BITCOIN BATTERED AS CHINA CLAMPS DOWN ON TRADING, MINING
Bitcoin extended losses on Friday afternoon, falling more than 11% after China doubled down on efforts to prevent speculative and financial risks by cracking down on mining and trading of the largest cryptocurrency.
China's Financial Stability and Development Committee, chaired by Vice Premier Liu He, singled out bitcoin as the asset it needs to regulate more.
The world's largest and most popular cryptocurrency recently traded down 11.59% at $35,928 after holding the $40,000 level for most of the Asian and London sessions, Gertrude Chavez-Dreyfuss and Thyadaraju Adinarayan reported for Reuters.
Since hitting an all-time high just under $65,000 in mid-April, bitcoin has fallen about 45%. It's down about 28% so far this week.
The statement, which came days after three Chinese industry bodies tightened a ban on banks and payment companies providing crypto-related services, was a sharp escalation of the country's push to stamp out speculation and fraud in virtual currencies. Liu is the most senior Chinese official to publicly order a crackdown on bitcoin. This is the first time the government has explicitly targeted crypto mining.
"It's hard to read into the real impact of potential action by China, as these statements are being made without specifics," said John Wu, president of Ava Labs, an open-source platform for financial applications.
"That said, this statement does show the clear risk for bitcoin mining being so reliant on China, and the wills of its government." Cryptocurrency exchanges operating in Hong Kong will have to be licensed by the city's markets regulator and will only be allowed to provide services to professional investors, according to government proposals to be presented later this year.
Earlier on Friday, China's state broadcaster CCTV warned against "systemic risks" of cryptocurrency trading in a commentary on its website.