Cryptocurrency Dogecoin lost more than 30% of its value after plummeting to 17.6 cents. However, this time Elon Musk had nothing to with it. Cryptocurrencies like Bitcoin, Ethereum, and others have also lost value after China appeared to be coming down heavily on cryptocurrencies.
South China Morning Post reports that in a meeting on Monday, June 21st, China’s central bank asked key banks and financial services like AliPay to crackdown on cryptocurrency trading. This is the second time China has decided to ban cryptocurrency trading, after its initial attempt in 2013 wasn’t enforced. Recently, a shutdown of mining operations was ordered in Sichuan province.
The Chinese central bank states on its website that virtual currency transactions increase the risk of illegal cross-border transfers of assets and illegal activities like money laundering. However, a recent report in SCMP states that China is working towards the launch of its own version of digital currency, the e-yuan, whose trials began in May last year. It is reported that China has distributed 200 million yuan ($30.7 million) in pilot projects.
But cryptocurrency enthusiasts are not perturbed.
MicroStrategy, the corporation that owns the largest number of bitcoin, invested another $500 million in the cryptocurrency amidst falling prices. Founder and CEO Michael Saylor later tweeted that China’s actions are a tragedy for the country and will benefit the Rest of the World in the long term.
The dominant driver of #Bitcoin right now is the crackdown on mining & trading in China that began in May. This created a forced & rushed exodus of Chinese capital & mining from the Bitcoin network - a tragedy for China and a benefit for the Rest of the World over the long term.— Michael Saylor (@michael_saylor) June 19, 2021
Others compared it to the ban China imposed on Google in 2010 which barely impacted the value of the company.
Plan B, a pseudonymous analyst, tweeted that the worst is behind Bitcoin and predicts the cryptocurrency to reach $100,000 in 2021.