Yesterday, Bitcoin’s price went through a serious decline, losing more than $550 of its value in a matter of hours. Today, news from China came that the country’s views on cryptocurrencies remain unchanged and that they are, in fact, illegal. Almost immediately after that, Bitcoin lost another $500, marking a 6-month low.
China Clarifies: Cryptocurrencies Are Illegal
A few weeks ago, China’s president, Xi Jinping, urged the country to get more involved with blockchain-based technologies. However, ever since then, the government has been running the “Blockchain, not Bitcoin” narrative, reminding people that cryptocurrencies remain illegal at large.
Today, the Shanghai Head office of the People’s Bank of China made a new regulatory update, outlining that it would strengthen regulation and control and clamp down on cryptocurrency trading.
According to the update, authorities are going to continue to implement existing strict regulations, while monitoring activities related to cryptocurrencies within its jurisdiction. Moreover, it also says that once such activities are identified, they will be “disposed of immediately, and prevented from happening early.”
Authorities seem to believe that there are multiple risks when it comes to the issuance of cryptocurrencies and their respective trading. These include asset tampering, investment speculations, business failure, amid others of the kind.
In short, investors shouldn’t mix blockchain technology and cryptocurrencies, as the government’s policies towards both are particularly different.
Bitcoin Price Plunges in Response
Almost immediately after the news, Bitcoin’s price plunged to $7,000, losing yet another $500 of its dollar value.
As CryptoPotato reported, this is a new low for Bitcoin as the cryptocurrency hasn’t traded at these levels since May this year.
So far, the historic support line at around $7,000 holds well, but things can change in the blink of an eye. Should it break below it, the price could go all the way down to $6,200, as that’s where more demand is identified.