Key Takeaways
- Bitcoin climbs over $40,000 despite a move from China to impose tough penalties for mining
- Ether advances to $2,900 as whole crypto market attempts to recover from the recent meltdown
Bitcoin Breaks Above $40,000
Bitcoin price edges higher on Wednesday, after it broke out of the recent short-term consolidation below the $40,000 mark. Several days of whipsaw trading in mid-May wiped over $500bn off the cryptocurrency market. Bitcoin reached a five-month low over the weekend, slipping to $30,000 per coin as investors headed for the exits after Chinese regulators announced they will crack down on Bitcoin mining and trading.
It took a few days for bitcoin to come to grips with the harsh news and the digital asset spent the last week in a knockdown, hovering below $40,000. Market participants this morning fueled another run to the upside, breaking over that threshold and reached a session high $40,800. Other crypto tokens are also on the move to higher grounds. Ether, earlier today, reached a high of $2,900, or a 14% jump. The price of the Ethereum token had eased off the session highs and is currently gravitating toward $2,800.
Presently, bitcoin has subsided slightly and is trading around $39,900, up 9% on the day. Today’s breakout, according to bitcoin supporters, is a signal that the concentrated buying effort is still active. Crypto opponents argue that the recent blow to the emerging market highlighted how frothy the crypto space is.
Yet Another Penalty From China
Bitcoin’s price today kept rising despite another step from China to punish the mining industry. China’s Inner Mongolia region on Tuesday proposed sanctions for companies and individuals engaged in bitcoin mining. More than that, Chinese authorities are ready to revoke the business licenses of telecommunication companies involved in mining.
In the past few days, China has taken several serious steps to ban bitcoin mining and cryptocurrency activity. The latest move came after Vice Premier Liu He said the country needs to “crack down on Bitcoin mining and trading behavior” to prevent the “transmission of individual risks to the social field”.
The current stance of the Chinese government is part of a four-year long effort to restrict and clamp down on cryptocurrencies. China began pressuring the crypto industry in 2017 when it announced local exchanges must shut down and banned all initial coin offerings (ICOs).
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