If you own any sort of Cryptocurrency, Wednesday, May 19th was not your day. Crypto prices tumbled across the board after China reaffirmed a ban on its use in their financial systems. Bitcoin, Etherium, and the on-again-off-again Dogecoin all dropped dramatically after news broke of the Chinese ban. The news almost certainly triggered a massive selloff of crypto coins, sending the market spiraling in the process.
Holders of Bitcoin almost assuredly had a heart attack, as shares of the most popular digital currency tumbled to a low of $30,000 after reaching highs of almost $70,000 just a few weeks ago. The China Internet Finance Association cited the high volatility of crypto as a reason for their decision. In a report posted to a Chinese news site, financial institutions are expected to “strengthen their social responsibilities.” The report goes on to list essentially every single way that banks are to not use virtual currency, and the list is not short at all. If you click that link above, be sure to have Google translate on standby…You’ll need it.
The article goes on to warn consumers of the perceived risk of using cryptocurrency. There are claims that crypto has no real value, and is extremely easy to manipulate. While there’s definitely a small bit of logic there, most of it is rooted in speculation and comes across as fear-mongering more than informative. Either way, an announcement such as this has an enormous impact on the market, and adversely, directly demonstrates how crypto can actually be a highly volatile security. Regardless, crypto is still proving to be astronomically popular amongst investors of all kinds. We’re also moving into a time where we’re seeing crypto become more commonplace in our financial lives, so much so that you can now even redeem points on a credit card straight into crypto which is great news for people already investing in things like Bitcoin. The future is most definitely crypto, with or without these little hiccups along the way.
This caps off a particularly rough few weeks for Bitcoin, as their value was also sent tumbling after Elon Musk raised concern about sustainability with mining coins. Be sure to exercise caution while investing, and never invest more than you’re comfortable losing. It’s a rough world out there, kiddos.