The Chinese authorities have once again caused a panic in the cryptocurrency market by banning banks from providing services to the crypto business.
The People's Bank of China has reportedly urged banks to immediately close payment gateways for customers who trade in cryptocurrencies.
Crypto market capitalization drops
The cryptocurrency market immediately reacted to the news with a fall of more than 6%. At the time of this writing, the cryptocurrency market capitalization has dropped to $1.46 trillion.
Bitcoin at the moment is falling by more than 5% to $33,232. The dominance of the leading cryptocurrency in terms of capitalization also fell to 46.8%. In the daily interval, traders lost $1 billion. The largest liquidation was recorded in the bitcoin market, where traders lost ~ $618 million. The ether (ETH) market records liquidations for $267 million, and XRP for $43 million.
In addition to the warning from the Central Bank of China, the third-largest bank in China, AgBank, also imposed restrictions on customers who are caught in activity related to cryptocurrencies. According to Reuters, this is the first major bank in China to publicly oppose the cryptocurrency market.
Read also: China Proposes to Consider Bitcoin as an Investment Tool
China intimidates the crypto market
Moreover, along with the fall of the crypto market, the hash rate of the Bitcoin network also falls. For example, at the time of this writing, the cryptocurrency hash rate was reduced to 91 Exaches/sec. Note that the last time the network recorded such values back in November 2020.
However, the reduction in the hash rate may be due to the relocation of miners from China. Recall that in mid-May, China announced a fight against cryptocurrency miners under the pretext of protecting the financial system. In addition, as the authorities of the country assure, in this way they want to reduce carbon emissions.
Threats from the Chinese authorities in the mining community have been taken quite seriously, although this is not the first time that China has threatened the crypto market with reprisals.
As stated by Vice President of Mining-pool Poolin Alejandro De La Torre, the company intends to move to the United States and Canada for mining. He also added that the decision is due to a reluctance to face new bans in China every year.
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