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Bitcoin at $42K as Exchanges Scramble to Let Go Chinese Users

Bitcoin at $42K

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3rd Party Analysis 28 Sep 2021

Key Takeaways

  • Bitcoin and major tokens trade fairly subdued on Tuesday as the market gathers momentum
  • The China ban on crypto has seen increased outflows of Chinese citizens from crypto exchanges

Crypto Market Hovers Near the $2tn Mark

The cryptocurrency market remained steady near the $2tn market cap on the first trading day of the week. Major crypto assets floated near the flat line as market participants were digesting the recent China ban.

The latest crackdown attempt by Chinese officials is now causing increased outflows of Chinese users from cryptocurrency exchanges. As part of the ban, China’s central bank has said no foreign crypto exchanges may provide cryptocurrency-related services in mainland China.

The broadest crypto ban by a leading economy has sent many cryptocurrency exchanges into overdrive as they scramble to single out Chinese citizens and sever ties with them.

Difficulties for Chinese Crypto Investors

While Chinese crypto exchanges could rather easily move their headquarters offshore, for Chinese mainland investors staying in crypto would be more difficult. Crypto enthusiasts in China would now be able to hold digital assets only if they moved out of the country.

Against that backdrop, the price of bitcoin slipped from a session high of $44,300 on Monday, to a close of $43,000, or a decline of about 1.2% on the day. The slight drop in the price of the biggest cryptocurrency, according to analysts, is driven by Chinese traders withdrawing their funds from the market and liquidating their positions in bitcoin.

Other major cryptocurrencies slipped moderately on Monday. The Ethereum network’s native token, ether, lost about 2.8% yesterday, and closed the session at levels near $3,000 per coin. Dogecoin, the cryptocurrency favored by Tesla CEO Elon Musk, declined about 4% on the day to close the session at roughly $0.20.

Markets Moves on Tuesday

On Tuesday, as the market is getting up to speed in the early hours of the session, the prices of leading coins were floating mostly lower. Bitcoin remained pinned near the $42,000 to $43,000 level, while ether stayed slightly below $3,000.

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