Crypto Market Enters Sharp Correction After China Declares Crypto Transactions As Illegal

Over the last two hours from press time, the crypto market has collectively lost a staggering $150 billion with a sharp 5% drop. This comes amid China’s intensified crackdown on digital assets and declaring crypto transactions as illegal.

On Friday afternoon, September 24, the People’s Bank of China (PBoC) said that the latest decision was to further prevent the risks associated with crypto trading. It further talked about taking care of national security and social stability.

In a Q&A posted on its website, the Chinese central bank said that all crypto-related activities like order matching, trading services, token issuance, and derivative for digital assets are prohibited. It also announced an outright ban on overseas exchanges operating in China. As translated by CNBC, the PBoC noted:

“Overseas virtual currency exchanges that use the internet to offer services to domestic residents is also considered illegal financial activity. Workers of foreign crypto exchanges will be investigated”, it added.

The PBoC said that that it has stepped up its infrastructure to identify crypto-related transactions and eliminate any sort of speculative trading activities. “Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies,” the bank said.

Bitcoin and Altcoins Enter Sharp Correction

The price of Bitcoin has dropped 4% as of press time and is trading at $42,246 with a market cap of $795 billion. On the other hand, there’s a bloodbath once again in the altcoin space wiping out all Wednesday’s gains.

Etheruem (ETH) has tanked 10% as of writing this story and fallen below its crucial support of $2,800. As of press time, ETH is trading at $2,775 with a market cap of $334 billion.

All of the top ten altcoins have collapsed by 10-15%. Thus, they have extended the losses to above 20% on the weekly chart. The correction in the decentralized finance (DeFi) space seems to be deeper as of now.