China Bans Cryptocurrency Transactions, Bitcoin Tumbles to $41,000

The price of Bitcoin momentarily surpassed $45,000 today, before a sharp decline saw the price decrease to $41,000 in the span of 3 hours. The culprit for the sudden 8.5% downturn was the news coming from China – the Chinese Central Bank reportedly decided all crypto-related transactions are illegal within the county’s borders. However, the news was known for weeks, which means that the market had in large part already responded to the new regulatory changes. 

Despite this fact, Bitcoin and other cryptocurrencies got caught up in the selloff frenzy spurred by worried investors when the news started circulating in large news media outlets.

In the last two-week period, the cryptocurrency market was faced with several major unexpected events, which have created particularly volatile conditions in September.

On the same day as El Salvador adopted Bitcoin as legal tender, a massive liquidation of long positions saw the market lose more than $300 billion in the span of hours. After that, the fake announcement of Litecoin being accepted as a payment method by Walmart had shaken up the market. The next in line was the news of Chinese real estate giant Evergrande going under that created a panic in the stock markets, which was then reflected in the price of crypto assets. The last one on the list is today’s China “FUD”.

The market has rebounded quickly following each negative event over the course of the current month. If anything, the last few weeks are a testament to crypto’s resiliency.