Here's Why Bitcoin, Ethereum, Dogecoin Are Crashing All Of A Sudden

Here's Why Bitcoin, Ethereum, Dogecoin Are Crashing All Of A Sudden

Major cryptocurrencies like Bitcoin BTC/USD, Ethereum ETH/USD and Dogecoin DOGE/USD are crashing early morning on Friday.

What Happened: The plunge in the cryptocurrency markets comes as the People’s Bank of China reiterated its warning on virtual assets not being legal tender in the country.

See Also: How To Buy Bitcoin (BTC)

This isn't the first time that China has issued such a warning but according to CoinDesk China reporter, it's one of the most detailed ones yet, mentioning stablecoin Tether USDT/USD as illegal for the first time specifically.

The latest of these warnings came in May, which itself was a reiteration of an earlier ban on financial institutions and payments companies providing any services related to cryptocurrency transactions.

The country's government is aggressively working on developing and testing its own central bank digital currency.

Price Action: The news has sparked a sell-off in the cryptocurrency markets with Bitcoin trading 3.67% lower at $40,068 at press time.

Ethereum traded 6.9% lower at $2,868.25 and Dogecoin traded 9.29% lower at $0.2026.

The cryptocurrency markets were recovering ahead of PBC publishing the latest warning after concerns related to the Evergrande financial crisis sparked a sell-off earlier this week.

Benzinga's Take: China is sending out these warnings a lot more frequently now but there's nothing new about these. In fact, the ban on financial institutions from dealing with Bitcoin transactions was first notified back in 2013, and it was reiterated for the wider industry in 2017.

There has never been a "ban" on the possession of cryptocurrencies in China and that seems to remain the case, even with the latest warning.

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