Bitcoin,, and seemingly every cryptocurrency out there saw their prices fall Wednesday following the news of China reconfirming its ban on the crypto services for its financial institutions. This appeared to contribute to a sell-off across the board and stirred wild swings in the stock market throughout the day.
The China Internet Finance Association said it won’t allow the country’s financial institutions to partake in any business related to cryptocurrency due to the volatile nature of the digital coins, according to a Chinese media report Tuesday that was spotted earlier by Coindesk. This decision isn’t new. China, which also resulted in a massive Bitcoin selloff.
“The price of virtual currency has soared and plummeted, and virtual currency trading speculation has rebounded, which has seriously violated the safety of the people’s property and disrupted the normal economic and financial order,” the report says via Google Translate. “In order to further implement the requirements of the ‘Notice on Preventing Bitcoin Risks’ and ‘Announcement on Preventing Token Issuance Financing Risks’ issued by the People’s Bank of China and other departments to prevent the risks of speculation in virtual currency transactions.”
Bitcoin’s price dropped sharply Wednesday morning to a low of just above $30,000, then rebounded to $37,000, according to Coindesk — which still makes for a loss of 12% for the day. Ethererum and Dogecoin also saw drops at about the same time and are down 27% and 29%, respectively. On Thursday, cryptocurrency prices across the board started moving back up to the level before the news hit.
Since the start of the pandemic, Bitcoin, along with other cryptocurrencies, saw its value climb, reaching. Since then, the price has been coming down because of growing concern about the large energy consumption required for Bitcoin. Last week, Tesla CEO Elon Musk said his company would because its use is increasing the burning of coal for power.
The popularity of Bitcoin and other cryptocurrencies attracted the attention of President Joe Biden. The US Treasury proposed a requirement for individuals report any. The proposal is also included in the president’s . A similar rule is already in place in banks for any deposits over that same amount.