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Bitcoin tumbles 10% amid China clampdown

written by Bella Palmer
bitcoin

The crypto dropped $32,094 to hit its lowest levels in 12 days

Bitcoin tumbled nearly 10% on Monday as cryptocurrency market continued to be volatile, with market players citing jitters over China's expanding clampdown on bitcoin mining in thin liquidity for the losses.

Bitcoin dropped $32,094 to hit its lowest levels in 12 days, dragging smaller coins down. It was last down 8.3%, on course for its biggest daily drop in a month.

The world's biggest and highly volatile cryptocurrency has shed more than 20% in the last six days alone and is down by half from its April peak of almost $65,000. Still, it has gained more than 10% this year.

The decline comes amid a growing clampdown on cryptocurrencies in China, with authorities in the southwest province of Sichuan on Friday ordering closure of bitcoin mining projects.

The State Council, China's cabinet, last month vowed to crackdown on mining and trading as part of a series of measures to control financial risks.

Data on mining is scarce. Yet production of bitcoin in China accounted last year for about 65% of global production, according to data from the University of Cambridge, with Sichuan its second-biggest producer.

Companies that mine bitcoin typically hold large inventories of the cryptocurrency, with any moves to sell large amounts depressing prices.

The crackdown on Chinese miners might mean that they are offloading coin into a thin market and taking us lower, said Ben Sebley of London-based crypto firm BCB Group.

China's central bank said on Monday it had summoned some banks and payment institutions recently, urging them to crack down harder on cryptocurrency trading.

Agricultural Bank of China (AgBank), China's third-largest lender by assets, said separately it was following the People's Bank of China's guidance and would conduct due diligence on clients to root out illegal activities involving crypto mining and transactions.

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