Bitcoin (BTC) drops toward $60,000 as major cryptocurrencies plunge

A representations of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken May 19, 2021.

Dado Ruvic | Reuters

Bitcoin and other cryptocurrencies fell sharply on Tuesday retreating from near-record highs.

Bitcoin fell toward $60,000 during late morning trade Singapore time, according to CoinDesk data. It recovered some of those loses and was trading at around $60,600.10 at 2:42 p.m. Singapore (1:42 a.m. ET) , down nearly 8% from 24 hours before.

Ether, meanwhile, fell nearly 8% to $4,310.96.

The impetus behind the price movement was not clear.

China’s state planner, the National Development and Reform Commission (NDRC), said during a press conference Tuesday that it will continue to clean up virtual currency mining in the country.

Earlier this year, China cracked down on bitcoin mining leading to an exodus of miners. Mining is the energy-intensive process which both creates new coins and maintains a log of all transactions of existing digital tokens. 

Beijing is concerned about the amount of energy being used by mining.

Mining “causes large energy consumption and carbon emission. It has no active impact to lead industry development or scientific progress,” NDRC spokesperson Meng Wei said on Tuesday, according to a CNBC translation of her Mandarin comments.

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“Regulating cryptocurrency mining activities has significant meaning in optimizing our industrial structure, saving energy and cutting emission, achieving carbon emission and neutrality goals.”

Chinese President Xi Jinping said last year that China aims to achieve carbon neutrality by the year 2060.

The NDRC said it will focus on state-owned companies involved in cryptocurrency mining. It also said it is considering imposing “punitive electricity prices” against those participating in cryptocurrency mining activities but paying a residential electricity price.

China’s authorities have been focusing on wiping out bitcoin mining since earlier this year.

Negative crypto-related comments from Chinese authorities have often led to a sell-off in digital coins, even if those comments are not overly new.

Pullback from record highs

The retreat in cryptocurrency prices also comes as many of them hit all-time highs in November.

Bitcoin reached a record high of $68,990.90 on Nov. 10 with ether following suit on Nov. 11.

“I think we’re seeing a healthy pullback after a 7 week rally from 40K to 69K, which is normal in an upward trend,” Vijay Ayyar, head of Asia Pacific at cryptocurrency exchange Luno, told CNBC via email.