Yesterday the market was shocked due to negative news from China. From bitcoin (BTC) price plunged and the panic is still good for many traders and investors! But the old hands in this market will have slept soundly tonight. It is not the first time that we see such news from China.
Chinese bitcoin (BTC) banned from the past
China was early on when it came to banning cryptocurrencies. Back in 2009, the country banned the use of cryptocurrency as payment for goods. In the years that followed, the country also imposed Bitcoin-specific bans and we occasionally saw fake reporting that also caused significant price swings, such as in 2014.
Then, in 2017, cryptocurrency exchanges were banned. Remember, China accounted for 90% of the total crypto market at the time. The central bank of the (authoritarian) country therefore went for it with a straight leg through crypto exchanges and initial coin offerings (ICOs). Deputy governor of the central bank then did pronunciations as “There is only one thing left to do: sit on the riverbank and watch the body of bitcoin float by one day.”
In the years that followed, China also came up with all kinds of measures. For example, it ordered Chinese banks not to do business with bitcoin miners, and of course mining was later completely banned. The latter caused a correction of more than 50% against bitcoins all-time high (ATH) from nearly $65,000 in April this year.
China is still waiting on the river bank
It was, of course, somewhat to be expected that a country like China would do everything in its power to combat centralized and transparent Bitcoin. The cryptocurrency that enables people to really own money themselves, to send it to anyone, anywhere in the world, obviously does not fit in the vein of a country that has a social credit scoresystem and tries to control everything.
But what strikes me is that Bitcoin is stronger than ever. Despite all the vehement reports of broad bans in the country that once made up the bulk of the crypto market, bitcoin is still here. The Chinese government has been sitting on the shore for years waiting for the body of Bitcoin that they believe will float by. But will that ever happen? I think China is seriously underestimating the power of decentrality, transparency and democracy.
–
