Bitcoin fell as much as 10% as central banks intervened


June 17, 2021

On June 21, the People's Bank of China (PBOC) announced that in order to crack down on bitcoin and other virtual currency trading speculation, protect people's property safety and maintain financial security and stability, the PBOC recently related departments on the issue of banks and payment institutions providing services for the speculation of virtual currency trading. We interviewed some banks and payment institutions such as Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank of China, Postal Savings Bank, Industrial Bank of China and Alipay (China) Network Technology Co., Ltd.

Subsequently, according to the real-time data of Wind, on June 21, global cryptocurrencies plunged for a short time, in which Bitcoin once fell to below $32,000 / piece, down about 10% within the day. It was down about $4,000 from the day's high of $35,741.

As early as May 21, the Financial Stability and Development Committee of the State Council (hereinafter referred to as the Financial Commission) held its fifty-first meeting, and proposed to crack down on Bitcoin mining and trading activities, and resolutely prevent individual risks from being transmitted to the social sector.

The most important cost of virtual currency mining is the electricity cost of running the "mining machines", so the "mines" are concentrated in areas where electricity is plentiful and cheap, such as Xinjiang and Inner Mongolia, which are rich in thermal power, and Yunnan, Sichuan and Guizhou, which are rich in hydropower. Sichuan is home to the largest concentration of bitcoin miners in China and the world, with about 8 million loads being used for cryptocurrency mining.

As a result, the relevant provinces have moved actively to stop "mining".

On May 25, the Inner Mongolia Development and Reform Commission issued the "Eight Measures on Firstly Cracking down and Punishing the" Mining "of Virtual Currency (Draft for Comments)", which put forward different punishment strategies according to the eight types of objects.

On June 9, Qinghai Provincial Department of Industry and Information Technology issued a notice on shutting down virtual currency "mining" projects, requiring clean-up and rectification. All regions are strictly prohibited from establishing and approving all kinds of virtual currency "mining" projects, and all existing virtual currency "mining" projects are completely shut down. At the same time, we will resolutely investigate, punish and correct project subjects that are engaged in virtual currency "mining" in the name of big data and supercomputer centers.

On the same day, and network in xinjiang changji hui autonomous prefecture, development and reform commission issued a "about immediately to virtual currency" dig "the notice of the reorganization of the enterprise for production and demand of xinjiang ZhunDong national economic and technological development zone management committee immediately ordered to" dig "enterprise virtual currency to halt production entirely before 14 o 'clock that day.

On June 12, energy administration office of yunnan province who confirmed, according to the organization the electricity sector in a notice in a timely manner to carry out joint inspection, completed at the end of June this year the currency electricity rectification for mining enterprises, investigate the currency mining enterprises relying on the power generation enterprises, private without permission by the private power, evasion of national distribution electricity, funds, and the illegal action of the additional profit, If found, immediately cut off the power supply; We will severely investigate and punish the illegal acts of power generation enterprises that, without permission, use the electricity generated by them to privately supply power to Bitcoin mining enterprises for illegitimate benefits; We will seriously investigate and punish potential electricity safety hazards of Bitcoin mining enterprises. Once found, they will be ordered to shut down for rectification immediately.

According to a notice issued by the Development and Reform Commission of Sichuan Province and the Energy Bureau of Sichuan Province on June 18, related power companies in Sichuan have to complete the screening and shutdown of virtual currency "mining" projects by June 20. On the same day, Bitcoin fell from a high of $40,000 to $35,000 per coin, starting the current round of decline.

On June 20, the Internet spread the news that all the Bitcoin mines in Sichuan were cut off at zero o 'clock that day, and the Bitcoin miners who had not been able to transfer suffered huge losses. In response, the China Securities Journal pointed out that some mines in Sichuan still had "fluke psychology" because of the "abandoned water problem" in Sichuan.

And in today's People's Bank of China website interviewed the Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank, Postal Savings Bank, Industrial Bank and Alipay (China) Network Technology Co., Ltd. and other banks and payment institutions, five banks and Alipay have issued announcements. Among them, Alipay said it will monitor and investigate transactions involving virtual currency, and will immediately block any discovery. Strengthen the risk monitoring of the transaction link, and prohibit virtual currency transfer transactions. Banning Bitcoin transactions.