours Following Most Recent Ban
The People's Bank of China declared cryptocurrency trading unlawful.
As the cryptocurrency market began to recover from the April–May slump, which was mostly caused by increasing Chinese restrictions on cryptocurrency trading and mining, another round of crackdown by China has put the market in the red. Chinese regulators stepped up their crackdown on digital currencies this week, placing a blanket ban on all cryptocurrency transactions and mining in the country. As a result, more than $400 million (roughly Rs. 2,952 crores) worth of crypto coins were liquidated within a day. This renewed effort to contain cryptocurrency trade resulted in top currencies such as Bitcoin and Ether losing significant value.
More than $418 million (approximately Rs. 3,085 crores) was wiped off the market, according to statistics from Bybt, a cryptocurrency trading and information website. According to Bybt data at the time of writing, 80,563 traders liquidated more than $326 million (approximately Rs. 2,406 crores) in the previous 24 hours, indicating that the initial panic was giving way to steadiness. The greatest single liquidation order, worth $6.82 million, was placed on Okex-BTC (roughly Rs. 50 crores).
Bitcoin lost more than $3,000 (approximately Rs. 2.21 lakhs) in an hour on Friday, just after the People's Bank of China declared crypto trading illegal and threatened to harshly penalise anyone who did so. At one point, it slid below $41,000 (roughly Rs. 30.26 lakhs) but has since recovered to $42,733 (roughly Rs. 31.54 lakhs), according to CoinMarketCap.
China's campaign began earlier this year when authorities issued warnings to banks to cease transactions involving virtual currencies and shut down much of the country's Bitcoin mining operations.
This led to the April-May crash, when Bitcoin, for example, fell below $30,000 for the first time (roughly Rs. 22 lakhs). It rapidly rebounded and, by the end of August, had surpassed the $50,000 (approximately Rs. 37 lakhs) level. However, investors are once again concerned that the market is headed for a bearish reversal as a result of the renewed focus on limiting cryptocurrency-related activity.