The Chinese authorities are cracking down on cryptocurrencies. Some experts believe that China’s Bitcoin ban news may be positive for the future.
June 23, 2021, | AtoZ Markets – Bitcoin has started the new week with a very negative chart. After capturing the level of $41,000 last week, the premier cryptocurrency plunged to $28,800 yesterday. It is known that the biggest factor in the recent decline in Bitcoin price is China’s mining and trade bans.
However, experts say that the move of the headquarters of the leading cryptocurrency from China to the West is quite positive for the future.
Ban on Bitcoin expands in China
The announcement of the Chinese State Council on May 21 that strict measures will be taken for cryptocurrency mining shocked the markets and all cryptocurrencies suffered a great loss in value with the sharp decline. After this development, China’s Inner Mongolia, Xinjiang, and Qinghai provinces introduced bans on Bitcoin mining.
With the bans that started in Sichuan province in the past few days, Bitcoin mining has started in China. Many businesses had to close. In the official statement made by Deputy Prime Minister Liu He, the reason for the pressure on Bitcoin mining was “resolutely preventing the transmission of individual risks to the social sphere”. In addition, reducing the carbon footprint and efficient use of energy were among the reasons for the bans.
Bitcoin bans are contradictory within itself
Nick Carter, the co-founder of Coin Metrics, commented on the news from China in his article published on CoinDesk yesterday. In the article titled “Go West, Bitcoin”, it was stated that the news from China showed the biggest change in the geographical structure of Bitcoin mining since the beginning of the industrial mining era.
Reminding that China hosted 65% of the Bitcoin hash rate in April 2020, Carter said that 12 months from now, this rate will be very low. He also stated that the rationale for reducing the carbon footprint and using energy efficiently, which China put forward in the Bitcoin bans, contradicts the country’s continued use of coal energy. According to Carter, the bans in the Sichuan region, where clean energy is located, also reveal this contradiction.
Carter recalled views that Bitcoin was restricted because it rivaled China’s digital yuan project. In addition, he stated that preventing uncontrollable capital outflows may be one of the reasons for these bans. Stating that the energy distribution disorder in China may be one of the overlooked reasons for these bans, Carter stated that these bans will be a big win for Bitcoin’s decentralization, no matter what.
China Bitcoin bans great news
Brandon Arvanaghi, one of the former engineers of Gemini crypto exchange, expressed similar views to Nick Carter in an interview with the Bloomberg channel. While Arvanaghi stated that the ban news from China was great, he compared the country’s anti-Bitcoin sentiment to Facebook and Google bans. Stating that it is positive that the entire Bitcoin mining industry can be shut down with a single phone, Arvanaghi added that BTC is the best store of value in the history of the world:
“This is great news. I see this as libertarian technology’s escape from Chinese prohibitions. This shows that Bitcoin is working correctly, not incorrectly. Countries are now choosing a side. I find Bitcoin’s exit from China to the US incredibly positive in the medium and long term.”
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