China’s recent cryptocurrency crackdown has led for stock markets to suffer.
The decision for the crypto crackdown came after violation of certain important rules, regulations and policies in the country. Resultantly, stocks also suffered a major blow.
News suggests that China intensified the sweeping regulation crackdown on cryptocurrencies such as Ether, Bitcoin and other digital tokens, which took away investor sentiment from the markets.
Major happenings at the exchange after China’s crypto crackdown include the following:
The S&P 500 dropped, whereas the Nasdaq 100 also declined by 0.1%. Moreover, the MSCI World Index declined by 0.2% and the Dow Jones Industrial Average remained a little unchanged.
Additionally, the West Texas Intermediate crude increased by 1.3% settling at $74.27, whereas gold futures remained slightly changed.
In currencies, euro dropped by 0.2% to $1.1716, the Japanese yen fell by 0.4%, to settle at 110.76 a dollar and the British pound dropped by 0.3%, to settle at $1.3676. Finally, the Bloomberg Dollar Spot index rose by 0.2%.
In bonds, Britain’s 10-year yield increased to 0.92%, whereas Germany’s 10-year yield dropped by -0.23%. The yield on 10-year treasuries rose by 1.45%.
Furthermore, in technology, some companies did well whereas shares of other companies dropped. The dollar rose. As a currency in general, the Bitcoin dropped by almost 5.5%, whereas Ether dropped by almost 13%.
Additionally, majority of the stocks related to crypto currencies such as Riot Blockchain Inc. and Marathon Digital Holdings Inc. declined.
The overall impact of the restrictions on cryptocurrency also impacted most public and private sectors in China. Other industries to suffer a blow included digital gaming, e-cigarettes, insurance and private education.
China’s Decision To Restrict Crypto Currency
The news regarding China’s ban and restriction of cryptocurrency came on Friday, which shook stock markets.
A group from China’s government entities’ declared all kinds of financial transactions involved in crypto currencies as illegal. The country has also issued a nationwide ban on crypto mining, causing crypto prices to plummet.
In obvious crypto news, the price of Bitcoin dropped by over 5%, causing the coin to trade at $41,500. On the other hand, Ethereum dropped by nearly 8%, to settle at $2,830 a coin, whereas Ripple dropped by 6%, settling at $0.91.
America is waiting for some positivity among markets after China’s currency crackdown. However, it will still all depend on how China takes things forward.
China’s political decision to restrict cryptocurrency may have a smaller short term impact on crypto currencies. However, in a few weeks, the crash may be severe.
In general, stock markets around the world wobbled on Friday, as they neared their close. Stocks in the U.S. suffered whereas stocks in China and the U.K. suffered too.
So far, the news regarding China’s ban on crypto currency has sort of shocked the world and left them wondering about the world economy. Till there is further news and progress, China’s decision may lead for the world economy to crash if it doesn’t step in with the right policies for controlling or restricting cryptocurrency in the country at the right time.