Anyone looking to get involved in Bitcoin is anxiously awaiting what the Chinese markets will do in the coming days. Several billion yuan worth of BTC has been purchased since June 2016, and prices skyrocketed throughout the second half of the year. But the early positive trend seems over, as prices are plummeting all over the world. Rumors of tighter Chinese Bitcoin regulation are looming overhead, creating market instability.
What Does The Future Hold For Bitcoin’s Value?
Policy makers have a habit of attempting to ruin a positive trend. China is introducing capital controls left, right, and center, yet sees no positive results of doing so. After limiting foreign exchange and gold purchasing options, investors have been flocking to Bitcoin to avoid the dropping Yuan value. As a result of this demand for the cryptocurrency, the BTC price has skyrocketed throughout the second half of 2016.
Unfortunately, it looks like China’s dominance of the Bitcoin market may be coming to an end very soon. The previous time the price per Bitcoin reached US$1,100 or more, the Chinese government tightened Bitcoin transaction regulations.
With the BTC price looming around the same mark yesterday morning, a lot of holders got nervous and decided to liquidate assets in quick succession. As a result, Bitcoin is now trading at just above US$925, a far cry away from its price point just two days ago.
Although the Chinese government has not officially announced new Bitcoin regulations yet, a lot of speculators feel this is only a matter of time. It would make a lot of sense if the government decided to curb Bitcoin purchases moving forward, albeit it is unclear how they can do so.
All they can do is go after the Chinese exchanges, which are centralized and present a “controllable’ target. Platforms such as LocalBitcoins are a lot harder to influence, though. In the end, Bitcoin traders do not need an exchange platform to buy and sell cryptocurrency.
Now that the Bitcoin price has dropped significantly, there will be a lot of fear-mongering and speculation as to what will happen in the future. Bitcoin is hardly ever affected by any regulatory or monetary policies, and any decision made in China should have no effect on the future price. Then again, most people still believe Bitcoin can be regulated, while it is only the centralized companies that can be influenced.
Header image courtesy of Shutterstock