Statements by Chinese authorities crashed bitcoin prices
24.05.2021 | auglovoi
However, quickly enough the first cryptocurrency managed to regain its losses. First, the deputy prime minister told about the government’s intention to limit the activities of crypto-mining companies and trade in digital assets in the territory of the Middle Kingdom. This statement collapsed bitcoin prices by 8%, and a number of alternative free currencies lost even more. According to cabinet ministers, the cryptocurrency industry carries the possibility of transferring individual risks to the society. And this came after a recent ban from the People’s Bank of China to invest in the development of cryptocurrency companies. However, the ban on mining specifically at the highest level of the authorities began to discuss publicly for the first time.
In this case, a number of representatives of the cryptocurrency community believe that despite the short-term possible problems with the fall of the first cryptocurrency network hash rate, it will lead to greater decentralization and protection of digital gold. Now some cryptocritics are talking about bitcoin being controlled by Chinese businesses and individual pools. Freed-up equipment, of which there is a clear shortage, is likely to be sold off at a discount from new, and will lead to an increase in mining capacity in other territories.
After the statements of the politician, the national news agency of China provided an explanation of the received information. It says that the country’s leadership sees cryptocurrencies as a threat to national economic stability, and calls digital assets unreasonably risky for investment purposes. However, we cannot yet say that this information is definitive and reliable. But it is this uncertainty that leads to high volatility in the free digital asset market.