Bitcoin, Dogecoin and Ethereum are crashing. Here’s why

Chesnot / Getty

One day you will be on top of the world and make the headlines for your upcoming appearance on SNL. Not long after that, you’re the mockery of the internet. This is the curse of DogeCoin that comes along with Bitcoin, Ethereum, and pretty much every other cryptocurrency lost value on Monday.

DogeCoin is down more than 30% to 17.6 cents. That’s a huge drop from its stratospheric high of 70 cents in April. Bitcoin is trading at $ 31,500, a drop of just over 10%, while Ethereum is down 15%. The fall of Ether has affected thousands of altcoins, most of which are based on the Ethereum blockchain and have some of their value weighted in Ether coins. The entire market is down 12%, according to CoinBase.

What is the reason? China – again. In May, Chinese Officials confirmed an old ban this prohibits financial companies from actively helping to mine and sell cryptocurrencies. It caused a huge slump, but crypto enthusiasts shrugged that the ban is nothing new, that it was anchored in 2013 and then only sparsely enforced.

capture.png

Everything is down.

CoinBase

However, steps by China on Monday indicated that the law would be enforced much more seriously. Major banks and financial services companies like Alipay attended a meeting of the Chinese central bank, reports the South China Morning Post, where They have been told to take action against cryptocurrency trading. It came days after regional authorities ordered the closure of 26 mining operations in Sichuan.

“Virtual currency transactions and speculative activities have disrupted the normal economic and financial order” [system],” the the central bank said in a statement on its website. “They increase the risks of illegal cross-border asset transfers and illegal activities such as money laundering.”

The decentralized nature of the cryptocurrency is An horror for the stability orientation of the Chinese Communist Party – and control. Although China eschews Bitcoin, Ethereum, and other cryptocurrencies, it is are working on the introduction of their own digital currency, the e-yuan.

Bitcoin enthusiasts compare the cryptocurrency to Google, whose share price continued to flourish after the People’s Republic was banned in 2010. They say China is neglecting cryptocurrencies at its own risk and that it will be positive for the US in the long run.

DogeCoin holders are less calm. The memecoin went into the year with a value of less than a cent and was pumped by Elon Musk and an ironic internet movement hoping to get it to 10 cents – much like the move seeking to bring GameStop’s stock to $ 1,000. The 10-cent target was met in April and completely dwarfed the following month. As a hype builds around a possible announcement by Musk on SNL, the memecoin has reached 73 cents. After Musk referred to DogeCoin as “a hassle” on the show, it is Collapsed in value, a trend that has continued over the past month.

Comments are closed.