At the beginning of 2013, BTC price was worth less than $15, which surged to $260 in April only to be back at $80 next month. Two months before China first struck, in October the same year, BTC price was under $90 to top out at $1,165 next month only to be back at $385 in mid-Dec.
The reports of China banning Bitcoin have permeated the cryptocurrency market.In the backdrop of the massive rally and exhausted technicals, the onslaught of Tesla CEO Elon Musk going on about the environmental concerns and US Treasury including crypto in its new tax regime because the agency sees it as rising in importance over the years ended up driving fear among the people and inciting a sell-off in the market. The price of Bitcoin crashed to $30k on Coinbase and even lower on other cryptocurrency exchanges, representing a 54% drawdown. It has now taken to range between $33,500 and $42,500.But among all the FUD, China banning Bitcoin is the one that hit the market thrice just this week and still managed to affect the market every time.What’s even more interesting is the effect that this isn’t even the first time China banned Bitcoin. The first time this news came was in December 2013, about seven and a half years back, and it still manages to instill fear among people.
At this point, Crypto Twitter actually wants China to ban Bitcoin and just be done with it.
The first week of December 2013 was when China first banned its banks from doing business with companies dealing with Bitcoin. Two months before that, in October, BTC was under $90 only to top out at just about $1,165 on Nov. 25th. By mid-Dec. the price was back at $385.
Early in the week, China first hit the market when three self-regulating bodies reiterated the country’s stance on crypto from 2017 that the banks and payment companies can’t do business with those involved in crypto.
Moving into the weekend, China’s Financial Stability and Development Committee, chaired by Vice Premier Liu He, called for more regulation for Bitcoin, which again is nothing new as just last month the central bank governor called Bitcoin, an investment class that requires regulation. While the mainstream media defines it as a crackdown, regulations have always been inevitable and only show that governments realize that this asset class is not going anywhere and needs rules and regulations the same as legacy markets.
Right on its heels, a government proposal published on Friday said that crypto exchanges operating in Hong Kong would have to be licensed by the city’s markets regulator and only be allowed to provide services to professional investors, “at least for the initial stage of the licensing regime.”Hong Kong’s Financial Services and the Treasury Bureau (FSTB) has been consulting the market since last year and said that it intends to propose legislative changes to turn its proposals into law in the upcoming 2021-22 session of the city’s legislative assembly.Additionally, the government is targeting crypto mining which is yet again a bullish thing in itself as it is a counter to China controlling the Bitcoin network and that Bitcoin mining mostly involves the use of coal.
The ban on mining is actually only restricted to mining operations run by coal-fired thermoelectric power plants, which have always been the case. Mining operations based on hydroelectric power plants are not banned. Michael Saylor, founder & CEO of MicroStrategy said,
“A crackdown on miners in China would radically reduce the carbon footprint of Bitcoin mining, increase the profitability of all the remaining Bitcoin miners, reduce nagging China FUD, support progress toward our ESG goals, & drive up the value of BTC.”