Skip to main content

Bitcoin BTC/USD Gaining Momentum as China’s Bitcoin Ban Seen Backfiring

Bitcoin (BTC/USD) prices are grinding higher this week on renewed optimism that the blockchain will overcome China’s latest regulatory crackdown.
// -- Discuss and ask questions in our community on Workplace. Don't have an account? Send Jonas Borchgrevink an email -- //
Prices continued to trade comfortably north of $3,900 at the start of Tuesday trading. Prices shot up nearly 7% on Tuesday, according to Bitstamp. The BTC/USD was last seen trading at $3,909.00, where it was little changed from its previous close.
At present values, bitcoin is capitalized at roughly $65 billion, according to CoinMarketCap. That’s more than double the next leading blockchain currency Ethereum.
// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

S&P’s China Downgrade Highlights Limits of Bitcoin Ban

Last week, Standard & Poor’s downgraded China’s sovereign credit rating in an apparent rebuke of Beijing’s recent regulatory fight to curb systemic risks. S&P triggered the downgrade after concluding that Beijing’s “de-risking” efforts aren’t moving fast enough to cool credit growth.
S&P analysts continue to see corporate-sector credit at 9%, which is higher than the desired ratio. The U.S.-based credit rating agency says China’s deleveraging efforts are likely to be “much more gradual than we thought could have been the case early this year.”
The downgrade occurred mere weeks after Beijing began its regulatory assault on cryptocurrency. Although we’re not suggesting that the downgrade was because of those actions, banning bitcoin clearly hasn’t been enough to improve China’s image in the eyes of regulators.
The global crypto market has expanded rapidly over the past nine months, but is only a drop in the bucket from China’s perspective. The market for bitcoin and even ICOs simply isn’t big enough to be a real threat to the world’s No. 2 economy.
However, that may soon change. There may come a time when the cryptocurrency market is simply too valuable to pass up. This is likely to occur when cryptos have the potential to replace many of the yuan’s everyday functions. This may lead regulators to a different conclusion.
There’s already evidence of Chinese investors moving to market-friendly Japan, which recently recognized bitcoin as a legitimate form of payment. The Chinese shuffle will also lead mainland investors to South Korea, another regional player developing a favorable outlook on cryptos.
Still, the loss of China is an immediate blow to the bitcoin community. Prior to the nationwide ban on Chinese exchanges, the mainland market accounted for 10-13% of global bitcoin trades. Replacing those order books won’t be easy in the short term.

Comments

Post a Comment

Popular posts from this blog

Case-By-Case or Cease-and-Desist? In Search Of a New Approach to ICOs

That rumble you hear is the sound of regulators around the world mobilizing resources to tackle the pressing matter of token sales. Yet, in spite of the spectacular growth of blockchain token-based funding, no one seems to have a clear idea of what type of rules to introduce. The resulting uncertainty (not to mention ridicule) is left hindering progress as money flows to unviable projects and investors are left vulnerable to foul play – exactly what regulation is supposed to prevent. Perhaps a new approach is needed. But to see where this could go, it's worth stepping back and asking what we expect the regulation to do. Safety belt First, why do we need regulation, not just of finance, but of anything at all? To protect us. At its roots, that is the main role of government – to protect its citizens from avoidable harm and extreme loss brought about by others or from our own lack of common sense. When it comes to securities, that usually means stopping us from making poor decisions…
Post a Comment
Read more

Frequently asked questions about Bitcoin

What is Bitcoin? Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping systemin existence. Who created Bitcoin? Bitcoin is the first implementation of a concept called crypto-currency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left the project in late 2010 without revealing much about himself. The community has since grown exponentially with many developers w…
Post a Comment
Read more

Is Bitcoin Legal?

Bitcoin is of interest to law enforcement agencies, tax authorities, and legal regulators, all of which are trying to understand how the cryptocurrency fits into existing frameworks. The legality of your bitcoin activities will depend on who you are, where you live, and what you are doing with it. Bitcoin has proven to be a contentious issue for regulators and law enforcers, both of which have targeted the digital currency in an attempt to control its use. We are still early on in the game, and many legal authorities are still struggling to understand the cryptocurrency, let alone make laws around it. Amid all this uncertainty, one question stands out: is bitcoin legal? The answer is, yes, depending on what you’re doing with it. Read on for our guide to the complex legal landscape surrounding bitcoin. Most of the discussion concerns the US, where many of the legal dramas are currently playing out. Alternatively, you can access our comprehensive Regulation Report for worldwide expert …
Post a Comment
Read more