China Makes Impact on Cryptocurrency Prices
China has been at odds with cryptocurrencies for quite some time now, introducing numerous laws against them. Each time that happens, the price slides a bit for a while, impacting all cryptocurrencies. Unfortunately, the world of digital currencies doesn’t seem to be developed enough for coins to move independently. So when Bitcoin slides, for example, so do Ethereum, Ripple, Cardano, and other major cryptocurrencies. The only outliers are obscure coins that shoot up and down mostly based on investor sentiment.
And since China has been shooting down crypto’s value occasionally for a while now, it seems to have lessened the impact. Namely, although the newest statement we’re talking about is quite severe, the impact is smaller than before. It seems as if crypto holders have written off China, and somewhat rightfully so, as the signs were there for a while. The latest change coming from the People’s Bank of China is quite severe in its intensity. Namely, the decision is to make any sort of cryptocurrency transaction illegal, effectively eliminating cryptocurrencies in China entirely.
While the impact was smaller than before, it’s by no means negligible.
Major cryptocurrencies have been dropping by around 5-10% of their total value, depending on which you look at. For example, BTC, the flagship cryptocurrency, has demonstrated a slide of 5.7% so far. Ethereum, the one trailing behind, has shown a more significant decline of 10.2%. Naturally, the ones that lose the most are China-based cryptocurrency holders, with their assets effectively frozen.
The ban is the most severe measure China has introduced against cryptocurrencies so far. Any financial or non-banking institution is forbidden from offering digital currency services to citizens in China. Also, people from China will be forbidden from accessing foreign online exchanges. That means that the ban is likely final and eliminates most loopholes.