One source is saying that the reason for bitcoin’s recent nosedive has to do with the idea that interest in China is starting to wan.
China: The Land of Bitcoin’s Life… and Death?
China is arguably the biggest bitcoin haven in the world. Home to two of the world’s largest crypto miners in Canaan Creative and Bitmain, the country has become rather “kind” and open-minded when it comes to digital currency despite several steps to seemingly shut them out before. Among the maneuvers taken to prevent crypto from getting “too big” were declaring initial coin offerings (ICOs) and foreign exchanges illegal in 2017 and 2018 respectively.
However, the country has suddenly changed its mind about a lot of crypto activities including mining, which despite several years of being up in the air, was declared legal in China just last month. Many regulators believed that crypto mining was damaging to the environment and were considering implementing a full ban on the extraction of new digital coins. However, it seems that ban will never go into effect.
Lastly, October saw bitcoin surge again given that current Chinese president Xi Jinping commented that blockchain had the power to empower China’s economy and infrastructure unlike any other form of technology. He pushed things further by stating that he would work to increase blockchain innovation within China’s borders over the next several months.
But now, it seems like the hype and hoopla surrounding BTC in China is coming to an end, which ultimately begs the question: did it ever really exist?
The idea that bitcoin could begin to falter again roughly one month after Jinping commented that blockchain had the power to do all these wonderful and amazing things suggests that while government agencies may be interested in blockchain, perhaps the general public isn’t quite as enthused.
Many in the industry are cementing the fact that Jinping’s comments had to do with blockchain and not with cryptocurrency itself. Several members of the public initially misread the president’s words, believing he was discussing bitcoin and its crypto cousins rather than the specific technology that brought them all to fruition. It was this confusion that led to bitcoin surging briefly in early and mid-November, but clarification of Jinping’s words brought the currency back down.
John Iadeluca – founder and CEO of Banz Capital – stated:
China’s firm stances on blockchain were initially a positive driver, [but] the Asian market apprehension increased once the state media clarified they didn’t mean cryptocurrency in that stance.
Prior, Chinese media outlet the South China Morning Post had written:
Blockchain Is at the Center; Not BTC
Blockchain technology innovation does not mean speculating on virtual currency.
Jeff Dorman – chief investment officer of Arca – has further commented that the industry is marred by the lack of new money flowing into it.