- Bitcoin plunges to $85,694 as China intensifies cryptocurrency crackdown.
- PBOC targets stablecoins, fueling market uncertainty and Bitcoin price drop.
- Arthur Hayes links Bitcoin decline to potential Bank of Japan rate hike.
Bitcoin faced a sharp decline earlier today, reaching an intraday low of $85,694 according to data from CoinGecko. This significant price drop follows a stern warning from the People’s Bank of China (PBOC), which reaffirmed its crackdown on cryptocurrency activities.
The central bank’s latest statement stresses that digital currencies, especially stablecoins, are considered illegal financial operations. Stablecoins, which are pegged to traditional assets such as the US Dollar, have drawn particular scrutiny for allegedly failing to comply with customer identification and anti-money laundering (AML) regulations.
This marks another escalation in China’s ongoing efforts to restrict cryptocurrency-related activities. Over the past several years, China has banned crypto exchanges and mining operations, with the latest warning targeting speculative trading. The PBOC’s repeated stance that virtual currencies are not legal tender has sent a strong message to both domestic and international markets.
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Impact of PBOC’s Crackdown on the Cryptocurrency Market
The PBOC’s continued crackdown has heightened uncertainty within the cryptocurrency space. Bitcoin’s volatility has been notably impacted by such regulatory actions, with many investors bracing for further market turbulence. While the market has seen periods of recovery in the past, each move by Chinese authorities to restrict digital currencies casts a long shadow over the future outlook of crypto assets.
This latest regulatory development adds to a growing list of concerns for crypto investors globally. Arthur Hayes, the former CEO of BitMEX, suggested that a potential interest rate hike by the Bank of Japan could also contribute to the pressure on Bitcoin’s price. According to Hayes, the Bank of Japan’s anticipated rate increase could impact the yen’s weakness, potentially driving further market corrections in the coming weeks.
As the market processes this new regulatory environment, trader Peter Brandt pointed out that Bitcoin’s price could face further declines. If the cryptocurrency slips below the high $70,000 range, the next support level may be found in the mid-$40,000 range, leading to a significant correction.
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