Bitcoin falls nearly 8% on China mining crackdown
Bitcoin took a nearly 8% hit, going below $35,000 as Chinese authorities extended their crackdown on cryptocurrency in its southwest province of Sichuan, resulting in more than 90% of the country’s Bitcoin miners being shut down.
The best-known cryptocurrency saw prices drop to $33,596 at (13.29 BST - GMT +1) on Sunday, while Ether dropped 9.2% to $2,065. Social media favourite, Dogecoin also fell 12.5% to hit $0.26 in London Sunday afternoon trading.
Bitcoin’s price recovered in early Asia hours trading on Monday 21 June to touch $36,000.
The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau issued a joint notice on Friday, ordering local firms to “terminate” mining operations by Sunday,
The notice listed 26 firms that had been inspected and reported by Chinese authorities as potential cryptocurrency mining enterprises, including Heishui Kedi Big Data Tech Co and Kangding Guorong Tech Co, according to a report by Chinese state-run media, the Global Times.
The crackdown on mining operations follows on from similar actions in Inner Mongolia and other regions and according to the Global Times, means that Chinese authorities have recently shut down over 90% of the country’s mining capacity.
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The mining ban is one of a series of recent moves by the Chinese authorities that have affected Bitcoin prices. In May, China announced a ban on cryptocurrency dealings at domestic financial institutions due to the price volatility, while it has also shut down crypto-focused social media accounts.
The latest moves are likely to accelerate the process of Chinese crypto miners moving overseas with Central Asia, North America and Paraguay touted as potential new homes for their operations.
Environmental concerns have been a major driver of Bitcoin’s price recently. The previous weekend its price rebounded to nearly $40,000 as tech billionaire Elon Musk tweeted his support for the sector’s green credentials.
Sichuan generates 83% of its energy from hydropower (Pay Wall) and while water itself is renewable, the process of setting up dams and reservoirs has a huge environmental impact. China’s Three Gorges Dam saw 1.4 million people displaced and huge areas of land flooded.