Bitcoin slumps 8% as it heads for bruising monthly drop

Bitcoin fights back after Sunday sell-off

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London/Singapore: As China has more and more signs that China’s suppression of emerging sectors has intensified, cryptocurrencies fought back on Monday after a series of sell-offs over the weekend.

Bitcoin rose by 5% after falling by about 7.5% a day ago, reaching a maximum of $37,391.

Ether, the second largest cryptocurrency, jumped more than 10% to $2,321, erasing 8.6% of its losses on Sunday, pushing it to a two-month low near $1,730.

The catalyst for the slump was cryptocurrency “miners”, who mint cryptocurrencies by using powerful computers to solve complex maths puzzles, halting Chinese operations in the face of increasing scrutiny from authorities.

The attention on Chinese miners – who account for some 70% of supply – is the latest front in a wider push by Beijing against the cryptocurrency sector.

On Monday, the major cryptocurrency exchange Huobi suspended crypto mining and some trading services for new customers from mainland China, adding that it will focus on overseas operations. Others also suspended business in China.

In the short-term, market players said, that is likely to lead to pressure on prices as miners sell bitcoin held on their balance sheets.

“If they are pulling up stakes or shutting down, they may need to reduce their balance sheets in the short term,” said James Quinn, managing partner at Q9 Capital, a Hong Kong-based cryptocurrency private wealth manager.

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