Wrapped Bitcoin (WBTC) Price Dives Following Lowest Bitcoin Price Since the Beginning of November
Wrapped Bitcoin fell to $54,846 (WBTC/USD) this morning, dropping 6.68% over 24 hours. This is the lowest rate we have seen for wrapped Bitcoin in over a month. The last time this crypto fell this low was about mid-October.
Of course, it’s Bitcoin pulling its stablecoin WBTC down today, and the sharp drop we are seeing from these two cryptos is being seen across the crypto market. Pretty much the entire industry fell this morning- about 9.11% overall. Some of the biggest drops are coming from Litecoin (14.44%), Solana (12.56%), Ethereum (10.74%), Polkadot (14.76%).
Why Wrapped Bitcoin Has Fallen Today
Analysts are putting the crypto drop down to a renewed Chinese crackdown on cryptocurrency. Previously, China’s focus was on Bitcoin more than other cryptos, but its new crackdown is industry wide. The government is shutting down crypto mining pools, news sites that cover crypto events, and other aspects of the industry within its country. Most crypto mining websites have been shut down, with the vast majority of them becoming inaccessible over the last 24 hours.
Chinese Internet providers are actively blocking access to these kinds of websites within the country. The censorship machine is in full gear right now, and its repercussions are being felt throughout the cryptocurrency industry. This means that many international financial and cryptocurrency businesses have severed ties with Chinese companies.
How Soon Can We Expect a Turnaround?
We saw something similar happen a few months ago when Bitcoin mining was banned in China. The ban rolled out from province to province and didn’t happen all at once. That gave miners time to flee to other countries that were more crypto friendly. The Bitcoin price dropped dramatically for a short while, but it recovered as the mining algorithm updated to reflect the changes.
We will likely see a similar effect in the market following these new regulations and crackdowns. The sharp drop we’ve seen today should be something that the market will be able to recover from, but it could take weeks.
It’s worth keeping in mind that China previously accounted for a large portion of the crypto industry, and not everyone doing crypto business in China is going to move out of the country to continue that business. This means that it could be a long time before the market fully recovers, if it ever does. We do expect the price to bounce back somewhat over the next few days, but a full recovery is difficult to predict at this point and not something we expect to see before the end of the year. The recent all-time high for Wrapped Bitcoin and Bitcoin doesn’t look like it will repeat anytime soon.
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