Cryptocurrencies continued to sell off over the weekend following a clampdown on Bitcoin (CRYPTO: BTC) mining and trading activities in China.
This news comes just days after China's finance, banking and clearing regulators banned their financial and payment institutions from cryptocurrency-related activities.
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China pulls the plug on cryptocurrencies
Last week, China's new policies were focused on ensuring that relevant institutions were banned from conducting business related to cryptocurrencies. This included bans against trading, clearing, settling or accepting virtual currency as well as the prohibition of virtual currency exchange services and the use of virtual currency as investments.
Over the weekend, China took another jab against cryptocurrency markets, this time, with a focus on Bitcoin mining and trading activities. According to Reuters, this is "the first time the state council has explicitly targeted crypto mining activities".
China's crackdown on Bitcoin mining could have significant implications for cryptocurrency markets. It is estimated that Chinese miners drive more than 60% of the computational power used to mine and process transactions, otherwise known as hash power or hashrate.
In late April, a blackout in China's Xinjiang region caused almost half its Bitcoin network to go offline. This saw a significant slump in the global hashrate, according to Blockchain.com. There has typically been a positive correlation between Bitcoin hashrate and prices. The hashrate has taken a significant hit over the last week, which could be another reason why the Bitcoin price is struggling.
China's crackdown sees cryptocurrency sell-off continue
Cryptocurrency markets have wound up in a sea of red following China's clamp down.
The Bitcoin price managed to bounce back strongly last Thursday, regaining its US$40,000 level. But as China's news broke out over the weekend, prices slipped to around US$37,500 by Saturday and lows of US$31,000 on Sunday. The Bitcoin price has managed to bounce off these lows and is currently sitting at US$35,578 at the time of writing.
The narrative was the same for other popular cryptocurrencies including Dogecoin (CRYPTO: DOGE) and Ethereum (CRYPTO: ETH). Both tokens experienced sharp rebounds on Thursday, followed by three sharp negative sessions.
