It may have been a confluence of events, the first of which was a warning from China’s authorities to the country’s financial institutions not to use or facilitate the use of cryptocurrencies for payments or trading.
Ostensibly the warning/directive to China’s banks and consumers was driven by the authorities’ concerns about the financial risks of cryptocurrencies and their potential to be used in money-laundering.
China has been engaged in a more general crackdown on digital payments and the big technology companies that dominate them, like Ant Group and Tencent. It is also, of course, rolling out its own, central bank-issued, digital currency.
Yet given that China has in the past made it clear it doesn’t regard cryptocurrencies as a legal medium of exchange and that the volatility spread beyond crypto assets, its actions weren’t solely responsible for the turbulence.
It is worth noting that, even as China’s announcement was being digested,…