The initial reactions from big corporations followed news from China regarding the prohibition on financial activity connected to cryptocurrency. Some are unsure how to respond in this circumstance, while others have already declared the country’s relocation or termination of their operations.
The Celestial Empire’s ban on digital trading currencies has sent shockwaves across the crypto industry. Following that, the entire market value of cryptocurrencies decreased by about 7%, with Bitcoin accounting for more than 6.5 percent and Ethreum 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 would be discontinued.
The Chinese ban on mining firms 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 event.
Cryptocurrency firms have also moved quickly to “save” the industry. So, like most other Chinese crypto firms, Cobo, which just secured $40 million in investment, announced the relocation of its headquarters from Beijing to Singapore. In addition, according to FTX authorities, 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 major exchanges, whose audience is primarily Chinese nationals, were the most visible indicators of the market’s downturn. 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 decreased by “only” 9%.