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Bitcoin Falls to Two-Week Low as China Cracks Down on Mining

Joanna Ossinger
·2 min read
Bitcoin Falls to Two-Week Low as China Cracks Down on Mining

(Bloomberg) --

Bitcoin fell to a two-week low amid an intensifying cryptocurrency crackdown in China.

The largest virtual currency fell 9% to $32,430 as of 10:21 a.m. in London. Ether declined 10% to $2,024.

A Chinese city with abundant hydropower is stepping up action to rein in cryptocurrency mining, reviving concern that China is taking a harder stance on the industry. A Ya’an government official told at least one Bitcoin miner that the city has promised to root out all Bitcoin and Ether mining operations with a year, said a person with knowledge of the situation.

Hydro-Rich Chinese City Said to Clamp Down on Crypto Mining

In the backdrop, the appetite for risk assets has diminished after last week’s hawkish policy pivot by the Federal Reserve. Even though equity markets tipped into the green on Monday, analysts pointed to lingering jitters about frothy corners of the market.

“If, as I expect, the global buy-everything unwind continues this week, Bitcoin will feel those chill winds,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte.

Some commentators have said China’s hashrate -- the computational power used to mine coins and process blockchain transactions -- is waning amid harsher regulatory oversight.

The crypto faithful are also grappling with a tumble in tokens used in so-called decentralized-finance -- or DeFi -- applications. DeFi apps let people lend, borrow, trade and take out insurance directly from each other using blockchain technology, without use of intermediaries such as banks.

DeFi Crash Accelerates With Some Once-Hot Investments Losing 50%

For instance, the DeFi Titanium token went from being valued at around $60 to $0 -- a rare occurrence even for famously volatile crypto markets. Famed mogul Mark Cuban had invested, telling Bloomberg News earlier that though it represented a small percentage of his crypto portfolio, the wipe-out “was enough that I wasn’t happy about it.”

More stories like this are available on bloomberg.com

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©2021 Bloomberg L.P.

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