Last Friday, China caused a stir once again. Ten authorities, including the National Bank and the Supreme Court, stated unequivocally: Firstly, all transactions in cryptocurrencies are now considered illegal; secondly, the creation of crypto units, the so-called mining, will be put an end to in the Middle Kingdom.
Martin Hock Editor in Business. Follow I follow
For the industry, this was actually not an insignificant announcement: it is not only the most populous country on Earth, but according to the data service Chainalysis, the country that has the fourth largest importance for the use of crypto assets internationally.
In fact, the prices of cryptocurrencies fell as a result. Bitcoin, still the size leader, lost just under 9 percent. But this left the Cybermünze in its most recent – due to the inherent volatility large – trading range. Technically, the price fell below the 200-day line, but it had already done so for the first time in June. The longer-term trend has been negative since April, and nothing substantial changed on Friday. On Monday, the price again approached the mark of 44 000 dollars, still 2,5 percent, and Friday’s peak is again reached, again crossing the 200-day line.
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One reason is that Friday’s announcement contained essentially nothing new. Crypto transactions have been banned in China before, and mining has been fought before. While three out of four Bitcoin were still generated in China in September 2019, it was not even every second. However, there is still a reaction to the latest announcement: the crypto exchanges Huobi and Binance declared that they would no longer accept users from the People’s Republic in the future and would close existing accounts by the end of the year.
Now there are no more ambiguities, tweeted Henri Arslanian, “crypto Leader” of the management consulting group PwC. “This regulatory frenzy seems to be coming in cascades and is just one of countless, ongoing attempts to regulate the use of cryptocurrencies in China,” says Julian Hosp, founder of crypto platform CakeDeFi. “So far, however, it has yielded little, and the impact on the crypto market also seems less significant each time than before.” This time, however, there is a striking influx of new capital into decentralized crypto exchanges such as Uniswap to keep cryptocurrencies completely decentralized. Even so far, Chinese users had already found ways to circumvent bans. Some crypto fans are particularly optimistic: Bitcoin’s price increases have often been preceded by attempts to ban crypto investments.
