The price of Bitcoin fell on Monday after China continued cracking down on the cryptocurrency, even as business analytics company Microstrategy (MSTR) said it continued to load up on the digital asset.
Microstrategy on Monday said it bought an extra roughly 13,005 Bitcoins for around $489 million in cash, at an average price of $37,617 apiece. It now holds 105,085 Bitcoins.
The company last year began adding Bitcoin as its primary treasury reserve asset. It said investing in Bitcoin has more long-term potential to generate value than cash.
It has also indicated that coronavirus-related relief could dilute the value of traditional money.
Microstrategy was down 6.6% on the stock market today. Among other stocks sensitive to the price of Bitcoin, cryptocurrency exchange Coinbase (COIN) fell 3%. Marathon Digital (MARA) fell 2%. The Grayscale Bitcoin Trust (GBTC) fell 5.3%.
Price Of Bitcoin Slips On Crackdown
The price of Bitcoin fell 2.7% to $32,927, according to CoinDesk.
The Global Times, a government-backed news outlet in China, said on Sunday that many Bitcoin mines in China’s Sichuan province had shut down as of that day. The publication said reports indicate more than 90% of the nation’s Bitcoin mining was taken offline.
Local electricity companies have been ordered to “screen, clean up and terminate” mining operations by Sunday, the Global Times said. Local authorities were barred from authorizing new mining operations, the Times said.
Mining is the computerized process by which new Bitcoins are made. So-called Bitcoin miners also help process transactions and build out the blockchain that records transactions.
The price of Bitcoin fell in recent weeks as China has taken measures to restrict cryptocurrency trading and related financial services. Some miners appeared to be trying to move their equipment out of the nation.
The nation, where market watchers say most of the world’s Bitcoin mining is taking place, is concerned about the financial risks of cryptocurrency. Bitcoin’s environmental impact also raises concerns, as China tries to become carbon neutral by 2060.
Others, such as Tesla (TSLA) CEO Elon Musk, have also raised concerns about Bitcoin’s carbon footprint. Some Bitcoin advocates say concerns about that footprint are overblown.
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