BlockchainBusiness

Terrible Tuesday for Crypto Markets around the world

On 06/22 an unexpected events folds in crypto market around the world.

Key highlights

Bitcoin falls below $30,000 Level
Ethereum falls below $1,800 Level
Binance falls below $250 level

Stakes are high and China launched crackdown by issuing warnings to Banks.

  1. China has cracked down hard on cryptocurrencies over the past few month.
  2. Iran authorities seize 7,000 crypto miners

Iranian police seized 7,000 cryptocurrency mining units at an illegal cryptocurrency farm, according to a report from Reuters, citing Iranian state media.

According to the report, this is their largest haul to date and comes less than a month after Iranian authorities banned crypto mining until September of this year. The ban was a part of the government’s efforts to reduce the number of power blackouts which they blamed on overwhelming high electricity demand over the summer.

According to Tehran police chief General Hossein Rahimi, the 7,000 miners were seized in a deserted factory in the west of the capital, state news agency IRNA said, per the Reuters report.

The country accounts for around 4.5% of all bitcoin mining, according to data collected by blockchain analytics firm Elliptic.

Crypto is experiencing free fall in the market. With Bitoin going towards its new low, miners would like to relocate outside of China.

China’s Central Banks issues warning and told stop servicing crypto exchanges and over-the-counter (OTC) platforms.

Crypto operates in Grey Zone in China. Means neither its legal to hold crypto in China nor its illegal at the moment.

As China government seen so much amount of money going into crypto, it got worried about the span and flow with which money is going to crypto.

In Feb 2021, the government of Inner Mongolia, an autonomous region in northern China, published a proposal aimed at reducing energy consumption, which included closing down Bitcoin mining farms.

sichuan mining farm 2
Large mining operations in the province of Sichuan have been forced to shutter operations. Source: 8BTCnews

Inner Mongolia is home to large coal mines and cheap energy, attracting numerous Bitcoin mining operators.“There will be less and less stable mining power in mainland China throughout the year, and many large miners have begun to go overseas,” local journalist Colin Wu reported at the time.

However, this was not the region’s first attempt to restrict cryptocurrency mining, and its significance may have been underplayed. Then, in April, the industry got a taste of things to come when electricity blackouts caused by safety inspections in China’s popular Bitcoin mining Xinjiang region significantly impacted the hashrate of many top mining pools.

In the same month, scientific journal Nature published a study revealing that, if left unchecked, China’s Bitcoin mining industry could generate as much as 130.5 million metric tons of carbon emissions by 2024.

The following month, China’s State Council announced what was to prove the death blow for crypto mining in China. The high-level government body included Bitcoin mining in a laundry list of financial risks that required monitoring. This announcement marked the first time the State Council specifically spoke out against Bitcoin mining. The note released also included a wide range of other financial risks.

Shortly after, Inner Mongolia issued new rules that would blacklist miners from China’s social credit system if they continued operating, going as far as setting up a hotline for the public to report on cryptocurrency-mining activities if spotted.

Chinese banks caution on crypto
Chinese banks have long been cautious about crypto. Although authorities initially authorized cryptocurrencies as legal tender back in 2013, by the following year China had banned banks from providing certain cryptocurrency services.

In the past few months, Chinese banks have ramped up their rhetoric against cryptocurrency. In April 2021, according to the Wall Street Journal, a number of Chinese banks, including the China Citic Bank Corp., officially warned their customers against using their accounts for cryptocurrency transactions.

Essa Zouga

Founder/CEO of TechMantle Inc. Comprehensive Designer • Tech enthusiast • Futurist

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