China bans payments? So what? Values are up!
Despite the continued attempts by the Chinese government to quash crypto-related transactions in the mainland, the digital asset market is rallying and doing so in a very self-determining fashion.
For many years until recently, Chinese mining entities, some of which have been absolutely enormous, have been considered to be a large and important part of the infrastructure of cryptocurrency and the sheer size of their rigs have been considered an important part of the power that mines cryptocurrency and also that holds its value by making it hard to mine.
The People’s Bank of China’s notice forbidding banks and other financial institutions from offering services related to crypto is just the latest attempt by the government to stop its citizens using cryptocurrency, following years of notices, bans, forbidding and crackdowns.
Trading crypto-currency has officially been banned in China since 2019, though it has continued online through overseas exchanges, which are very much preferred by Chinese traders compared with domestic Chinese venues.
Perhaps before the inevitable crackdown on the large mining rigs by the Chinese authorities it would have been quiet fair to assume that should these activities suddenly stop, and Chinese mining, which benefitted from cheap or free electricity would suddenly end and create a situation where mining becomes easier for everyone else.
This did not happen, and in fact the whole crypto ecosystem demonstrated its own strength and sustainability.
Confidence rose even further when no issue surfaced as a result of the banning of crypto payments by the Chinese government last week, and although Bitcoin fell to a low of just below $41,000 when this was announced, it rallied to about $44,000 on Monday September 29, which is the same level as before the ban.
It’s up approximately 7% since the morning of Sunday September 26. Ether is also back above last week’s highs of more than $3,100 after again dipping below $3,000 on Friday September 24. It’s up 13 per cent over the past 24 hours.
if the free market world can contribute to ensuring this level of sustainability and democratic Western countries are beginning to embrace regulation and tax treatment for cryptocurrencies in the way Estonia’s pioneering effort led the way, this is a very good sign indeed.