It is evident the news coming out of China has spooked cryptocurrency markets last week. To real experts, this comes as a major surprise. After all, China is only a minor country when it comes to Bitcoin trading. Moreover, their regulations only affect companies in that country or dealing with customers from China. It is evident the government is risk-averse when it comes to Bitcoin and altcoins. However, CHina’s position in the Bitcoin world isn’t what it used to be. In fact, their entire debacle should never trigger a price drop whatsoever.
For the longest time, many people viewed China as a major Bitcoin trading hub. Until early 2017, that was absolutely correct. Ever since local exchanges froze withdrawals, things have changed rapidly. Back then, a few people knew this was only a sign of things to come. Seven months down the road, that prediction turns out to be correct. Chinese regulators don’t like Bitcoin because they can’t control it. As a result, they punish local users and companies for showing an interest in cryptocurrency.
Chinese Exchanges Don’t Control the Market
What is pretty troublesome is how this news triggers a panic selling behavior. The Bitcoin price dropped from $4,500 and went as low as $2,900 in quick succession. This effect should never cause global panic whatsoever. In fact, it shouldn’t have any impact at all.Chinese exchanges will remain operational for another six weeks. Many people seemingly forget this aspect. Even when they suspend services, this will be a temporary measure first and foremost.
To put this into perspective, China represents very little trading volume .It came to power between January 2014 and lost its momentum in January 2017. Ever since that time, China has been nothing but a blip on the radar. Local traders decided to push other currencies to new heights, including Ethereum, NEO, and Litecoin. Japan and South Korea are the new powerhouses in the Bitcoin exchange industry. Neither of those countries is banning or prohibiting anything. In fact, Bitcoin is an official legal currency in Japan.
Moreover, Chinese exchanges aren’t shutting down entirely. They will still allow crypt-to-crypto exchanges without issues. Only CNY trades are affected, which were virtually irrelevant to begin with. People will find other ways to buy Bitcoin with the Yuan, though, that much is certain. Centralized platforms are always the weakest link as they can be controlled and regulated. Things are looking better for Bitcoin than ever before. Anyone who panic sold will have to buy back in at a higher price.
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