Hello and welcome to the latest issue of Overbit News.
Adding on top of the mining crackdown fears spreading across China and internationally, the People's Bank of China said on Monday that it had asked Alipay and other large banks to tighten down on cryptocurrency trade.
This announcement helped lead Bitcoin to fall to a two-week low that same day, breaking to $32,000 and below. Other coins like Ether and XRP also plummeted by more than 10%, with smaller caps decimated even more so.
Mining fears continue to dominate the headlines, as many bitcoin miners in Sichuan were shut down over the weekend as the southwestern Chinese province's officials ordered a halt to crypto mining. According to these reports, more than 90% of China's bitcoin mining capability will be shut down.
We've reported in the past how China has often waxed and waned on its support for the cryptocurrency industry, especially Bitcoin. However, time will only tell where this latest saga will end up. Going forward, watching hash rate bounce back from this drop off, and especially where this hash rate is coming from, will give a good feel for where miners are headed for the near future.
Though we started with the bearish side of things, we'll close out this week's edition of Overbit News with a bit of bullish news.
MicroStrategy announced Monday that it now owns more than 100,000 bitcoins after completing another round of purchases, this time for $489 million on 13,005 tokens. According to the company, the average purchase price of MicroStrategy's 105,085 bitcoin treasury is $26,080, including fees and other expenditures.
MicroStrategy has risen from relative obscurity to a well-known power on Wall Street and in the crypto community last year, owing to aggressive bitcoin investments and the proselytizing of Chairman and CEO Michael Saylor often promotes bitcoin on Twitter.
Saylor defended the company's crypto ambitions, which have included loan issues to acquire cryptocurrency, in a CNBC interview last week.
"We rotated our shareholder base and transformed ourselves into a company that's able to sell enterprise software and to acquire and hold bitcoin, and we've done it successfully with leverage," Saylor said.
"The bitcoin business is driving shareholder returns. I think the employees are happy. The shareholders are happy."
MicroStrategy's stock had risen dramatically after the firm disclosed its first bitcoin purchase before the market opened on August 11.
Despite the near 50% drop off for Bitcoin from all-time highs, it's clear there are still very large and, in this case, very vocal supporters of the cryptocurrency that are willing to put their money where their mouth is. Though it's easy to see the bearish side of things at this stage in the market, it's always essential to zoom out in markets, especially cryptocurrency, where the end result is frequently the most surprising one.
Thanks for reading, and we'll see you next week!