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Bitcoin Price Loses $500 Again Amidst Confusion Over Chinese Regulations

Last Updated March 4, 2021 4:59 PM
Lester Coleman
Last Updated March 4, 2021 4:59 PM

Bitcoin price gave up $500 in the last two days, the second time this has occurred in what appears to be a rollercoaster response to recent actions by Chinese regulators. The price lost 1.61% in the last 24 hours alone, during which nearly all of the top 10 cryptos lost value, pushing bitcoin’s price closer to $4,000 and leaving its market capitalization just over $68 billion, according to coinmarketcap.com.

Source: Coinmarketcap.com

Bitcoin fell from $4,649.16 on Sept. 8 to $4,108.69 today, a nearly 12% loss in two days. The price was in the $5,000 range on Sept. 1, its historic high point.

Source: Coinmarketcap.com

Price Resilience Tested

Today’s loss gives back some of the recovery following a clarification by the top three Chinese bitcoin exchanges – OKCoin, Huobi and BTCC – that Chinese regulators are not banning bitcoin exchanges. Caixin, a state owned financial news source, reported early on Sept. 9 that the government would shut down exchanges within its market. Bitcoin’s price fell to $4,075 within a few hours.

Source: Coinmarketcap.com
Source: Coinmarketcap.com

The price recovered to $4,310 within the same day after Samson Mow, Blockstream’s chief strategy officer, questioned the report, noting Caixin did not provide sources.

OKCoin, Huobi and BTCC, meanwhile, said they did not receive directives from the Peoples’ Bank of China (PBoC) and local regulators. These exchanges assured users they have always complied with government policies.

OKCoin released a statement that should the Caixin report be true, it would keep users’ funds secure.

Chinese Actions Impact Price

Bitcoin’s price has also been affected by the Chinese government’s ban, announced Monday, on initial coin offerings (ICOs). Bitcoin’s price fell by $500 in response this announced ban, but recovered to $4,550 within 24 hours.

Mow claimed bitcoin’s resilience in the face of these government actions reflects the lessening impact of government pressure compared to a few years ago.

News of the ban immediately sent crypto markets tumbling, with nearly 90 of the top 100 cryptocurrencies experiencing 24-hour price declines that were greater than 10%.

Also read: China ICO ban: Crypto industry leaders weigh in

China Could Be Punishing Itself

Binance, a new exchange that has funded operators through an ICO token, responded to the ICO ban by stating today that the Chinese can no longer trade on its exchange.  Binance stated it will suspend trading and deposit services of tokens HCC, LLT, ELC, BTM and YOYO, but that withdrawals would continue. Binance said it will restrict all Chinese IP addresses from trading, although they will be able to make withdrawals.

Binance further said it will refocus its efforts serving its international audience which accounts for 84.5% of its users.

Ripple, the number four crypto currency based on market capitalization, was the only one of the top 10 to post a gain today, rising 2.84% to $0.21443 and a market cap just over $8 billion.

Featured image from Shutterstock.