Crypto Rebounds as Investors Look Past China Bombshell

Though Bitcoin and some of its peers tumbled Friday after the People’s Bank of China issued a statement banning crypto transactions and vowing to root out the mining of digital assets, they have largely rebounded since. Bitcoin rallied close to $44,000 Monday, near the level it was at before China’s announcement. Ether broke above last week’s $3,100 level.

“There does appear to be buying support for both Bitcoin and Ether coming online as market participants digest the information,” Fundstrat strategists said late Friday as the coins began retracing their losses. “This is not the first time such an announcement has come out of China,” and if “we broaden our definition of ‘ban,’ then we can pinpoint seven dates, including today, in which we witnessed some semblance of a crypto crackdown” from Beijing.

The PBoC’s move closed the longstanding loophole that enables citizens to maintain accounts with offshore exchanges. It also forbade the platforms from hiring locally for roles such as marketing, tech and payment, limiting their ability to serve Chinese customers.

Still, many miners have already moved out of China, which in April had a 46% share of the global hash rate, a measure of the computing power used in mining and processing, according to the Cambridge Bitcoin Electricity Consumption Index.