Chinese making crypto transactions illegal lowered the price of Bitcoin on Friday. But China did not impose a ban on “owning cryptocurrencies”, which likely prevented further losses. The central bank has warned of criminal investigations into people suspected of buying and trading cryptocurrencies.
China takes its strongest step towards cryptocurrencies
Because if we observe the previous bans, it was the first time that it was allegedly “illegal”. But analystsdollarser said that Beijing fell short of banning ownership and shielded Bitcoin from long-term price pressure amid an ongoing crackdown. The People’s Bank of China said that, according to a translated version of its statement, Bitcoin, Ether, and Tether are “illegal and should not and cannot be used as currency in the market.” The PBOC said that cryptocurrencies do not have the same legal basis as fiat currency, as they are issued by non-monetary authorities and use cryptographic technology.
But Oanda’s senior market analyst Ed Moya said in a note Friday that the government is not banning the possession of cryptocurrencies, a move that will “hit the entire crypto space”:
Banning crypto holdings would probably send crypto 20% lower.
How did it affect the Bitcoin price?
Bitcoin initially fell by 9% and approached $41,000. However, Bitcoin, Ether and Tether broke out of their intraday lows at noon on Friday. Thus, China conducted a years-long campaign to re-establish virtual currencies dating back to 2013, when banks banned the execution of Bitcoin transactions. In 2017, he ordered local cryptocurrency exchanges to cease operating dollars, forcing people in China to use overseas exchanges. Earlier this year, Beijing blocked financial institutions from offering crypto services and Bitcoin mining. Now China is going even further, targeting individuals, not just businesses, and closing off ways to cross old borders.
On Friday, the PBOC warned that individuals suspected of a range of activities, such as trading cryptocurrencies and providing price information, will face criminal investigation. It also targeted overseas, online virtual cryptocurrency exchanges serving Chinese residents, saying they were doing illegal business. Amid the crackdowns, China has voiced concerns about environmental concerns over mining, as well as the use of cryptocurrencies in financial crimes and triggering financial instability. But since China has banned the series of crypto activitydollars, the roots of the project go back to 2014 and from 2017 it is being tested with commercial institutions and working on its own digital yuan.
Why isn’t the latest ban so bad for Bitcoin?
But there was a big sign that investors would eventually put aside China’s latest announcement, TrendSpider chief market analyst Jake Wujastyk told Insider on Friday. “If you look at Bitcoin’s low on September 20 (around $36,900), we haven’t even seen lows that low,” he said on Friday. Bitcoin “should have broken new lows and hasn’t – at least not yet,” Wujastyk said.
Right now (the news) is making the market move, but it won’t make a big difference in the long run… China has been crashing a lot of things lately.
President Xi Jinping launches joint welfare campaign
China has been imposing restrictions and rule changes on a variety of companies in recent months, from technology manufacturers to educational service providers. It’s part of a campaign to reform business and social practices and to prevent what they see as security risks from large companies listing securities in the US. President Xi Jinping also launched a “common prosperity” campaign targeting China’s growing wealth inequalities. “To us (China) it looks like a reaction to the news about Evergrande earlier this week,” Friday’s move, Bitcoin IRA COO and co-founder Chris Kline told Insider. He was talking about the possibility of China’s second largest real estate developer to default on debts of $309 billion.
Kline, whose fintech platform allows its customers to invest in cryptocurrencies using retirement, said, “What happened in Evergrande put the state-controlled company to shame. I would expect to see more restraints and regulatory action. Obviously, Bitcoin was the first target,” he said. Overall, the crypto transactions announcement “is not surprising or shocking to us,” he said.
Robert Kiyosaki called out on Twitter:
Famous real estate investor and author of the best-selling book “Rich Dad, Poor Dad” on financial literacy, Robert Kiyosaki took to Twitter to suggest the real reason China announced another ban on Bitcoin and all other cryptocurrencies: This ban This comes after China began throttling crypto miners earlier this year.
A new Chinese ban hits the crypto market
In addition to investing in real estate, Robert Kiyosaki also prefers to protect his funds against inflation by investing in gold, silver and Bitcoin. Last year, he anticipated the upcoming collapse of the dollar and shared his thoughts on the benefits of Bitcoin and gold and silver in the future with an army of Twitter followers. Now, he has commented on new documents released by the People’s Bank of China (PBOC). These documents describing the operations where all cryptocurrencies are illegal were published in early September, but only made public on Friday.
PBOC’s announcement pushed the entire crypto market into the red, forcing Bitcoin to drop to $41,000 and Ethereum to drop below $3,000. This was the second major blow to the crypto market this week – the first came from China, when the second largest residential developer China Evergrande Group failed to pay its shareholders 2 trillion yuan and saw the price.