Bitcoin and other cryptos seesaw after Chinese social media site Weibo blocks

Benz Seo

LONDON, ENGLAND – MAY 30: In this photo illustration, a visual representation of Bitcoin cryptocurrency is pictured on May 30, 2021 in London, England. Bitcoin is a decentralised digital currency, which has been in use since 2009. (Photo illustration by Edward Smith/Getty Images) Bitcoin and other major cryptocurrencies continued to […]

LONDON, ENGLAND – MAY 30: In this photo illustration, a visual representation of Bitcoin cryptocurrency is pictured on May 30, 2021 in London, England. Bitcoin is a decentralised digital currency, which has been in use since 2009. (Photo illustration by Edward Smith/Getty Images)

Bitcoin and other major cryptocurrencies continued to fall on Sunday after reports Chinese social media site Weibo suspended “key opinion leaders” (KOL), reigniting fears of further crack down in the country. 

The flagship crypto, bitcoin (BTC-USD) fell more than 4% to $36,194 (£25,559) and declined as much as $35,453 on Sunday. It has since pared back some losses, trading up less than 0.4% to $36,260. 

Ethereum (ETH-USD) — the world’s second largest crypto by market cap — was down 4% to $2,716 and has bounced back since, up 4%, while meme token dogecoin (DOGE) crashed as much as 6% to $.0.37. 

Weibo (WB), blocked some crypto influencer accounts on Saturday, Coindesk reported, citing violation of unspecified laws and Weibo community rules. However, accounts not involved in ads of exchanges have not been blocked, according to Chinese crypto journalist Colin Wu

Chart: Yahoo Finance

Chart: Yahoo Finance

The fall comes despite positive news from El Salvador and Square (SQ), which failed to eliminate investor concerns over a Chinese regulatory risks.

Nayib Bukele, the president of El Salvador, said on Saturday that he will make bitcoin legal tender in the country, to make it easier for Salvadorans living overseas to send payments home.

The president tweeted the move, if passed, would open up financial services to the 70% of Salvadorans who do not have bank accounts. 

Bukele added he will send the proposed legislation to congress, and if backed it would make the Central American nation, the first in the world to formally adopt the digital currency.

The environmental impact of cryptos has been a source of much concern lately and North American bitcoin miners are working to bring transparency to their energy consumption, through the Bitcoin Mining Council.

US financial services firm, Square announced on Saturday it will invest $5m to build a solar-powered Bitcoin mining facility at a Blockstream Mining site in America through a partnership with the blockchain technology provider. 

Tesla (TSLA) boss Elon Musk also sparked a sell-off after saying the electric carmaker was abandoning plans to accept bitcoin as payment due to environmental concerns.

Over the weekend, a video was posted on YouTube, reportedly made by hacking group Anonymous, accusing Musk of having liquidated dreams and “destroyed lives” with his tweets about cryptocurrencies, which has led to price drops. 

Read more: How bad is bitcoin for the environment?

While bitcoin has no direct link to the real economy, its large fluctuation in value over the last few years has prompted government to consider regulating the virtual asset and central banks to look at ways to incorporate digital currencies. 

In April, the Bank of England and the UK Treasury said they were exploring a potential national digital currency, amid a groundswell of interest in digital markets.

Dubbed “Britcoin” by the press, the BoE said any UK digital currency would be a new form of digital money that could be used by both households and businesses. It would exist alongside cash and bank deposits, rather than replacing them. Both the BoE and Treasury stressed they were simply exploring the idea and are not committed to launching “Britcoin.”

Read more: Elon Musk’s break-up memes cut short Bitcoin’s price revival

Blockchain-based tokens also suffered several price dives recently in response to crackdown threats in several countries.

Last month, Chinese vice-premier Liu Hu said China would “severely crack down on illegal securities activities and severely punish illegal financial activities.”

Hong Kong said cryptocurrency exchanges will have to be licensed by its markets regulator. Under the new rules, which were announced after months of discussions, only professional investors with a portfolio upwards of $1m will be able to use the platforms.

Meanwhile, Iran announced it was banning the energy-consuming mining of cryptocurrencies after some of its cities experienced blackouts. This was possibly due to a drought that had affected hydro-electric power generation but cryptocurrency was draining more than 2GW from its grid each day, the country said.

Before that, Turkey’s central bank said in April would ban cryptocurrencies for payments. The ban, which came into effect at the end of April, prohibits the use of cryptocurrencies and other crypto assets based on distributed ledger technology would be prohibited as a payment, whether directly or indirectly.

The global crypto market lost 4.28% over the last 24-hours, according to data provider CoinMarketCap.

Watch: What is bitcoin?

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