While cryptocurrency investors are warned of massive volatility in the trading industry, they often see not less than a 15-20% downfall of coins these days. But today is different, as most of the cryptocurrencies, including the majors like Bitcoin, Ethereum, etc., have tanked more than 30% after a ban announcement from the Chinese regulator. This washed off all the cryptocurrency investors’ gains since early this year.
Chinese Ban and Musk’s Foul Play
As per reports from the Chinese media, the China Internet Finance Association has shared a notice on its official WeChat account reiterating the transaction ban of virtual currencies in China’s payment industry. This caused cryptocurrency investors from all over the world to go frenzy and panic sell all their holdings. The Chinese report, when translated from Google, read;
“The price of virtual currency has soared and plummeted, and virtual currency trading speculation has rebounded, which has seriously violated the safety of the people’s property and disrupted the normal economic and financial order.
In order to further implement the requirements of the ‘Notice on Preventing Bitcoin Risks’ and ‘Announcement on Preventing Token Issuance Financing Risks’ issued by the People’s Bank of China and other departments to prevent the risks of speculation in virtual currency transactions.”
This isn’t the first time China banned virtual currencies for transactions. It made a similar move in 2017, which resulted in washing off hundreds of billions of dollars from the market just as now. Further, China has banned the sale of ICOs and lodged many restrictions on trading, holding, and mining of cryptocurrencies, which led some of the exchange platforms to walk out from China.
After all, China is reasonably scared of losing control of its people’s financial transactions, thus invented its own virtual currency to satisfy the thirst. As we see no hope of reversing this ban order now, it remains just as the bad fate of those investors who relied on announcements instead of evaluating the intrinsic value before investing.
While the current market crash is caused directly by China’s ban announcement, Elon Musk actually triggered the downfall, who last week stated that Tesla would stop accepting Bitcoin as a payment. Though he now assured that Tesla has a diamond hands stance on its cryptocurrency holdings, that didn’t make much of a difference.
Tesla has 💎 🙌
— Elon Musk (@elonmusk) May 19, 2021
All the value that the cryptocurrency industry has gained since February this year is now washed off. The torch-bearing token, Bitcoin, plummeted to $30,000 and now stands at $39,000. Altcoins, as usual, rallied behind Bitcoin to see similar crashes and now regaining some of the lost value.