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Bitcoin and ethereum rally as China crypto ban fails to deter investors

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Bitcoin and ethereum rally as China crypto ban fails to deter investors
Cryptocurrencies rallied on Monday. Photo: Yuriko Nakao/Getty

Cryptocurrencies rallied on Monday after tumbling on Friday afternoon as the People's Bank of China said all cryptocurrency-related transactions were illegal.

Bitcoin (BTC-USD) was up 4.8% to trade at $43,842 (£32,045). However, it continues to stay below a key $50,000 mark, and is far off from its all-time high of more than $63,000, which it hit in April this year 

Ethereum (ETH-USD) broke above the level seen last week before the ban at $3,100, up 10.4%.

“Over the weekend sessions, Bitcoin has shown some resilience and has now recovered the majority of those losses,” said Jeffrey Halley, senior market analyst at Oanda Corporation, in a note Monday. “It may well be that China’s previously announced crackdowns had already been built into prices.”

Bitcoin
Bitcoin was up 4.8% on Monday morning. Chart: Yahoo Finance UK

Crypto markets were unsettled on Friday when the People's Bank of China vowed to crack down on illegal activities of cryptocurrency trading and banned overseas exchanges from providing services to mainland investors.

It also said it would stop all companies from facilitating cryptocurrency trading and will strengthen monitoring of risks from such activities. 

Two of the world’s largest Bitcoin exchanges have halted new registrations for Chinese users and one will retire current accounts, taking actions to comply with Beijing’s latest ban.

Read more: Employers also need to embrace right to request flexible working

Exchange operators Huobi and Binance have stopped letting traders use mainland China mobile numbers to register new accounts, after the central bank's announcement on Friday that all crypto-related transactions will be considered illicit financial activity.

Shares in Hong Kong-listed Huobi (1611.HK) were down 19.8% on Monday morning, after dropping as much as 33%. The Huobi Token was off about 10% in the past 24 hours, according to CoinGecko pricing.

Watch: What is Bitcoin?

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