Bitcoin under pressure from post-Fed sentiment slump, China penetration

(Bloomberg) –

Bitcoin slipped Monday amid a waning appetite for riskier investments and an increasing crackdown on cryptocurrencies in China.

The largest virtual currency fell as much as 9% to $ 32,605 and was trading just under $ 33,000 at 7:40 a.m. in London. Ether, the second largest token, was down as much as 11%.

The sell-off came amid broader declines in assets such as stocks and commodities as part of the Fed’s restrictive policies last week. Bitcoin was already under pressure over the weekend after a Chinese city began comprehensive crackdown on crypto mining companies, just the latest move by officials in the world’s second largest economy to contain the industry.

“If, as I expect, global buy-all continues this week, Bitcoin will feel those cool winds too,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte.

A government official in Ya’an, China, told at least one bitcoin miner that the city had promised to eradicate all bitcoin and ether mining operations within a year, said a person with knowledge of the situation.

Some commentators said China’s hashrate – the computing power used to mine coins and process blockchain transactions – is dwindling amid tighter regulatory oversight, rocking investors.

The crypto-believers are also struggling with a slump in tokens that are used in so-called decentralized finance or DeFi applications. DeFi apps enable people to borrow, borrow, trade and take out insurance directly from one another using blockchain technology, without intermediaries such as banks.

DeFi crash accelerates as some once hot investments lose 50%

For example, the DeFi Titanium token was valued at around $ 60 to $ 0 – a rare occurrence, even for crypto markets known to be volatile. Famed mogul Mark Cuban had invested and previously told Bloomberg News that while the wiping out was a small percentage of his crypto portfolio, “it was enough that I wasn’t happy about it.”

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Bitcoin has been in a range between roughly $ 30,000 and $ 40,000 since last month’s collapse. The total market value of more than 8,000 coins tracked by CoinGecko is now $ 1.5 trillion, after peaking at around $ 2.6 trillion.

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