The mainstream media has successfully driven down cryptocurrency prices by spreading news that is not new at all. China is a region where cryptocurrency trading has been discouraged and made nearly impossible for many years now. Nothing has changed in this regard, yet some media outlets claim this is an entirely new development.
There Is No New “Ban” On Bitcoin
Per a recent Reuters report, one would be inclined to believe China’s government has successfully banned Bitcoin from the country. Such a move would not come as a big surprise, as the country has no plans on ever accepting any currency that isn’t the Yuan. However, it is essential to get the more significant story correct rather than try and spin it into something that isn’t real.
Several years ago, the Chinese government decided to curb Bitcoin and cryptocurrency trading. Financial institutions have been discouraged – and even prohibited – from providing services to any user or company involved in the cryptocurrency space. It is one of the main reasons why China has become largely irrelevant on the exchange and trading platform many years ago.
While it is true the majority of Bitcoin mining is still centered around China, that has little or no impact on trading. For miners, it can be challenging to sell BTC earnings, but there are always ways to circumvent any roadblocks governments, or other authorities attempt to create. In the “hit piece” released by Reuters, all of those facts have been confirmed again, without including any new developments.
Instead, the authorities issuing this joint statement have merely renewed their negative stance on Bitcoin and other similar currencies. There is nothing new to speak of, nor is Bitcoin suddenly “banned” in the country, even if trading it is nearly impossible. It is, by default, impossible to ban a currency no one has any say over. Making it difficult to use is possible, but that isn’t always in government officials’ best interests. Individuals can still hold cryptocurrencies in China, just like it has been for many years.
Why The Panic Regarding China?
Considering how none of these developments are news in the slightest, the widespread market panic is a bit curious. However, one has to remember there are plenty of new people in the space. Most of them were not around in 2017 or 2019 when China cracked down on cryptocurrencies twice. They will see this news and consider it “something new” rather than confirm events that date back multiple years.
Moreover, it is not new that cryptocurrency investing and trading is risky. Just like other financial markets, prices will go up and down when people least expect it. Volatility is the main draw for Bitcoin and similar currencies, yet not everyone can stomach the bearish trends. Additionally, many people remain uneducated about previous events, such as China clamping down on cryptocurrency activity multiple times – without much success.
It is crucial to note that Chinese residents – just like anyone else in the world – can own Bitcoin or any other cryptocurrencies. Using those assets is a different matter, depending on where one lives. The decentralized nature of these assets prevents governments, authorities, and financial institutions from impacting the appeal of these currencies. Any attempt to do so is not even newsworthy, as it will make absolutely no difference.