Bitcoin Dives Back Under $40,000 as Iran Bans Crypto Mining

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Created by TradeOr

3rd Party Analysis 27 May 2021

Key Takeaways

  • The cryptocurrency market retreated from the upside move on Wednesday
  • Bitcoin’s price remains pinned below $40,000, currently around $39,100

Bitcoin Dives Back Under $40,000

The price of Bitcoin today is hovering back below the crucial $40,000 mark. This happened as investors in the digital asset retreated on comments from Iranian President Rouhani that cryptocurrency mining is now an “illegal job”.

Governments around the world are growing nervous by the rapidly-developing cryptocurrency market this year. Of particular concern is the environment toll due to the energy-intensive mining process. To deal with the latter issue, Iran on Wednesday banned Bitcoin and cryptocurrency mining for the next four months. The reason behind it being that mining crippled the energy industry, causing blackouts across the country.

For weeks, businesses and households in Iran have been experiencing blackouts daily, sometimes for as long as six hours a day. “Everyone is finding a corner to mine Bitcoins and cryptocurrencies,” President Rouhani said on Wednesday. “Whoever does this from today is doing an illegal job even those who were allowed [to mine Bitcoins] are no longer allowed until we leave behind this problem [of power outages].”

The statement by Hassan Rouhani echoed warnings by the Chinese authorities from last week who called for tighter regulation on crypto mining and trading. Moreover, the US Treasury is also taking steps to get involved in the crypto space as it will begin requiring stricter crypto compliance with the IRS.

A Tumbling Bitcoin

The cryptocurrency market this week is trying to recoup its losses accumulated over the previous two weeks. On May 19, Bitcoin plunged to its lowest point in almost five months, sliding below $30,000. Then, on Sunday, it tumbled again to almost $31,000.

Bitcoin’s latest attempts to push higher came after Tesla CEO Elon Musk announced on Monday, he had discussed possible renewable energy solutions with US Bitcoin miners. Yesterday, Bitcoin reached a session high of $40,800, up 8.5%, but the upside momentum faded and the world’s largest crypto coin ended the day positive by 3.4% to $38,730 per coin.

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