Bitcoin Steadies in Asia Trading After Monday's Plunge Following China Crackdown

China's largest banks and payment firms were urged to crack down harder on cryptocurrency trading.

By Reuters | Updated: 22 June 2021 11:52 IST

Bitcoin Steadies in Asia Trading After Monday's Plunge Following China Crackdown

Bitcoin's Monday selloff was sparked by an announcement from Peoples Bank of China

Highlights

China's State Council had said it would tighten Bitcoin trading, mining
3 industry associations issued a ban on crypto-related financial services
Many financial firms would set up monitoring to root out cryptocurrency

Bitcoin stabilised in Asian trading on Tuesday morning a day after a statement from China's central bank reaffirming the ongoing crackdown on cryptocurrencies in the country sent the world's largest token to a two-week low.

Bitcoin was last up 3.17 percent at $32,600 (roughly Rs. 24.16 lakhs), having dropped more than 10 percent on Monday. As of June 22 (11:16am IST), Bitcoin price in India stood at Rs. 24.44 lakhs. Ether, the second-biggest cryptocurrency, was up 3.54 percent at $1,950 (roughly Rs. 1.44 lakhs) after hitting a five-week low the day before. As of June 22 (11:16am IST), Ether price in India stood at Rs. 1.46 lakhs.

Monday's sell-off was sparked by an announcement from the People's Bank of China saying it had summoned China's largest banks and payment firms urging them to crack down harder on cryptocurrency trading.

Bitcoin Price Slumps in Wake of China Cryptocurrency Mining Crackdown

Beijing has sharply ratcheted up its campaign in the past few weeks, since China's State Council, or cabinet, said last month it would tighten restrictions on Bitcoin trading and mining.

However, Tuesday's price moves suggested Asian traders thought markets overnight had overreacted to the news.

"A Chinese ban on cryptocurrencies isn't something new. The one that came out yesterday was almost a copy of a previous annoucement, earlier this year," said Justin d'Anethan, head of exchange sales at crypto exchange operator EQONEX.

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"As always, leverage, large participants and fundamental events mean crypto can move dramatically," he said.

Last month, three industry associations issued a ban on crypto-related financial services, but the bodies are much less powerful than the PBOC.

Market participants said at the time that the earlier ban would be hard to enforce as banks and payment firms would struggle to identify crypto-related payments.

However, following Monday's PBOC statement, banks including Agricultural Bank of China, and Alipay, the ubiquitous payment platform owned by fintech giant Ant Group, said they would step up monitoring to root out crypto transactions.

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Cryptocurrency Prices across Indian exchanges

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Further reading: Cryptocurrency, Bitcoin, Bitcoin Price, Bitcoin Price in India, Ethereum, Ether Price, Ether Price in India, Peoples Bank of China, EQONEX, Alipay