The crypto market plummeted again over the weekend, amid concerns over a crackdown on bitcoin mining in China and a policy tilt at the US Federal Reserve.
Bitcoin dived by as much as 9% on Monday, dropping to $32,288 — its lowest price in almost two weeks. Ether, meanwhile, slid by as much as 12%, dipping below $2,000 for the first time in nearly a month.
Analysts attributed the dip to two key factors: a hawkish pivot in policy at the Federal Reserve that reduced the appeal of risky assets, and China’s ongoing clampdown on crypto mining.
Beijing has been stepping up its efforts to curb cryptocurrencies in China, which accounts for as much as 70% of the world’s crypto supply, according to some estimates.
Authorities in the Chinese province of Sichuan ordered crypto-mining projects in the region to close last Friday, and other regulators in key mining hubs in the country have imposed similarly harsh measures.
The ban means that more than 90% of China’s Bitcoin mining capacity is estimated to be shut down, according to a report by government-owned media outlet the Global Times.
The intervention came a month after China banned banks and payment companies from providing services related to cryptocurrency transactions.
The market is also coming under growing scrutiny from other regulators around the world.
Authorities have cited concern over the environmental impact of crypto mining, its potential to facilitate illegal activity, and the market’s volatility. But critics say their real fear involves the threat to the existing banking system.