Bitcoin price crash as China puts curbs on cryptocurrency mining
Bitcoin price crashed by around 9 percent on Monday morning after reports emerged that China intensified its crackdown on the said cryptocurrency mining.
Bitcoin price touched $32,658.65 at 12:14 pm from a high of $35,924.11 at 1:59 am as per data available on Coindesk — the lowest drop in the last 12 days. However, at 3:14 pm the price of Bitcoin recovered to trade at $33,186.59.
Moreover, the smaller rival of Bitcoin — Ether — also dropped to a low of $1995.49 at 2:59 pm on Monday from a high of $2263.34 about 12 hours ago.
The decline in Bitcoin price can be linked to the reports emerging from China, which has ordered cryptocurrency mining projects to close. The Chinese government has also vowed to clamp down on Bitcoin mining and trading as part of its measures to control financial risk.
China accounts for more than half of global Bitcoin production, with Sichuan is a major location. According to reports, some miners shift the production to the location during monsoon to take advantage of the rich hydropower resources.
It is expected that other Chinese provinces may also follow suit on banning cryptocurrency mining companies.
There has been a growing concern over the environmental impact of cryptocurrency mining as a considerable amount of energy is expended to make these digital coins. While China highly relies on coal-based power plants, this could potentially lead to an increased amount of pollution.
Recently, Tesla had said it would suspend the use of Bitcoin for the purchase of its electric car after Founder Elon Musk cited environmental issues for this decision.
In a tweet, Elon Musk had said Tesla would suspend the use of Bitcoin as the cryptocurrency was mined through the use of fossil fuels like coal, which has its own ramifications on the environment.