The price of Bitcoin, the world’s most popular cryptocurrency, fell further below the $40,000 on Wednesday after China on Tuesday announced that no banks or online payments channels are permitted to offer clients any services involving cryptocurrency.
The institutions must not provide saving, trust or pledging services of cryptocurrency, nor issue financial products related to cryptocurrency, China said in the statement.
“Recently, crypto currency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” China said.
Like Nigeria, China has banned crypto exchanges and initial coin offerings but has not barred individuals from holding cryptocurrencies.
On February 5, the Central Bank of Nigeria had directed banks in the country to close all cryptocurrency-related accounts.
The CBN later explained that it banned cryptocurrency-related transactions in the country because the digital currency could be used for money laundering and terrorism.
“As the names imply, while Central Banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities,” the CBN said.
At around 8:44 AM Nigerian time, data from coinmarketcap.com showed that the price of Bitcoin had slumped by 12.02 per cent in the last 24 hours and 30.96 per cent in a week, while the market capitalization dipped by 11.44 per cent ($748,245,751,295.07).
In the past 24-hour, Bitcoin hit a low of $38,717.16 and oscillated to a high of $45,688.28 before settling at $40,260.17 on Wednesday 08.52 AM Nigerian time, this represents a 10.44 per cent change in price within this period according to coinmarketcap.com.
It is lowest the currency would trade for since mid April.
Bitcoin and other crypto currencies have faced pressure since Tesla’s owner, Elon Musk, last Thursday announced that the electric car company had suspended vehicle purchases using Bitcoin, saying, “We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
He said “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.”
“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction,” Mr Musk’s comments read.
Meanwhile, three months ago the electric car maker revealed it bought $1.5 billion worth of bitcoins, and that it will start accepting payments in bitcoin for its products.
Other Cryptocurrencies too
The prices of other cryptocurrencies such as Ether, XRP and Doge also plummeted sharply.
Within the last 24 hours, Ethereum, XRP and Doge coins fell by 16.04 per cent, 3.88 per cent and 15.37 per cents respectively.
Similarly, in the past seven days Ethereum, XRP and Dogecoin slumped by 31.35 per cent, 1.18 per cent and 18.29 per cent respectively, according to data gleaned from coinmarketcap.com as at 09.20 Am Nigerian time.
Iniobong Williams, a cryptocurrency analyst, who runs WillyWealth crypto masterclass in Abuja, said a number of things could have triggered the drop in the prices of crypto assets.
Mr Williams said, “From a technical perspective price had shown significant weakness around the $60,000 region for a couple weeks.”
He said it is normal at this point for certain investors and traders to sell off existing positions for profits, and that this action usually leads to decline in price.
The crypto space has also seen somewhat negative tweets from CEO of Tesla billionaire, Elon Musk on the increasing use of fuel fossils for Bitcoin mining and transactions which goes against his belief on environmental safety and preservation, Mr Williams told PREMIUM TIMES via WhatsApp interview.
“Influential figures over the years have the ability to influence the market by just comments because of their huge followings on social media. His comments may have triggered a lot of other investors to sell off their positions,” he said.
However, Mr Williams believes that there will always be a rebound in the market as the market operates on the laws of demand and supply.
“$30,000 to $20,000 should be a region to anticipate for fresh demand in the market,” he added.
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