Bitcoin tumbles further on China crackdown

Bitcoin tumbled on Monday to a two-week low on China’s expanding crackdown on bitcoin mining, as investors grew more uncertain about the future of the leading cryptocurrency, Reuters reports.

Bitcoin fell to a low of US$31,333, a two-week trough, dragging down other cryptocurrencies. It was last down 10.7 percent, its largest daily percentage loss in a month.

The world’s biggest cryptocurrency has lost more than 20 percent in the last six days alone and was at half its April peak of almost US$65,000.

Year to date, it remained up by about 11 percent.

Some bitcoin investors were concerned further losses could be in store due to a chart formation known as a death cross which occurs when a short-term average trendline crosses below a long-term average trendline.

China has been tightening its crackdown on cryptocurrencies.

On Friday, authorities in the southwest province of Sichuan ordered bitcoin mining projects to close.

Last month the State Council, vowed to clamp down on mining and trading as part of a campaign to control financial risks.

On Monday, China’s central bank said it recently summoned some banks and payment firms, including China Construction Bank and Alipay, urging them to crack down harder on cryptocurrency trading.

“People still react strongly to actions from China that create uncertainty so this is likely to reflect negatively on the bitcoin price,” said Ruud Feltkamp, chief executive officer at at crypto trading bot Cryptohopper. “China is rolling its own cryptocurrency and has every incentive to have as little competition as possible…I think we will see miners leaving China and relocate where there is spare or cheap energy.”

Data on mining is scarce. Yet bitcoin in China accounted last year for about 65 percent of global production, according to data from the University of Cambridge, with Sichuan its second-biggest producer.

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