It seems like China has gone absolute at this point. The People’s bank of China has released a notice that exchange of cryptocurrency is prohibited in the country. Chinese authorities have also introduced strict surveillance on crypto transactions. They made it clear that they will ban all crypto transactions from now on. We have seen Bitcoin price go down below $41,000 – once again, thanks to China.
Evergrande situation have also affected the situation earlier this week. Then we saw a trend back up in couple of days and now we are having more drama. Altcoins like Solona, Ethereum and Cardano are also affected by this FUD. It can be a devastating blow to crypto.
Yea! These bearish statements on crypto from china have raised volatility of entire crypto market. On the flip side let’s talk about some positive aspects. Lets have a look.
China is doing it since 2013
I must say that China is doing it since 2013. They are pushing back crypto since early days. Nothing has created more wealth in the past decade than the technologies they ban in china (Google, Twitter, Youtube). But this time most people are seeing this as an opportunity rather than panicking. May be china is basically handing a gift to all other countries in a silver platter. Because if china is not involved in here and rest of the world embracing it, they will be in trouble since this could be the future of financial system.
Since there China have banned crypto currencies (again), their network infrastructure just shrugged, and relocated to countries with increased freedom.
Why China Ban Bitcoin?
Have you heard that twitter users can now send each other Bitcoin as tips starting from this week? This undoubtedly indicates worldwide Bitcoin adaption.
They are afraid of losing control over their people, financial and monitory system. If other countries follow this decision, we really don’t know what could happen in the future. Tokens and currencies have no purpose if they are not fungible, exchangeable or used for something. Trading cyptos are officially banned in china since 2019. People manage to find a way around it even though there is enforcement. Seriously how many times will china ban crypto currency in some way, shape or form? We seriously lost count of it at this point because literally it is the same story every single month.
What happens if government regulate crypto?
It will be obviously a blow in short term. Because china is a big crypto market, especially for Bitcoin. That is the beautiful thing about Bitcoin, you cannot ban it. It is peer to peer. We just need a willing buyer.
When it comes to government regulation in crypto,
- Worst case is, when things go south, people will go panic. Since government have the abilities to marginalize it, they can successfully eliminate crypto use to a maximum extent. (If they want to). Worst case scenario of bitcoin is being a better form of gold.
- Best case scenario is, Block chain continues to prosper gradually and we figure out all the possible use cases of blockchain. We will see a lot of amazing applications on blockchain in near future.
When people come into a new paradigm shift, there are of course skepticism. It will take time to understand or get a clear picture. I don’t think we can call bitcoin a bubble anymore. This is how it happened, even in the past. They are empowering people and avoid financial surveillance over them. Somewhere between the good scenario and bad scenario, I am obviously hoping for the good. This is a revolution that is here to stay.