Last month, China banned financial institutions and payment companies from providing crypto-related transactions.
Banned activities include registration, trading, clearing and settlement. Crypto exchanges and initial coin offerings are also on the list. For now, individuals can still hold onto their cryptocurrency.
Up until this week, an estimated 65% of global bitcoin (BTC) mining was done in China. Prior to 2017, China’s crypto market accounted for 90% of global bitcoin trades. China shut down local crypto exchanges in 2017, and in 2019 the People’s Bank of China announced it was blocking access to domestic and foreign crypto exchanges and initial coin offerings.
Just this Sunday, 90% of China’s bitcoin mining capacity was shut down. Electricity suppliers were instructed to identify and halt power to possible crypto mining projects. China’s bitcoin miners opt to locate themselves in areas with high volumes of coal or hydro power, and are a draw on regional electricity supply during peak periods.
On Monday bitcoin price dropped to a two-week low, which is being tied to China’s clamping down. Crypto fans remain optimistic, believing cryptocurrency and bitcoin will continue to rise in value despite China’s domestic shutdown.