China is fiercely attacking the cryptocurrency market as it has imposed widespread closures of mining operations across the country. This caused a decrease in the network hashrate for both Bitcoin and Ethereum.
According to China's Global Times, one province has shut down 90% of its Bitcoin mining capacity. Coindesk also reported that the People's Bank of China had issued new restrictions preventing banks from offering services that facilitate cryptocurrency transactions. Thus the value of Bitcoin and Ethereum has fallen in trading today.
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A translated version of the People's Bank of China's statement said that "speculative activities of virtual currency trading disrupt the normal economic and financial order, create the risk of illegal and criminal activities such as illegal transfer of cross-border assets and money laundering, and seriously violate the security of people's property» The value of Bitcoin, Ethereum and other coins fell rapidly after the announcement.
The price of Bitcoin has fallen about 4% an hour ago according to the Coindesk price index, and the price of Ethereum is down over 6%. Both cryptocurrencies were already suffering the consequences of Chinese regulations. Reuters said the Sichuan authorities told the miners on June 18 to shut down before June 20.
Bloomberg has reported that the prices of Bitcoin and Ethereum fell 5,5% and 5,9% then respectively. The Sichuan crackdown followed Inner Mongolia, Qinghai, Xinjiang and Yunnan in banning cryptocurrency mining. Those are the most productive mining provinces of the most productive country in the world. Cryptocurrency mining operations could relocate to bypass China's regulations and go to countries like El Salvador. which has approved the project to accept Bitcoin as legal tender. But cryptocurrencies much more than this to regain their value.
Source: Tom's Hardware
