Crypto market slumps after China’s comments on outlawing mining

Following China’s latest comments on Bitcoin mining, the cryptocurrency market is on a downward trajectory, but medium-term expectations are positive. Over the past few hours, the cryptocurrency market has faced massive losses, but is expected to rally over the coming weeks.

The National Development and Reform Commission (NDRC), China’s state planner, during a press conference on Tuesday said it would continue to eliminate virtual currency mining in the country.

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Meng Wei, an agency spokesperson, attacked Bitcoin mining, stating it consumed a lot of energy and led to a surge in greenhouse gas emission. The NDRC will launch a full-scale clampdown on crypto mining in China.

China’s remarks forced  the broader crypto market into a bear grip. During the day, Bitcoin lost more than 10% of its value and dropped below  $60,000 for the first time in the past few weeks. Other  cryptocurrencies like Ethereum, Binance Coin, Cardano, Solana, Polkadot, XRP and Dogecoin all lost more than 7% of their value. The total cryptocurrency market had reached $3 trillion last week, it has since dropped to $2.6 trillion.

Despite the pullback, the medium-term outlook for  cryptocurrencies remains positive. Analysts are confident that Bitcoin could reach $100,000 before the end of 2021. Bitcoin hit an all-time high above $69,000 last week.

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The Taproot upgrade on the Bitcoin network went live during the weekend, making it the first major upgrade on the blockchain since 2017. It generated a lot of buzz in the cryptocurrency ecosystem because the update will improve privacy, security and scalability of the Bitcoin blockchain.

Bitcoin is expected to bounce back in the coming weeks and probably cross the $70,000 mark.