Major cryptocurrencies ticked lower on Thursday morning as they remain under pressure from a sell-off triggered by regulatory action in China.
Over the past few days, action in China had caused a sell-off: the People's Bank of China encouraged Alipay and other large institutions to crack down on cryptocurrency trading, while the country extended the clampdown on the bitcoin mining industry to its biggest bitcoin producing provinces, including the southwest province of Sichuan.
Roughly 60% of all global bitcoin mining reportedly takes place in China and more than 90% of the country's bitcoin mining capacity is to be closed.
“As a result of increased crackdowns around the world, digital currencies have recently come under scrutiny. China, in particular, has been at the forefront of the surge in strict controls, causing Bitcoin to struggle to reclaim its prior highs,” said Naeem Aslam, chief market analyst at Ava Trade.
Bitcoin, which was trading at more than $63,000 back in April, had fallen below $30,000 earlier this week, erasing all its gains from 2021.
“Not all is bad, as institutional investors continue to be interested in cryptocurrencies and are developing solutions that will allow their investors to trade in digital currencies as well,” said Aslam, adding that the price reduction will be an opportunity to invest at a discount.
A recent CNBC report has also noted that "with more bitcoin miners going offline due to China’s restrictions, other miners’ share of the network will increase, potentially making mining much more lucrative".
Meanwhile bitcoin mining rig manufacturer Canaan (CAN) will start mining the crypto itself and is setting up new operations in Kazakhstan.
Nangeng Zhang, chairman and CEO of Canaan, said: "As we integrate more industry resources into our operations, we believe this business segment will enable us to revitalise our mining machine inventory, shield us from Bitcoin volatility, and ensure our inventory sufficiency during market upturns.”
The Bitcoin Fund has debuted on the Nasdaq Dubai, becoming the Middle East’s first listed cryptocurrency fund.
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