Cryptocurrencies rebound as fears of Chinese crackdown fade
Major crypto coins started to recover on Monday, following last week’s massive sell-off in the wake of China’s blanket ban on virtual currency-related businesses.
Bitcoin has rallied to about $44,000 per coin, nearing the level it was trading on Friday before the People’s Bank of China announced that crypto transactions in the country are illegal. Meanwhile, ether broke above last week’s level, trading up by more than 5% at $3,110 as of 10:47 GMT.
“As the FUD (fear, uncertainty and doubt) around the cryptocurrency ban in China is slowly leaving the market, there is a sense of stability across the crypto spectrum. With bitcoin surpassing the $44,000 mark, most of the other top cryptocurrencies followed suit. The coming 24 hours could be a period of stability across the crypto spectrum,” Edul Patel, CEO and co-founder of Mudrex, told the Economic Times.
According to Jeffrey Halley, senior market analyst at Oanda Corporation, “Over the weekend sessions, bitcoin has shown some resilience and has now recovered the majority of those losses.”
“It may well be that China’s previously announced crackdowns had already been built into prices,” he said in a note seen by Bloomberg.
The People’s Bank of China revived its tough stance on digital currencies on Friday, ruling all crypto-related trading activities illegal and banning overseas cryptocurrency exchanges from providing services to mainland investors.
The regulator announced plans to bar financial institutions, payment companies and internet firms from facilitating cryptocurrency trading, as well as to strengthen monitoring of risks from such activities.
The ruling came as part of a broader state-run campaign by Chinese regulators against cryptocurrencies. Earlier this year, Beijing banned mining in major bitcoin hubs, such as Sichuan, Xinjiang and Inner Mongolia, which led to a sharp drop in bitcoin’s processing power, as multiple miners took their equipment offline.
