Bitcoin prices continue to tumble as China declares all cryptocurrency transactions to be illegal.
Bitcoin fell sharply on Friday afternoon after China's People's Bank said that all cryptocurrency transactions are prohibited.
The central bank has vowed to tighten down on unlawful cryptocurrency trading and has prohibited foreign exchanges from offering services to mainland customers.
Additionally, it stated that it will prohibit all organizations from supporting cryptocurrency trading and will increase oversight of the dangers associated with such activity.
Bitcoin (BTC-USD) was trading at $41,509 (£30,357), down 4.5 percent. It has remained below the critical $50,000 level and is much below its all-time high of more than $63,000 set in April of this year.
Ethereum (ETH-USD), the second largest cryptocurrency by market capitalization, fell over 7% to $2,918.
"We've seen little in the way of a knee-jerk reaction from clients in response to the China news," said Freddie Williams, a sales trader at digital asset brokerage GlobalBlock.
"This news comes on the heels of the Evergrande disaster earlier this week, which pushed the market into freefall. The market recovered prior to the release of this current news, and we could see a repeat of that pattern following this latest update "he continued.
Investor concern about China's second-largest real estate developer owing a combined debt of around $305 billion is the issue he was referring to.
"We've seen this before in China, where news of prohibitions has been published over the years, but it hasn't slowed growth of bitcoin and other digital assets," Williams said.
Bitcoin's price had previously plummeted in May following Chinese Vice-Premier Liu He's announcement that China would "severely crack down on unlawful securities activities and severely punish illegal financial activities."
He pledged a "strike against bitcoin mining and trading" as part of China's efforts to "avoid and manage financial dangers." It stopped mining in Sichuan, China's second-largest bitcoin mining region, in June.
Liu's remarks came after three state-backed organizations cautioned that digital currencies were not "genuine," should not be utilized for purchases, and could face regulatory adjustments from banks and other authorities.
In other bitcoin news, Twitter (TWTR) announced that users would be able to tip creators using cryptocurrency.
Strike, a cryptocurrency wallet firm, announced the introduction of its Strike API platform on Thursday.
"Through the usage of Strike's API, Twitter users will be able to tip with bitcoin from anywhere in the globe using any Bitcoin Lightning wallet, as well as receive tips into their Strike account in the United States and El Salvador," the company stated in a statement. Strike is available in the following countries.
According to Naeem Aslam, chief market analyst at AvaTrade, "Twitter CEO Jack Dorsey is a great believer in cryptocurrencies and constantly talks them on his social media channels in an attempt to persuade and educate his followers about the technology."
Continue reading: European markets continue to fall as investors remain concerned about Evergrande.
Dorsey stated earlier this year that "bitcoin affects everything...I don't believe there is anything more essential for me to work on in my lifetime."
According to a poll conducted by cryptocurrency trading app Voyager Digital, investor opinion toward crypto assets is becoming increasingly optimistic as we approach the final quarter of 2021.
According to the survey, the majority of investors (eight out of ten) anticipate bitcoin will surpass $56,000 in the coming quarter, with 40% anticipating a price of more than $71,000 in Q4 2021.
“This bullish feeling exists despite bitcoin remaining below its April all-time high of $64,863 and Q3 2021 being a period marked by greater regulatory scrutiny of the cryptocurrency industry "According to the research.
According to the previous quarterly survey, the majority of investors expected bitcoin to end the third quarter between $56,000 and $75,000 in value.