Bitcoins had started their recovery after the sudden fall in their value, which occurred after the tweet of Tesla’s CEO Elon Musk. There was a more than 30 % fall in the value of bitcoins noticed when he announced that bitcoins would be no longer accepted as a mode of payment to buy Tesla Vehicles. But it started recovery until the losses were again extended on 21st May 2021 when the drop of 11% was noticed in the value of bitcoins. This fall in the value of bitcoin happened when China decided to prevent the mining and trading of the world’s largest digital currency, bitcoins. This is mainly to avoid the occurrence of any kind of financial risk, which will surely be a good thing for the individuals.
It has been noticed that China is regularly putting its efforts to take any action against the bitcoins because they want to launch their self-developed digital currency as bitcoin is reducing access to fiat currency which China’s central bank regulates.
The statement released by the Vice Premier Liu He of China’s Financial Stability and Development Committee mentioned that there should be a more structured regulatory framework for bitcoins if it is to be recognized as an asset. The value of bitcoins was reached $35,928 from $40,000, which was consistent for some time in Asian and London sessions. There is no proper regulatory system for bitcoins after the active ban of China on digital currencies like bitcoins. You would be aware of the fact that bitcoin had reached its all-time high point at $65,000 in the month of April. This is why everyone is shocked that now it has fallen almost 28%, which was really not expected by any of the investors. The wealth matrix software is one of the top used platforms all over the world, including China.
One of the statements by China was released on 19th May when the Central bank of china has instructed three of its financial institutions to stop offering services related to bitcoins or any digital currencies. It was a direct warning issued to these banks. The motive behind a warning to these banks is to reduce the occurrence of frauds and unpleasant acts related to digital currencies. In the past few months, there was have been lots of reports by the crypto owners as they have suffered multiple losses while transacting through bitcoins.
The Official statement was mentioned by Liu, who is the senior head as he publicly announced to crackdown the system of bitcoins. It is surprising because many governments have shown concern about bitcoin mining for the first time. No one is having any idea about the purpose or benefit that China’s central bank will attain by prohibiting bitcoin mining. China is the only reason in the world where the highest number of bitcoin miners are actively involved on a regular basis. It has also created worry in the mind of users who were mainly involved in the mining to make revenues and extraction of bitcoins.
There is no clarity to understand what is the key motive behind the action taken by China on the bitcoin-related activities. Some sources claimed that it is for personal motive while others are just confused to utter anything. John Wu, the president of one of the top-rated financial application-based open-source platforms, said that it is complicated to recognize the impact that has occurred after China’s action. It is because they have not considered anything specific.
A couple of days ago, before this clamp by China, China’s state broadcaster also mentioned that bitcoin is no more an authorized tool that can be used to cope up with risks. It is just decentralized investment-based instruments which have a couple of other application to use. The black market is getting a great advantage of this digital currency because there are no strict regularities developed for bitcoins. If the implementation of rigid regulatory does not take the right action, it will be a highly used asset for the purposes of gambling, smuggling, and other inappropriate acts. This will make it a top choice for such activities, but there will be a massive rise in such acts, which will not be suitable anymore.