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Bitcoin Falls Sharply After China Reiterates Call for Crackdown

China again called for a crackdown on Bitcoin mining, as the world’s second-biggest economy seeks to ward off financial instability.
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Bitcoin dropped Friday after China reiterated a call for a crackdown on Bitcoin mining and trading, as the world’s second-biggest economy seeks to ward off financial instability.

Those words came in a statement from Chinese Vice Premier Liu He and the State Council, CNBC reports.

China must “resolutely prevent the transmission of individual risks to the social field,” the statement said.

“It is necessary to maintain the smooth operation of the stock, debt, and foreign exchange markets, severely crack down on illegal securities activities, and severely punish illegal financial activities.”

Bitcoin recently traded at $38,086, down 9.19%. It’s been a volatile week for the biggest digital currency, which dove to a low of $30,681 Tuesday and climbed to a high of $45,812 Monday.

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TheStreet.com Founder Jim Cramer explained Wednesday why he’s not buying the dip in Bitcoin.

Tesla Chief Executive Elon Musk, of course, has exerted a major impact on Bitcoin. Market participants have gone wild over every word in his tweets on the subject.

Musk said last week that Tesla would no longer accept Bitcoin as payment for its vehicles because of the carbon footprint of the Bitcoin mining business. He didn’t say anything about the carbon footprint of his rocket company, SpaceX.

A number of analysts say that many other businesses are unlikely to want to accept Bitcoin as payment for their goods and services, given the cryptocurrency’s roller-coaster ride since its 2009 inception.

At this point, Bitcoin mainly serves as a vehicle for speculation. Bitcoin bulls see it as a storage of value, akin to gold.