China and Cryptocurrencies, Election in Iran and Oil

22 de jun. de 2021

Monday turned out to be a correction day for financial markets. After the intense movements of the last week, the correction is more than logical and necessary for the markets to recover.

However, the correction was not everywhere. Another sale took place on the cryptocurrency market yesterday. Recently, either China or Musk has been the reason for strong movements in this market. Yesterday was China's turn. The process of banning mining in the country continues and is gaining momentum. This time, mining in Sichuan province suffered, where the authorities ordered the closure of cryptocurrency mining projects. Why is this particular region important? In addition to being one of the largest in terms of mining in China, energy is produced there using hydroelectric power plants, that is, as it were, "green" energy. And it seems that mining in this region should not be "toxic", but the Chinese authorities think differently, making it clear that mining in China is not happy in principle, and not because of its carbon footprint.

But even this was not enough for China, and it decided to add negativity to the market. The central bank of China said on Monday that recently some banks and payment institutions got called into, urging them to tackle cryptocurrency trading more vigorously.

In general, it will not be easy for cryptocurrencies to grow against such a background.

But it was just yesterday that oil was growing on the news that the elections in Iran were won by Ebrahim Raisi, who is under US sanctions. It is difficult to expect a breakthrough in the negotiations between the US and Iran after this. Recall that it was the return to the nuclear deal and the lifting of sanctions by the United States that was the most obvious factor in the downward pressure on the oil market (this could potentially lead to the appearance of an additional 2 million b / d oil supply on the market).