Cryptocurrency prices were rebounding following declarations from China last week that all crypto-related transactions were illegal and must be banned.
Bitcoin, the world’s largest cryptocurrency, was on the rise, up 2.4% on 27 September to $43,622, while ethereum, the second biggest, was up 7% to $3,098. Other coins, such as XRP and dogecoin, also were bouncing back.
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Crypto prices were sent tumbling on 24 September after the People’s Bank of China said “virtual currency derivative transactions” were illegal and “strictly prohibited”.
A statement, signed earlier this month by several government agencies, laid down a tough new regime, reinforcing a ban on crypto mining, warning of stiff penalties for trading and financial transactions in crypto, and promising to “severely crack down on criminal activities involving virtual currencies”.
The ban applies to all digital tokens, which China said are not legal and cannot be used as a currency in the market. Online crypto services to Chinese residents provided by overseas virtual currency exchanges also were considered illegal financial activity.
Meanwhile, China’s crypto ban prompted Huobi and Binance, two of the world’s largest bitcoin exchanges, to halt new registrations for Chinese users.
Huobi and Binance have stopped letting traders use mobile numbers from Mainland China, though new sign-ups are still available for users in Hong Kong.
Shares of Huobi Technology (ticker: 1611:HK) dropped more than 21% on Monday. MicroStrategy (MSTR), which tumbled Friday in concert with other crypto-related U.S. stocks, was rising 2.3% in premarket trading Monday.
This article was published by Barron’s.