Bitcoin alongside other cryptocurrencies plunged sharply on Tuesday ebbing from near-record highs.
The largest digital coin in the world dropped toward $60,000 during late morning trade Singapore time. Some of those losses were recovered as bitcoin traded at around $60,542 at 9:26 a.m. London time (4:26 a.m. ET), as per Coin Metrics data, down 5% from 24 hours earlier.
Meanwhile, plummeted by 6% to $4,229.
The stimulus driving the price movement remains unclear.
China’s state planner, the National Development and Reform Commission (NDRC), said in a press conference on Tuesday that it will continue its cleanup of the virtual currency mining in the country.
Earlier this year, Beijing cracked down on bitcoin mining resulting in an exodus of miners. Mining is an energy-intensive process responsible for both creating new coins and maintaining a log of all transactions carried out on existing digital tokens.
China is worried about the amount of energy required in the mining process.
NDRC spokesperson Meng Wei said on Tuesday that mining “causes large energy consumption and carbon emission. It has no active impact to lead industry development or scientific progress”.
Energy consumption
Last year Chinese President Xi Jinping said that his country is aiming to achieve carbon neutrality by the year 2060.
He said, “Regulating cryptocurrency mining activities has significant meaning in optimizing our industrial structure, saving energy and cutting emission, achieving carbon emission and neutrality goals.”
The NDRC noted that it will be focusing on state-owned companies involved in the mining of cryptocurrencies. It added that it is considering imposing “punitive electricity prices” against those partaking in cryptocurrency mining activities but paying residential electricity prices.
China’s authorities have been working on wiping out bitcoin mining since earlier this year.
According to Trivariate Research, stocks that are inflation plays are moving closely with cryptocurrency.
An analyst noted that as Coinbase struggles, you are better off just purchasing bitcoin.
Chinese authorities issuing negative crypto-related comments have often led to a sell-off in digital coins.
Bitcoin touched a record high of $68,990.90 on Nov. 10 with ether following suit on Nov. 11.
Head of Asia Pacific at cryptocurrency exchange Luno, Vijay Ayyar told CNBC, “I think we’re seeing a healthy pullback after a 7 week rally from 40K to 69K, which is normal in an upward trend.”
