How China Has Influenced Bitcoin Price
Bitcoin price is falling recently, reminding us of the dramatic moments from the last year. Many things have changed since November 2018, but the fear of the cryptocurrency market remains.
Recent days were full of events that have influenced the cryptocurrency market. Although we’re providing you with regular updates about them, the current Bitcoin situation deserves a separate article.
An uncertain present
Exactly a year ago, the whole cryptocurrency industry was worried about Bitcoin’s future. The year 2018 was a hard time for the crypto enthusiasts since, after an uncontrolled digital gold rush, the cryptocurrency bubble burst. People were checking price charts, waiting for further development of the situation. And in 2019, it eventually got stabilized.
Recently, the crypto industry has been excited about the news coming from China. President Xi Jinping announced a shift in the Chinese policy toward the blockchain technology. According to his statement, the country will conduct research and support the development of this technology. Although the announcement didn’t contain any information about lifting the cryptocurrency ban, it didn’t stop enthusiasm and Bitcoin price rose around the $10,000
However, the initial fervor quickly vanished, and the price started to fall again. Investors probably noticed the lack of specific details in the Chinese announcement. Bitcoin began to retreat to $8,000, and other cryptocurrencies noted a significant drop as well. And China still hasn’t said the last word.
Blockchain gambit in China
Shanghai Internet Finance Rectification Agency and the Shanghai Bureau of the People’s Bank of China has issued a note forcing each district in this Chinese city to inspect every service bearing signs of being a crypto exchange. Thanks to that, every crypto-related activity in the city will fall under the government’s jurisdiction.
In the meantime, Weibo, a Chinese social media platform (remember – Western services like Facebook or Twitter are limited in this country), has introduced a strict regulation regarding the crypto industry. From now on, posts containing the word “blockchain” in relation to cryptocurrencies are forbidden. Due to new Weibo’s policy, official profiles of Binance and Tron were banned on this social media platform.
Both actions are a significant move by the Chinese government to subordinate cryptocurrency trading. Mainly social media restrictions are crucial. By disallowing to refer to blockchain as cryptocurrency, the authorities attempt to divide those concepts into the mind of common people. Thus, the decentralized context of crypto may soon be forgotten if those efforts succeed, and the centralized Chinese blockchain solution will be the only one known in this country.
Paint it red
But let’s go back to the Bitcoin and its price fluctuations. Since this year’s high peak during the last summer (the price almost reached $13,000 at the beginning of July), the coin’s value is continually falling. You may notice it on the chart below, presenting Bitcoins’ price during the last year. Of course, Bitcoin situation entails other currencies to fall as well, so seeing the red color on crypto-related should surprise no one.
If we bear in mind how Bitcoin’s price dived down a year ago, we can be worried about the state of the market in the near future. The current situation in the cryptocurrency industry isn’t optimistic either. For several months, the main topic in the crypto world concerns the regulatory aspects of digital assets. Concerns about the relation between crypto and state became a prime subject of the discussions on many levels.
In such unstable times, when entire exchanges need to reorient their goals because of the local market situation (Poloniex exiting the American market is a good example here), investors aren’t eager to get involved in investing in uncertain assets. As long as the situation doesn’t get stabilized, the shift in market trends is highly unpredictable.
On the bright side, the further price drop isn’t a necessary consequence of the prevailing mood in the cryptocurrency industry. The current bear market is a far different situation than the cryptocurrency crisis back in 2018, which was a consequence of the cryptocurrency bubble burst, and a similar outcome is highly unlikely. It’s possible that the end of the year will bring a needed shift in investors’ approach – and we hope it will happen.
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