Bitcoin slumps in wake of China crackdown

TOKYO, June 21 (Reuters) – Bitcoin tumbled as much as 9% on Monday as recent volatility in the cryptocurrency market showed no signs of slowing.

Bitcoin fell as low as $ 32,288, its lowest level in 12 days, and most recently fell 7.5%. If it continues, the decline would be the largest in about a month.

Authorities in southwest Sichuan Province ordered the closure of cryptocurrency mining projects on Friday. The State Council, China’s cabinet, promised last month it would crack down on Bitcoin mining and trading as part of a series of financial risk control measures. Continue reading

“Cracking down on Chinese miners could mean dumping coins into a thin market and taking us deeper,” said Ben Sebley of London-based crypto firm BCB Group.

Bitcoin production in China accounts for more than half of global bitcoin production. According to data from Cambridge University, Sichuan is the second largest bitcoin mining province in China. Some miners move their production there in the rainy summer to take advantage of the rich hydropower resources.

Bitcoin mining companies typically hold large holdings of the cryptocurrency, with any move to sell large quantities pushing prices down.

Bitcoin has fallen more than a fifth in the past six days, down by half from its April high of just under $ 65,000. Nevertheless, it has increased by over 10% this year.

Smaller rival Ether, the second largest cryptocurrency by market cap that tends to move with Bitcoin, fell as much as 12% and fell below $ 2,000 for the first time in almost a month. Most recently, it was down 10% to $ 2025.31.

Reporting by Kevin Buckland; Editing by Toby Chopra

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