The Chinese Bitcoin Exodus
By Hrishi Vora, Growth Strategist at Moving
What is China upto?
The Crypto hub of the world hosts around 75% of the world’s bitcoin mining capacity supported by very well established technology supply chains and cheap electricity in the country has just ordered the Crypto Exodus!
China, a mighty force and an influential whale in the global economy and its recent actions on the crypto market, is sending ripples worldwide.
China’s financial industry has just regulated extreme limitations on cryptocurrency in the country. China’s strong policy change immediately affected the markets.
- Bitcoin went down to $30,000 — down 30% right after the news was made public.
- Ether dropped 40% as well from $3,400 to below the $2,000 mark post-announcement.
China’s history of cryptocurrency
China which accounts for a whopping 90% of crypto mining, has been a hotbed for cryptocurrency activities. It all started in 2013. Since then, China has been against Bitcoin and other coins when China banned banks and domestic exchanges from using cryptocurrencies in any transaction.
Back in September 2017, when the authorities again decided to hit their next hammer on the Crypto evolving market by banning and terming initial coin offerings (ICOs) as pyramid schemes and financial scams. The final nail in the coffin was in 2018, where China’s exit caused Bitcoin to crash by a massive 65%. But Bitcoin recovered and came out standing strong after it’s hit!
History prompts us to believe strongly that these new regulations directly respond to the jump in popularity of cryptocurrencies in China, especially after the Pandemic hit the world.
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Simplifying the Chinese Agenda
The Chinese Agenda : Financial Stability — Dominance — Energy Consumption
- The highly volatile & speculative nature of the Crypto market, which puts the country’s economic position at stake to an extent, a factor that makes the Chinese authorities uncomfortable, a country that cannot stand anything outside its control.
- This attempt to regulate cryptocurrency activities in the country is just a precursor to force its own digital currency & maintain its dominating authority as China plans to roll out its own digital yuan with the ‘same underlying technology as Bitcoin’ that will be controlled by the People’s Bank of China, its central bank.
- Beijing also wants to shut down cryptocurrency-mining activities, which is projected to generate more than 130 million metric tons of carbon emissions by 2024. This massive volume of carbon emissions undermines China’s promise to make China carbon neutral by 2060.
What’s the future for crypto?
The answer is simple and I’m sure you know it. To the moooon!
Bitcoin is volatile. It is safe to understand Bitcoin will regain its lost ground. How are we so certain? Well, history! Bitcoin and other cryptocurrencies have always managed to come back stronger after taking these Big Hits — Be it the Past Chinese crackdown, Elon’s Tweets or our favourite Bulls & Bears.
Although Crypto will miss Chinese Investors! Especially now when China, one of the world’s economic superpower, had witnessed a surge in new investors in the stock market late last year. These investors were a massive pool of resources for the Cryptocurrency market.
Without China in the cryptocurrency space, we can see a void in terms of enormous investing potential power and falling trust from them. Bitcoin and Ethereum, the industry’s well known and reputable cryptocurrencies, have already got it, leaving us to think about the upcoming hardships the smaller coins in the market will face.
Only time will tell us if these regulations have impacted Crypto, as history has always shown Cryptocurrencies to be the real winners.
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