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Although the suspension of Huobi’s products is temporary, the news is expected to contribute to the growth of the existing fear that has gripped the cryptocurrency market in the past few weeks.
One of the leading spot and derivatives cryptocurrency exchange Huobi has temporarily suspended all of its leveraged investment products including Futures contracts, and ETP in some countries due to the recent crypto market flash crash that wiped out almost $1 trillion in less than a week.
“Due to recent dynamic changes in the market, protect the interests of investors, a portion of services such as futures contracts, ETP, or other leveraged investment products are temporarily not available to new users from a few specified countries and regions,” reads Huobi’s statement shared with CoinDesk.
Further, the firm also noted that it will suspend its cryptocurrency mining services in mainland China following the market dynamics. Moreover, the country has stepped up its operations to crack down cryptocurrency trading.
“Huobi always strives to abide by the evolving policies and regulations of each jurisdiction to adhere to the risk and preserve the well-being of our users and their assets,” the company explained.
Huobi and Crypto Market
Although the suspension is temporary, the news is expected to add to the existing fear that has gripped the cryptocurrency market in the past few weeks. The cryptocurrency market cap is down to around $1.5 trillion at the time of reporting from nearly $2.5 a few weeks ago, according to market data provided by CoinGecko.
Bitcoin dropped to as low as $30,681.50 in the past few days but was trading around $36,419.45 at the time of reporting according to Binance-backed Coinmarketcap. The entire altcoin market also felt the selling pressure during the past few days. Ethereum, the second-largest digital asset by market capitalization dropped to as low as $1,737.47 from an all-time high of $4,362.35 a few weeks ago.
To greater extents, Tesla Inc‘s (NASDAQ: TSLA) decision to stop accepting Bitcoin as a form of payment has contributed to the recent crypto market crash. Additionally, the constant tweets by Elon Musk significantly increased the volatility. In some cases, double percent figures were recorded.
Huobi suspending mining activities means the Bitcoin blockchain will have reduced miners to confirm and secure transactions. Notably, according to data aggregated by BTC.com, Huobi records a hash rate of 4% of the entire hash rate.
The cryptocurrency exchange firm has most of its customers from the greater Asian region, whereby it provides key crypto services to Chinese traders. The Chinese government through its central bank has been rolling out its Central Backed Digital Currency (CBDC) dubbed Digital Yuan in its local market.
Huobi did not specify the countries affected by the latest suspensions of services, which are expected to be resumed once the market stabilizes.