You are using an older browser version. Please use a supported version for the best MSN experience.

Bitcoin falls 7% after China reportedly bans banks from cryptocurrency business

Business Insider logo Business Insider 5/18/2021 mfox@businessinsider.com (Matthew Fox)
a person standing in front of a computer: Cesc Maymo/Getty Images © Cesc Maymo/Getty Images Cesc Maymo/Getty Images
  • Bitcoin's recovery from Monday's sell-off lost steam on Tuesday after Reuters reported that China banned financial companies from the cryptocurrency business.
  • A statement from China regulators said virtual currencies "are not supported by real value," the report said.
  • China has not restricted individuals from holding cryptocurrencies, but did warn about their speculative nature.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bitcoin fell as much as 7% from its intraday high on Tuesday after a Reuters report said China is banning financial institutions and payment companies from the cryptocurrency business.

Three Chinese industry bodies released a statement warning investors about the speculative and volatile nature of cryptocurrencies, adding that they "are not supported by real value," according to the report.

"Recently, crypto currency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people's property and disrupting the normal economic and financial order," the statement read.

Those three industry bodies were the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China.

The statement also said cryptocurrency prices can be easily manipulated, according to the report. China has banned initial coin offerings and crypto exchanges, but does not restrict individuals from holding them.

US companies are pouncing on the opportunity in cryptocurrencies, with Square's CashApp and PayPal's Venmo facilitating the buying and selling of bitcoin. Banks have created trading desks and funds dedicated to bitcoin.

Bitcoin's volatility has been on full display in recent days, as Tesla CEO Elon Musk sparked a near 20% sell-off in the cryptocurrency after the EV company stopped accepting it as a form of payment. Several tweets from Musk also cast doubt on his bullishness on bitcoin, as he questioned its high energy consumption needs.

Read more: 'Wolf of All Streets' crypto trader Scott Melker breaks down his strategy for making money using 'HODLing' and 100X trade opportunities - and shares 5 under-the-radar tokens he thinks could explode

Read the original article on Business Insider
AdChoices
AdChoices
AdChoices

More From Business Insider

Business Insider
Business Insider
image beaconimage beaconimage beacon