Since China began cracking down on Bitcoin, many, many investors have sold the funds they had in the cryptocurrency and in each of these “cycles of desperation” it has fallen in price.
Last June 22, the news that China’s six major banks and Alipay are banned from accepting or using cryptocurrencies. The banks will suspend the accounts of people doing business with cryptocurrencies.
Important facts:
- China’s veto had already been announced since 2013
- Electricity is very cheap there, so the miners had a lot of benefits.
- A crackdown on miners has begun in China.
- Large mining groups have ceased operations in China.
Bitcoin mining was the other area affected. China has closed mining farms in Xinjiang and Inner Mongolia, also in Yunnan and Sichuan, what these provinces have in common is that their main energy sources are renewable and environmentally friendly.
China’s influence over Bitcoin
- Chinese investors play an important role in the crypto market.
- China accounts for more than 75% of the mining market.
- Many fear that China’s power could control the supply of Bitcoin.
China’s crackdown is quite a blow against the cryptocurrency market. Many traders in China are desperately trading their Bitcoins for fear of a major crackdown.
Mining farms are closed and Chinese miners have been looking to relocate to continue mining, this has caused the Bitcoin hash rate to be involved in a decline.
Many investors prefer to take losses at this time by ceasing to use their bitcoins rather than taking losses in the future, and many companies are increasing their investment in mining in order to attack the Chinese dominance.
China ban may be good news
- The market will no longer respond to news from China as violently.
- Something similar to what is happening with Elon Musk, fewer and fewer investors are paying attention to his tweets.
- Decentralization benefits from this whole issue
Bitcoin’s decline also affects other cryptocurrencies such as Ethereum and Dogecoin which also drop in price every time China makes one of its dreaded announcements.
The influence of many factors such as the aforementioned Elon Musk has caused many investors to prepare for any news and give it real importance.
In China, investors are not protected from any kind of loss involving cryptocurrencies, which is why many allegedly profitable exchanges have appeared on search engines in the Asian country.
In conclusion, cryptocurrencies have an immense future and that causes sensations in the governments of the world, some try to receive them well and others want to ban them as China has done.
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