Bitcoin Plunges After China Announces Crackdown

Beijing bans financial services from taking part in cryptocurrency transactions
By Rob Quinn,  Newser Staff
Posted May 19, 2021 2:32 PM CDT
China Cracks Down on Cryptocurrencies
The Bitcoin logo appears on the display screen of a cryptocurrency ATM at the Smoker's Choice store in Salem, NH   (AP Photo/Charles Krupa, File)

A bad month for cryptocurrency investors got worse this week following a big move from China. Regulators in Beijing banned financial services companies Tuesday from taking part in cryptocurrency transactions or providing crypto services to clients, the BBC reports. "Prices of cryptocurrency have skyrocketed and plummeted recently, and speculative trading has bounced back," the banking regulators said in a statement, per CNN. "This seriously harms the safety of people's property and disturbs normal economic and financial order."

Bitcoin, the leading cryptocurrency, crashed below $40,000 for the first time in months Wednesday and sank as low at $30,202 at one point. It started sliding last week after Elon Musk announced that Tesla would no longer accept Bitcoin payments. Other cryptocurrencies, including Ethereum and Dogecoin, also saw significant drops. Reuters reports that before a modest recovery Wednesday afternoon, almost $1 trillion in value was wiped off the crypto sector's market capitalization. (More cryptocurrency stories.)

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