The Chinese Government and crypto – Markets move lower.
By James Kouzinas
24th September 2021
Recent news out of China is likely to be a major contributing factor to the wild swings in cryptocurrency markets that you’ve seen over the past couple of days.
The country just released some more information about its cryptocurrency ban, stating: “Recently, virtual currency trading hype activities have risen, disrupting economic and financial order, breeding illegal and criminal activities such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering.”
Along with this statement, they published an official notice in an attempt to make their stance on crypto clear. Basically, the notice says that virtual currencies, like Bitcoin and Ethereum, don’t have the same legal status as regulated currencies, like the Chinese Yuan. The notice also reiterates that trading cryptocurrencies is illegal.
China has always had an interesting relationship with crypto, often flip-flopping on whether it’s legal or not. Their ever-changing stance always generates significant media attention, and unsurprisingly, the price and market volatility of cryptocurrencies.
This time, though, it does appear that China is firm on its stance.
Earlier this year, in February 2021, China targeted mining operations in the provinces of Inner Mongolia and Xinjiang, telling them to halt operations. Then in May, China’s financial committee confirmed that Bitcoin mining, as a sector, must be monitored to “resolutely prevent and control financial risks.” This news had a dramatic effect and sent Bitcoin’s price tumbling by at least 12%.
Given their history of flip-flopping, who knows if China will stay true to its words about cryptocurrency. But either way, their actions will certainly move markets!
“At its core, cryptocurrency is typically decentralized digital money designed to be used over the internet. Bitcoin, which launched in 2008, was the first cryptocurrency, and it remains by far the biggest, most influential, and best-known.”