On Wednesday, May 19, the bitcoin rate plummeted in international trading.
At the beginning of the day, the electronic coin fell in price by almost 14.5% - to $ 38.7 thousand. The last time a similar figure could be observed in the first half of February.
This is evidenced by data from the CoinMarketCap portal.
Following bitcoin, the prices of other digital assets traditionally began to decline.
So, for example, at the beginning of trading, Ethereum quotes fell by 19% (to $ 2.84 thousand), and Ripple - by 15% (to $ 1.37).
At the same time, the total value of all cryptocurrencies fell by more than $ 300 billion and reached $ 1.81 trillion.
“A bright event for the market was the announcement of new cryptocurrency bans in China.
Today, the main mining capacities for the production of bitcoin are concentrated in the PRC.
Against this background, any restrictions from one of the largest economies in the world are acutely perceived by the market, "Vitaly Kirpichev, Development Director of TradingView in Russia, explained to RT.
On May 18, the People's Bank of China announced a ban on financial institutions and companies from providing services related to cryptocurrency transactions, as well as using digital assets as a means of payment.
In addition, the regulator warned investors about possible risks when trading electronic currencies.
“Recently, prices for cryptocurrencies have fluctuated extremely sharply.
Speculations have resumed, which seriously undermines the security of the population's assets and disrupts the economic and financial order, ”the Chinese central bank said in a WeChat messenger.
According to experts, the ban on cryptocurrency transactions in China has provoked panic among investors.
As a result, market participants began to actively withdraw money from digital assets, which led to a drop in the value of bitcoin and its analogues.
“The new information turns the existing ideas about the position of the Chinese authorities upside down.
Back in April, the People's Bank of China announced that digital currencies can have value, and in the future the government may think about changing the regulation of the electronic money market, "Aaron Chomsky, head of the investment department of ICB Fund, said in an interview with RT.
Recall that back in 2017, the financial authorities of the PRC began to introduce strict regulation in relation to cryptocurrencies in the country.
For example, the central bank of China has officially banned ICO (initial placement of cryptocurrencies).
Meanwhile, the continuation of the prohibitive policy may be motivated not only by the desire of the Chinese leadership to protect people from cryptocurrency risks, but also by the strategic goals of the country's financial authorities.
This point of view in an interview with RT was expressed by the president of the Russian Association of the Cryptoindustry and Blockchain Yuri Pripachkin.
“In principle, the statements of the Chinese regulator about the new restrictions are easy to explain.
In this way, the PRC is trying to clear a niche for its digital yuan, the release of which is just around the corner, ”Pripachkin explained.
The first digital yuan trials began in China back in 2020.
Then, in an experimental mode, the electronic currency was introduced into circulation by the authorities of the cities of Shenzhen and Suzhou.
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© Aly Song
In February 2021, the third phase of the experiment took place in the country.
About 50 thousand residents of Beijing received 200 digital yuan (about $ 31) each in virtual envelopes through the lottery.
During the week, during the Lunar New Year celebrations, the participants of the initiative could spend the money received on purchases in online stores and physical retail outlets.
It is planned to introduce a new form of payments into wide circulation by the beginning of the Winter Olympic Games - 2022 in Beijing.
At the same time, the PRC authorities intend to provide access to digital yuan not only to citizens of the country, but also to foreigners.
This was announced in April by the deputy head of the People's Bank of China Li Bo.
However, the expected launch of its own digital currency by China and a number of other countries, including Russia, will not lead to the complete ousting of bitcoin from the electronic money market, Yuri Pripachkin is sure.
According to him, the main cryptocurrency has already won the trust of many investors and has occupied a significant niche in the industry.
“In general, a correction is now ripe in the market, and many players are withdrawing money from the cryptocurrency in an attempt to fix the profit.
I do not exclude that against this background, within a month, the bitcoin rate may still fall to the range of $ 32-36 thousand per coin.
Nevertheless, according to our forecasts, by the end of 2021 the asset price will resume its growth and is capable of exceeding the $ 100 thousand mark, ”concluded Pripachkin.