The initial reactions from significant corporations followed news from China about the prohibition on financial operations related to cryptocurrency. Some are unsure how to respond in this situation, while others have already declared the country’s relocation or shutdown of their operations.
The Celestial Empire’s ban on digital trading currencies has sent shockwaves through the crypto community. Following that, the overall market value of cryptocurrencies decreased by nearly 7%, with Bitcoin accounting for more than 6.5 percent and Ethereum accounting for 9.2 percent. Meanwhile, the Crypto Fear Greed Index has risen to the “fear” level after being in a more neutral position last week.
The largest Ethereum mining pool, Spark Pool, was one of the first to announce its shutdown to comply with Chinese legal requirements. However, its representatives stated their willingness to work with local authorities and quickly announced the cessation of services for mainland Chinese users. Following Spark Pool’s footsteps, NBMINER, a company that makes software for mining using video cards, has stated that customer assistance in mainland China will be discontinued.
The Chinese ban on mining companies Marathon Digital Holdings and Riot Blockchain immediately impacted their stock prices. Riot Blockchain was the first to fall 6.2 percent, which “improved” its performance by losing more than 6.5 percent. In addition to these, the PRC’s measures were reflected in Hut 8 Mining Corp.’s shares, which plummeted by 5.3 percent in value and Bit Digital’s indicators, which fell by 5.35 percent. Even industry behemoths like MicroStrategy, whose stock dropped 4.15 percent, and Coinbase’s COIN, the largest American cryptocurrency exchange, lost more than 2.9 percent of its value due to the incident.
Cryptocurrency firms have also moved quickly to “save” the industry. So, like most other Chinese crypto startups, Cobo, which recently got $40 million in funding, announced the relocation of its headquarters from Beijing to Singapore. In addition, according to FTX officials, the company’s headquarters have been “relocated” from Hong Kong to the Bahamas. The decision was made because of the more favorable posture of financial authorities, according to the exchange’s CEO, Sam Bankman-Fried.
Aside from the indicators above, the two largest exchanges, whose audience is primarily Chinese residents, were the most visible indicators of the market’s fall. We’re talking about OKEx and Huobi, both of which saw their tokens drop by 18.9% and 23.6 percent, respectively. Their decline appears to be particularly pronounced compared to BNB, which declined by “only” 9%.