China State Council’s 2021 Bitcoin Crackdown Triggered Sharp Market Drop

The historical note says China’s State Council launched a formal crackdown on Bitcoin mining and trading in 2021, a move that coincided with a steep one-day fall and broader weekly losses across crypto markets.

BTC

Summary

On this day in 2021, China’s State Council announced a formal crackdown on Bitcoin mining and trading. According to the source, the move triggered a single-session drop in Bitcoin from about $41,700 to $36,800 and contributed to an approximately 20% weekly loss across crypto markets. The mining ban that followed pushed hash rate (total computing power securing Bitcoin) out of China, marking a major shift in the global geography of Bitcoin mining.

Terms & Concepts
  • Hash rate: The total computing power used by miners to process transactions and secure the Bitcoin network.
  • Bitcoin mining: The process of using specialized computers to validate blockchain transactions and earn newly issued Bitcoin.
  • Mining ban: A government prohibition on crypto mining activity, often affecting where network computing power is located.