China warns on cryptocurrency mining, Bitcoin slips over 8%

Cryptocurrencies fell on Tuesday, with Bitcoin briefly dipping below $60,000 and Ether touching its lowest level this month, in a broad-based retreat from recent record highs.

The largest digital token dipped as much as 8.2 per cent to $58,661, the biggest intraday drop since Sept 24. Second-ranked Ether tumbled more than 10 per cent.

Global crypto market cap has dropped some 10 per cent in the past 24 hours to $2.7 trillion, according tracker CoinGecko.

“After several days of gains, which saw Bitcoin hover near it’s all-time high as many other altcoins managed to reach new highs, we are seeing a significant pullback,” said Walid Koudmani, an analyst at XTB Market. “The extreme volatility that the market is prone to could lead to a potential domino effect if more negative news were to emerge and take prices to new lows.” Technical indicators had suggested the strong run of late across the notoriously volatile market was due for a pause.

Some analysts also attributed the dip to new tax-reporting requirements for digital currencies that are part of the $550 billion infrastructure bill, which President Joe Biden signed into law Monday.

“We’ve seen the US infrastructure bill get signed, which has initiated a selloff from traders who are concerned about regulation and taxation,” said Hayden Hughes, chief executive officer of Alpha Impact, a social-trading platform.

Hughes also cited concerns about China continuing its regulatory crackdown. The country will study the option of levying punitive power prices for companies that are involved in cryptocurrency mining, National Development and Reform Commission spokeswoman Meng Wei said at a press conference. Meanwhile, Twitter Chief Financial Officer Ned Segal said on Monday with Dow Jones that it didn’t make sense to invest the company’s cash in crypto assets such as Bitcoin.

China slams money worship, corruption of reform era

China’s ruling Communist Party slammed the “money worship”, “extreme individualism” and corruption that emerged in the four decades since the country opened up, calling for stronger party leadership and moral discipline in a key resolution released on Tuesday.

The document strengthens President Xi Jinping’s dominance of the party ahead of what is likely to be a precedent-breaking third term to begin next year, while enshrining his vision of China’s historical trajectory.

The resolution on the party’s “achievements and historical experiences” since its founding 100 years ago was passed at the end of a four-day, closed-door meeting last week of its Central Committee.

It puts Xi on the same pedestal as predecessors Mao Zedong and Deng Xiaoping, whose pre-eminence was cemented by the only other two such resolutions passed, in 1945 and 1981, respectively.

It sketches out an overview of China’s history, from the “humiliations” of the late Qing empire to the present day, and hopes of a future “great rejuvenation”, emphasising repeatedly that the Communist Party is the driver of progress.

Deng launched reforms in 1978 that transformed China from an impoverished backwater into the world’s second-largest economy. His own resolution emphasised the importance of “collective leadership” after the Maoist excesses of the Cultural Revolution.

Xi, however, is seen to have amassed more power than any leader since Mao, and the latest resolution did not emphasise collective leadership.

While the new document pledges to continue with “reform and opening” policies, it noted that since their launch, “erroneous trends of thought such as money worship, hedonism and extreme individualism” have emerged.

The Party also saw a weakening of its leadership and corrupt practices in the reform era, it said.

Stricter governance, stronger ideological work and more cultural “self-confidence” can help solve these problems, it said, noting that the Xi era had seen many long-term issues resolved.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor