Bitcoin broke the $30,000 price barrier for the first time, Tuesday. It followed Monday’s news that China is getting serious about cracking down on cryptocurrencies. It’s the second slump caused by China’s regulators this year. China sees cryptocurrencies, which are decentralized and unregulated, as a threat. In May, Chinese officials reaffirmed an old ban that forbids financial firms from actively aiding in the mining and selling of cryptocurrencies. Ether, the second biggest cryptocurrency, fell to $1,730, its lowest price since the end of March. It came days after regional authorities ordered last Friday the closure of 26 mining operations in Sichuan. It looks likely that over 90% of Bitcoin mining capacity in the country will shut down, according Chinese media.
“Virtual currency transactions and speculative activity have disrupted the normal order of the economy and financial [system],” the Chinese central bank said in a statement on its website. “They increase the risks of illegal cross-border transfers of assets and illegal activities such as money laundering. ” At the same time, China is working on rolling out its very own digital currency, the e-yuan. What will happen with cryptocurrencies in a medium to long time ? It’s expected that Bitcoin operators will relocate elsewhere, including America. Texas, as an example, has cheap electricity.