Bitcoin falls further as China cracks down on crypto-currencies
I ended a piece in which I compared the cryptocurrency with 17th-Century Dutch tulips or London houses in the 1980s with this thought: “Unless and until Bitcoin can be used to buy a sandwich, or be accepted by your friends when you pay them back for a restaurant meal, then it is likely to remain just a playground for geeks and gamblers.”
Bitcoin plunges below $40,000 as China widens its crypto crackdown
Hong Kong (CNN Business) Bitcoin and other cryptocurrencies are plunging as anxiety spreads through the market — this time, after China took more steps to crack down on the digital coins .
The world’s most heavily traded cryptocurrency plunged as low as $30,202 per coin early Wednesday after starting the day around the $40,000 mark, according to data from Coindesk
Alongside bitcoin’s fall Wednesday, several other major cryptos also were down. Ethereum plummeted below $2,000 per unit after trading above $3,000 on Tuesday, before reclaiming some of its lost ground.Ether was down around 22% at nearly $2,600 Wednesday afternoon. The meme-turned-cryptocurrency dogecoin lost more than 24% of its value.
Tesla TSLA Bitcoin was already dropping this month afterCEO Elon Musk said he was wary of its environmental impact. But a new announcement from a trio of Chinese finance and banking watchdogs appears to have shocked cryptocurrency markets even more.
The agencies said Tuesday that financial institutions and payment companies should not participate in any transactions related to cryptocurrency, nor should they provide crypto-related services to their clients.
“Prices of cryptocurrency have skyrocketed and plummeted recently, and speculative trading has bounced back. This seriously harms the safety of people’s property and disturbs normal economic and financial orders,” said the statement from regulators supervised by the People’s Bank of China and the China Insurance and Banking Commission.
China’s chilly stance toward cryptocurrency goes back years. While the country doesn’t completely ban cryptos, regulators in 2013 declared that bitcoin was not a real currency and forbade financial and payment institutions from transacting with it. At the time, they cited the risk that bitcoin could be used for money laundering, as well as the need to “maintain financial stability” and “protect the yuan’s status as a fiat currency.”
Members of the public can hold or trade cryptocurrencies, but major exchanges in mainland China have been shut down. Authorities in 2017 also banned initial coin offerings, a way for tech startups to raise money by issuing crypto tokens to the public.
The growing crackdown may also be in part to boost China’s state-backed digital yuan initiative , which authorities are working to implement so it can keep money flows under its strict oversight.
While the 2013 notice mentioned only bitcoin by name, some observers have taken it to apply to all cryptos given Beijing’s distaste for the currencies. The state-owned China Times on Wednesday described the latest announcement as a “risk warning in nature.” While not a national law or regulation, it represents an “industry standard to some extent,” the outlet wrote, citing Zhu Youping, an official from the State Information Center, a policymaking think tank.
Still, it shows that China isn’t changing its tack on crypto anytime soon — and that seemed to be enough to worry traders.
“The Chinese position on cryptocurrencies is clear from the beginning: trading and usage of cryptocurrencies are simply forbidden,” wrote Ipek Ozkardeskaya, senior analyst at Swissquote, in a Wednesday research note. “Therefore, the news is nothing ‘new’, but given that crypto traders are too sensitive to negative news nowadays, it adds to the downside pressure on cryptocurrencies.”
Even before the latest announcement from China, Tesla’s Musk had already sent crypto markets on a wild ride.
He flip-flopped last week on a plan to allow his electric carmaker to start accepting bitcoin as payment for its cars, by suspending the program and citing sustainability concerns around the mining of bitcoin. The cryptocurrency then fell 12%. It kept dropping into the start of this week after Musk appeared to suggest that his automaker may have dumped its holdings of the digital currency, though he later clarified that it hadn’t.
Dogecoin, meanwhile, tumbled earlier this month after Musk — the coin’s most prominent supporter — joked about it on “Saturday Night Live.”
Even so, the two cryptos are still astronomically higher than they were a year ago. Bitcoin is up more than 30% in the year to date, according to Coindesk, while Ethereum and Dogecoin have rallied more than 255% and more than 7,500%, respectively.
—Anneken Tappe contributed to this report.
The Ultimate Cryptocurrency Glossary for Crypto Investors
The Ultimate Cryptocurrency Glossary for Crypto Investors
What is an altcoin? What are cryptocurrency exchanges? Find definitions of all the cryptocurrency terms here.
Cryptocurrency is making all the headlines, attracting many investors to try their hand at crypto investments. But every piece of crypto news has terms that are native to the technology and alien to the common man. The reality is cryptocurrency is a new subject and understanding the complexity of it requires a lot of learning and research.
To help you debunk the cryptocurrency news, here’s a glossary that will help you decipher the hoity-toity words and their meanings.
