China’s central bank, the People’s Bank of China (PBOC), on Friday banned all cryptocurrency transactions and declared that it would stop illegal crypto mining in the country. Bitcoin traded down about 6.5% shortly after Friday’s opening bell at $41,866, still better than a low below $41,000 posted earlier.
Ethereum traded down nearly 7%, Dogecoin was down more than 7% and Litecoin traded down over 8%. Publicly traded companies that mine bitcoin and other cryptocurrencies also traded down, with a China-based miner retreating more than 15%.
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The PBOC’s official notice of the ban on trading was abundantly clear (h/t, Google Translate) about its reasoning:
Recently, virtual currency trading hype [sic] activities have risen, disrupting the economic and financial order, breeding illegal and criminal activities such as gambling, illegal fund-raising, fraud, pyramid schemes, and money laundering, and seriously endangering the safety of people’s property. In order to further prevent and deal with the risks of virtual currency trading speculation, and effectively maintain national security and social stability, [the PBOC is clarifying its rules].
In early August, the Chinese government took its first step to rein in digital payment systems like Tencent and Ant, a likely precursor in China’s rulers’ drive to create a digital yuan controlled by the government. The government began testing a digital currency in April of last year.
As for bringing an end to illegal mining, the (translated) notice does not mention that specifically, but a companion explainer makes the relationship clear:
Resolutely curb the hype [sic] of virtual currency transactions, severely crack down on illegal financial activities and illegal criminal activities related to virtual currencies, protect the safety of the people’s property in accordance with the law, and make every effort to maintain economic and financial order and social stability.
Here is how eight bitcoin-mining stocks traded Friday morning. Only one is based in China, and it is the one that dropped the most. Most later pared the premarket losses, and one even was trading higher than its Thursday closing price.
Canaan Inc. (NASDAQ: CAN) is a Beijing-based maker of semiconductors and equipment to supply crypto miners. The company has been publicly traded since November of 2019, but after a spike to nearly $40 in March of this year, the stock now trades at around $6.60. The stock’s 52-week range is $1.84 to $39.10, and Friday’s volume was already near the daily average of around 6.7 million shares.
BIT Mining Inc. (NYSE: BTCM) is a Hong Kong-based crypto-mining company that came public in 2013 and hit its recent high in February of this year. The shares traded down more than 6% Friday morning, at $9.59 in a 52-week range of $2.55 to $35.00. Volume was modest.
Bitfarms Ltd. (NASDAQ: BITF) is a Toronto-based cryptocurrency miner that began trading on the Nasdaq in June. Nearly all the company’s mining activities are powered by renewable hydroelectric power. The stock was down about 1.5% to $4.95, in a 52-week range of $0.21 to $10.00. The average daily trading volume is around 5.3 million shares, and 1.7 million had traded Friday morning.
Marathon Digital Holdings Inc. (NASDAQ: MARA) is a Las Vegas-based crypto miner and sports the highest market cap of any of these firms, more than $3.5 billion. The stock traded down about 4.7% to $35.93, in a 52-week range of $1.74 to $57.75. Nearly 9 million shares are traded on an average day, and more than 4 million had changed hands in the first hour of trading Friday.
Greenidge Generation Holdings Inc. (NASDAQ: GREE) traded up about 4.2% Friday morning. The company is based in upstate New York and recently merged with Support.com. It operates both bitcoin-mining and power-generation facilities in New York. The stock’s 52-week range is $14.35 to $519.04 (split-adjusted), and about 2.6 million shares are traded every day. Thus far Friday, 1.7 million shares had been traded. We have been following this stock closely in our daily meme stock reports, and Friday’s higher price is likely due to an effort to squeeze short sellers.
Bit Digital Inc. (NASDAQ: BTBT) traded down about 2.4%, at $9.45 in a 52-week range of $3.40 to $33.00. The bitcoin-mining company is based in New York City. Volume was fairly light Friday, with about 1.2 million shares traded, compared to a daily average of about 18.5 million.
Hive Blockchain Technologies Ltd. (NASDAQ: HIVE) is a Vancouver, B.C.-based crypto miner with operations in Canada, Sweden and Iceland. The company traded over the counter in the United States until June of this year. The stock’s 52-week range is $0.23 to $5.75, and it traded down about 1% Friday morning to $2.93.
Hut 8 Mining Corp. (NASDAQ: HUT) is another Toronto-based crypto miner with operations in North America. The company commenced trading on the Nasdaq in June, and since then the share price has more than doubled. The stock traded down about 2% Friday morning, at $8.70 in a 52-week range of $0.58 to $13.00. The average daily trading volume is around 6.6 million shares, and more than 3.5 million had already changed hands Friday morning.
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