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Bitcoin drops below US$30,000 for first time in five months

Bitcoin fell below US$30,000 on Tuesday (Jun 22) for the first time in five months, hit by concerns over China's ongoing crackdown on the world's most popular cryptocurrency.

Bitcoin drops below US$30,000 for first time in five months

Representations of the bitcoin cryptocurrency. (File photo: Reuters/Edgar Su)

LONDON: Bitcoin fell below US$30,000 on Tuesday (Jun 22) for the first time in five months, hit by concerns over China's ongoing crackdown on the world's most popular cryptocurrency.

At about 12.30pm GMT (8.30pm, Singapore time), bitcoin sank 9 per cent to as low as US$29,624, attaining a level last seen in January, with analysts citing Chinese efforts to crack down on trading and mining operations.

"Concerns mount over China's ongoing clampdown and fears that widespread acceptance of bitcoin and other digital currencies will be delayed because of concerns about their environmental impact," said analyst Fawad Razaqzada at trading site ThinkMarkets.

Bitcoin also faces a green backlash because mining often uses electricity produced from fossil fuels, he noted.

READ: Why China is getting tough on crypto

READ: Bitcoin slumps further as China tightens crypto crackdown

China has broadened a crackdown on its massive cryptocurrency mining industry with a ban on mines in the key south-western province of Sichuan.

Chinese mines power nearly 80 per cent of the global trade in cryptocurrencies despite a domestic trading ban since 2017, but in recent months, several provinces have ordered mines to close as Beijing turns a sharp eye to the industry.

Authorities in Sichuan province ordered the closure of 26 mines last week, according to a notice widely circulated on Chinese social media and confirmed by a former bitcoin miner.

Sichuan is home to a large number of cryptocurrency mines, which require a colossal amount of energy supplied by the province's cheap and abundant hydropower.

Iran in late May banned the energy-intensive mining of cryptocurrencies like bitcoin for nearly four months, as the country faces major power blackouts in many cities. 

On Tuesday, state media reported that police have seized 7,000 computer miners at an illegal crypto farm, their largest haul to date of the energy-guzzling machines.

Evidence of the impact of the curbs is emerging. The so-called hash rate of the bitcoin network - a measure of its processing power that shows how much mining is taking place, on Monday hit its lowest level since late 2020.

The crackdown on miners will likely hit prices in the short-term, market players said.

"Some of the miners in China may be more willing to sell their bitcoin now versus when they are able to run their mining operations because they have to raise cash," said Seth Melamed, of Tokyo crypto exchange Liquid.

Source: AGENCIES/kg

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