Shares of blockchain- and crypto-linked companies were having a rough time in Wednesday’s premarket as China clamped down on financial institutions and payment companies to stop them from providing services related to cryptocurrency transactions.
MicroStrategy (NASDAQ:MSTR) was down 6.64%, Riot Blockchain (NASDAQ:RIOT) -5.56% and Marathon Digital (NASDAQ:MARA) -5.57%.
Coinbase (NASDAQ:COIN) fell -5.94%. It's now down 45% from its debut-day peak in April and 10% below its initial reference price.
Predictably, all cryptocurrencies were down too with Bitcoin (BitfinexUSD), which has the largest market cap of them all, slipping below $39,000. ETH/USD lost almost one-fourth of its value and so did DogeCoin.
According to Reuters, institutions, including banks and online payments channels may not offer clients any service involving cryptocurrencies, such as registration, trading, clearing, and settlement. The new restrictions, which essentially only reinforce limitations that have been in place since 2017, come against the backdrop of a regulatory campaign aimed at taming the country's Internet giants such as Tencent and Ant Group, whose payment services have reportedly facilitated much of the recent rebound in Chinese crypto activity.
Last few days have been rough for the crypto world with one of its biggest champions, Tesla (NASDAQ:TSLA) CEO Elon Musk, sending confusing signals. After more than a quarter of adding to the hype around Bitcoin, he suddenly repudiated it last week due to its excessive energy consumption. He remains an advocate for less energy-intensive assets such as DogeCoin, although he jokingly described even that as a 'hustle' on Saturday Night Live earlier this month.
The latest slump in cryptos also comes amid questions over their stability, store of value, and their use by criminals, notably for ransomware attacks such as the one on the Colonial Pipeline Company last week.
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