A-Z Of Cryptocurrency
A
Altcoin
Yes, you have heard of Bitcoins multiple times, it’s almost synonymous with cryptocurrency. Being one of the largest crypto coins, Bitcoin’s dominance has made all other cryptocurrencies knows as “altcoins”. The hottest altcoin in the market right now is Etherum followed by Binance Coin, Cardano, and Dogecoin. So next time you read the term altcoin, it simply means alternate cryptocurrency, other than a Bitcoin.
ATH (All-Time High)
ATH stands for the highest point of price or market cap a cryptocurrency holds.
ATL (All-Time Low)
ATL stands for the lower point of price or market cap a cryptocurrency holds.
B
Blockchain
Blockchain is the technology that powers cryptocurrency. It’s a ledger system with a sequence of blocks or units of digital information, stored in an orderly manner within a public database. There are two types of blockchain, blockchain 1.0 which is the first version, and blockchain 3.0 which is the final version.
C
Capital
Capital refers to the sum of money you are ready to invest in any cryptocurrency.
Centralized
A centralized organizational structure is a network that is controlled by a signal node or a small batch of them.
Centralized Exchange (CEX)
This term refers to a kind of cryptocurrency exchange that is operated by a company that runs it in a centralized manner.
Cryptocurrency Exchange
Also known as crypto exchanges, these are websites and applications where you can buy, hold, sell any cryptocurrency of your choice. You can also see the real-time prices and all the coins in the market.
Crypto Wallet
A cryptocurrency wallet holds the key to your crypto coins. Think of a key as a code that lets you make cryptocurrency transactions.
Coinbase
Coinbase talks about the cryptocurrency that is mineable (refer to mining in M ). Coinbase refers to the number of coins that are created from scratch as a reward for miners for mining every block.
D
Deadcoin
A cryptocurrency that is off the market.
Decentralized
Decentralized refers to a system in which nodes work in a distributed manner to achieve a common goal.
Decentralized Applications (DApps)
These are applications that work on a decentralized network.
E
Encryption
Encryption is a method with which information can be made into code.
Ether
Another name for Ethereum, also referring to Ether transactions.
F
Fork (Blockchain)
Fork is used to create an alternative blockchain, leaving two blockchains to perform simultaneously. An example of this is Ethereum and Ethereum Classic.
Fork (Software)
From a software perspective, developers use existing source codes from an existing project, modify it and create a new project.
G
Gold-backed cryptocurrency
A crypto coin that represents the value of gold, where one gram of gold is equal to one coin.
H
Hard Fork (Blockchain)
Like a software fork, a hard fork is a protocol that validates all invalid transactions.
I
Inflation
Inflation is a term that is used to describe a spike in price and fall in the purchasing value of money.
L
Limit Order/Buy/Sell
These are tools that allow traders to automatically buy or sell cryptocurrencies on a trading platform when a set price target is reached.
Liquidity
Liquidity describes how easily a cryptocurrency can be bought and sold.
M
Market Capitalization
Also known as market cap or MCAP, this term refers to the total capitalization of a cryptocurrency’s price.
Market Order/Buy/Sell
When you buy or sell a cryptocurrency on an exchange at the best available price, it’s referred to as marketing buying or selling. The process of buying or selling is called a market order.
Mining
Mining is a process where blocks are added to blockchain technology to verify transactions. It is also a process that creates cryptocurrencies.
Miners
People involved in the process of mining cryptocurrencies are known as miners. Miners can be professionals employed by an organization or hobbyists.
N
No-Coiner
A no-coiner is a person who does not believe in cryptocurrency investments.
Node
A node is a basic unit of blockchain infrastructure that stores the code.
O
Open Source
Open source is a practice where people believe in the open sharing of information for the greater good.
Open/Close
The price at which a cryptocurrency opens and closes during the beginning of every trading day or session.
P
Pair
This term defines the trade between two crypto currencies. For example, the trading pair BTC/ETH
Peer-to-Peer (P2P)
P2P refers to the decentralized interactions between people in a distributed network.
Portfolio
A collection of cryptocurrency assets held by an investor is called a portfolio.
R
ROI
Also known as return of investment, this is the ratio between the net profit and the cost of investment.
S
Smart Contract
A smart contract is a computer protocol that enables and verifies a contract on the blockchain without the involvement of any third party. It is used by software developers to create applications based on blockchain.
U
Utility Token
Tokens that are purposefully designed to be used for something.
V
Volume
The amount of cryptocurrency that has been traded over a set period like 24 hours.
W
Watchlist
A watchlist is a feature of a crypto exchange or website where users can create their list of cryptocurrencies and track their prices.
Z
Zero-Knowledge Profit
During a cryptocurrency transaction, when one party provides the proof of transaction without revealing the private details about the transaction, it is known as Zero-Knowledge Profit.