Credit: Bloomberg

It didn’t take long for Elon Musk to once again affect the crypto market but this time he isn’t alone. China has introduced new regulations to crack down on crypto traders in the country.

There were rumours last week that Elon Musk’s electric car company, Tesla, would be selling off their USD $1.5 billionworth of Bitcoin holdings which caused a severe drop in the cryptocurrency’s value. Now it seems that is no longer the case after another tweet from Musk stated that Tesla has ‘diamond hands.’

‘Diamond hands’ is a meme from r/WallStreetBets that basically means holding onto stocks even as their value drops because there is a belief in the stock’s eventual profitability.

The reason for Musk tweeting this was due to the ongoing crash the crypto market is experiencing. A crash that Musk is partially responsible for.

Tesla’s initial $1.5 billion holding has now dropped to $1.26 billion but don’t worry about Tesla, this is still more money than what they paid for it. Even with this crash, Bitcoin is still valued at USD $38,442, which is about four times more than it was worth a year ago.

The market rebounded slightly after this announcement.

What’s really sent the crypto market into its continuing downward spiral was the news that Chinese regulators have banned all financial institutions and payment companies from providing any service related to cryptocurrency.

Specifically, China has banned cryptocurrency registration, trading, clearing, and settlement. Members of the public can continue to hold and trade cryptocurrencies, but major exchanges are no longer allowed.

This announcement comes in light of the market’s recent and ongoing volatility. A Chinese trio of finance and banking watchdogs have said that the tokens have ‘no real support value’ and that prices are ‘extremely easy’ to manipulate.

The statement from regulators read,

“Recently, crypto currency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order. Judging from the current judicial practice in my country, virtual currency transaction contracts are not protected by law.”

The value of the crypto market dropped by about $50 billion (2.5%) after China’s announcement.

This isn’t something new for China who have been wary of cryptocurrencies since 2013 when regulators declared that Bitcoin wasn’t a real currency.

It looks like the crypto market is in dire straits right now, but it is unlikely to fall apart completely. Both Bitcoin and Dogecoin are valued much, much higher than they were a year ago. Bitcoin climbed 323% while Dogecoin climbed 670%. Maybe this is just part of the process? Maybe this is the beginning of the end? We can only speculate.