Bitcoin has continued its free-fall as emerging events exacerbate the spiraling decline the cryptocurrency market has recorded since May. The leading cryptocurrency dropped below 30,000 once again on Tuesday, erasing previous gains that offered hope of recovery.
Bitcoin dropped to $29,655.22 from around $31,000 where it hung on Monday, undermining the $30,000 support that investors have been counting on. The crash, which affected other coins including ether and altcoins, started shortly after bitcoin hit its $60,000 milestone in April. Reasons for the continuous decline can be traced to regulatory decisions by governments and growing concern about carbon impact of mining on the environment. Tesla’s CEO Elon announced earlier in the year that his electric car company will no longer accept bitcoin due to carbon emission concerns.
In May, China banned its financial institutions and payment companies from providing services related to cryptocurrency transactions, and warned investors against speculative crypto trading. The decision was followed up by a crackdown on miners. China’s crackdown fueled a nosedive that plummeted the $2 trillion cryptocurrency market, and other governments’ actions are now compounding the situation.
Last week, police in Malaysia crushed 1,069 of powerful mining rigs—essentially, PCs purpose-built mining tools, with a steamroller.
Authorities in the city of Miri in Sarawak, Malaysia seized 1,069 rigs from miners alleged to have stolen electricity for their operations, per a report from local publication The Star. The devices were seized in a joint operation between Miri police and Sarawak Energy Berhad between February and April, and have an estimated value of RM5.3 million ($1.25 million USD).
The Malaysian authorities made the move after miners were accused of stealing electricity. Six miners were arrested.
The crushing of the mining rigs has become one of the boldest warning messages to cryptocurrency miners by a government. In the face of increasing rift between the authorities and miners over the use of electricity, miners in other countries have had their full share of the government’s clampdown.
Earlier last week, the Ukrainian Security Service (SBU) similarly busted a crypto mining operation for allegedly stealing electricity from a nearby regional energy provider. That bust had its own unique hook: some 3,800 PlayStation 4 consoles made up the majority of the seized devices, as the systems had apparently been modified to mine an unidentified cryptocurrency. Game consoles are significantly less powerful than dedicated PC mining rigs, but there’s still potential for profit when the energy cost is zero.
Apart from the energy conflict, there is an increasing move by governments to regulate the cryptocurrency market, which poses further risk to the dwindling market. US Treasury Secretary Janet Yellen has urged lawmakers to act quickly to construct and adopt new rules on stablecoins.
“Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets, or the financial system. In light of the rapid growth in digital assets, it is important for the agencies to collaborate on the regulation of this sector and the development of any recommendations for new authorities,” she said in a statement.
Tighter regulation will mean governments having a measure of control over crypto operations, and that will defeat the original purpose of cryptocurrency.
Many governments are also working to develop digital currencies that will serve as government-backed alternatives to crypto coins. With all these happening to the cryptocurrency market at the same time, it is expected to witness further decline even though there are projections of market rebound before the end of the year.