Inflows in Cryptocurrencies Continue for the 6th Consecutive Week
According to data from CoinShares, a digital asset manager influx to the crypto sector continues for the successive 6th week as investors found a buying opportunity due to recent regulatory challenges imposed in the sector. In the preceding six weeks, inflows in crypto amounted to $320 million. Out of this, last week’s inflow was $95 million with Bitcoin at the top with an investment of $50.2 million. For the last two quarters, Bitcoin has had to face the effects of the negative sentiments of investors. This year, Bitcoin’s inflow was a robust $4.3 billion.
On Sept 24, China’s most powerful regulators banned all crypto transactions and mining, thrashing bitcoin and other cryptocurrencies and putting pressure on other blockchain and crypto-related stocks. The top Beijing-based regulators have joined hands to impose an absolute ban on all crypto-related activities. China had previously banned services related to cryptocurrency transactions, but continuous prohibitions called attention to the loopholes in the regulations. Thus, the ban imposed on Sep 24 is the most direct and comprehensive regulatory framework in the history of the crypto market regulations in China.
This announcement came when governments of Asia to the United States were concerned that these privately operated digital currencies could manipulate monetary systems and promote financial crime. Another concern is the mining process through which bitcoin and other digital currencies are created. The process used is an energy-intensive computing process and can hurt global environmental goals.
But, investment in the sector continues to rise even after this intensified crackdown on cryptocurrencies by China. On Sep 27, Glassnode, a blockchain data provider, said that utilization of the bitcoin block space is relatively low. Still, current transactions on bitcoin are around 175,000 – 200,000 per day, which is equivalent to the ones in the 2018 bear market.