The Chinese government has not only banned trading or mining of cryptocurrencies, but even individual ownership of digital assets like Bitcoin.

The cryptocurrency market on Friday experienced a significant decline, with a 61 billion dollar dip in total market capitalisation, partially due to new restrictions imposed by China on private cryptocurrency holdings.

China has imposed a fresh ban on cryptocurrency holdings according to a report by Binance. The Chinese government has not only banned trading or mining of cryptocurrencies, but even individual ownership of digital assets like Bitcoin.

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Although the current situation is challenging, analysts expect that downward pressure will ease soon, says InvestX, a cryptocurrency and finance related website. 

Also Read: Crypto investor tortures Italian man for Bitcoin password in $30,000-a-month NYC apartment

The move by China has led to a general decrease in investor optimism and has caused panic selling that caused a drop in the markets. China has had a hardline approach to cryptocurrency in order to promote the use of the state-backed digital yuan.

With the ban on private crypto holdings, Beijing is tightening its grip on financial flows, potentially accelerating the adoption of its central bank digital currency (CBDC). 

Also Read: Who is John Woeltz? $100M crypto king kidnaps, tortures Italian man for Bitcoin password in NYC before dramatic escape

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Meanwhile, the Trump administration’s decision to favour tax cuts and lower tariffs have the potential to kick off another speculative frenzy in markets, reported Reuters, citing Bank of America.

This US economic strategy could incentivize traders to ditch bonds and start buying back into artificial intelligence and crypto trades, which would risk inflating a market “bubble.”

US vice president JD Vance has advocated for the use of Bitcoin and other cryptocurrencies in order to build on its strategic advantages against China.

During a Bitcoin Conference in Las Vegas, Vance applauded President Donald Trump’s executive order in March that created a strategic bitcoin reserve with tokens already owned by the government.

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Michigan could see the creation of a “Cryptocurrency Bill of Rights” under legislation recently introduced in the state House of Representatives.

One of the bills would keep the state and local governments from banning or restricting the ownership of cryptocurrencies, or taxing them any differently from regular currencies.

State Representative Bryan Posthumus (R-Rockford) said that bill and others would help Michigan attract the crypto industry to the state.

“Cryptocurrency is here to stay. I believe that 20 years from now, it’ll be the foundation of our entire financial industry. And Michigan can be a national leader in that effort,” Posthumus said.

Another part of the four-bill bipartisan package would create rules for investing state funds in cryptocurrencies.

Michigan has already invested in some crypto market-tied funds. That includes ones related to Bitcoin and Ethereum.

Posthumus said the bills would add guardrails by requiring currencies to have a market capitalization of at least $250 billion to be considered for investment. He said current law has few safeguards.

“We wanted to make sure that we passed legislation to make sure legally that the treasurer had the authority to do this. But also, that would protect taxpayers and pensioners,” Posthumus said.

Crypto markets have gained a reputation for being both potentially lucrative and volatile. That’s especially with the rise of so-called “meme coins” often based around internet jokes or trends. President Trump recently launched his own meme coin right before he was sworn back into office.

A final piece of the package would give Bitcoin miners the chance to use abandoned state-owned oil and natural gas wells. The process called “mining” for Bitcoin — solving what’s essentially a math problem that underlies the creation of a new coin — is extremely time consuming and energy intensive.

The bill would create a new program to let selected miners access those abandoned wells, as long as they cap and clean up the site when they’re done. Participants in the program could also get a tax break.

Posthumus said it would provide a new use for those abandoned mines that could otherwise leak methane, a potent greenhouse gas, into the environment.

“Our thought process was well why don’t we give the opportunity to bitcoin miners to bid on these abandoned oil wells with the expectation that, assuming they win the bid, they can … also be required to fund the remediation,” Posthumus said.