LONDON/NEW YORK/TOKYO —
Bitcoin tumbled on Monday
to a two-week low on China's expanding crackdown on bitcoin mining, as
investors grew more uncertain about the future of the leading
cryptocurrency.
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Bitcoin fell as low as $31,333, a two-week trough, dragging
down other cryptocurrencies. It was last down 10.7 percent, its largest daily
percentage loss in a month.
The world's biggest cryptocurrency has lost more than 20
percent in the last six days alone and was at half its April peak of almost
$65,000. Year to date, it remained up about 11 percent.
Some bitcoin investors were concerned further losses could
be in store due to a chart formation known as a death cross which occurs when a
short-term average trendline crosses below a long-term average trendline.
China has been tightening its crackdown on cryptocurrencies.
On Friday, authorities in the southwest province of Sichuan ordered bitcoin
mining projects to close.
Last month the State Council, China's cabinet, vowed to
clamp down on mining and trading as part of a campaign to control financial
risks.
On Monday, China's central bank said it recently summoned
some banks and payment firms, including China Construction Bank and Alipay,
urging them to crack down harder on cryptocurrency trading.
"People still react strongly to actions from China that
create uncertainty so this is likely to reflect negatively on the bitcoin
price," said Ruud Feltkamp, chief executive officer at at crypto trading
bot Cryptohopper.
"China is rolling its own cryptocurrency and has every
incentive to have as little competition as possible...I think we will see
miners leaving China and relocate where there is spare or cheap energy."
Data on mining is scarce. Yet bitcoin in China accounted
last year for about 65 percent of global production, according to data from the
University of Cambridge, with Sichuan its second-biggest producer.
Agricultural Bank of China (AgBank), China's third-largest
lender by assets, said separately it was following the People's Bank of China's
guidance and would conduct due diligence on clients to root out illegal
activities involving crypto mining and transactions.
Alipay, the ubiquitous payment platform owned by fintech
giant Ant Group, said in a separate statement it would set up a regulator
monitoring system targeting key websites and accounts to detect illegal
crypto-related transactions.
In other cryptocurrencies, ether, the token used for the
Ethereum blockchain, dropped to a five-week low of $1,890. It was last down
14.3 percent at $1,922.05.
Also on Monday, auction house Sotheby's announced that a
rare pear-shaped diamond that is expected to fetch up to $15 million can be
bought at an auction next month using cryptocurrencies. It would be the first
time a diamond of such size has been offered for public purchase with
cryptocurrency.
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