China has indirectly declared an all-out war on crypto as the People’s Bank of China deems all crypto transactions illegal. As of now on, they will ban overseas exchanges from providing cryptocurrency services to local investors. Additionally, they will further crack down on illegal crypto trading locally.
This news has sent a tremor through the crypto market, both the prices of Bitcoin and Ethereum fell. Bitcoin was down 4.5% to trade at $41,509 a mere shadow of where it was in April at $63,000.
Despite the news which isn’t surprising given China’s crackdown on the overall tech ecosystem earlier this year. A move that is seen by many as counterintuitive to long-term growth and global relations.
Despite the ban, investors are still optimistic about Bitcoin’s long-term growth.
“We’ve seen little in the way of knee-jerk reaction from clients surrounding this news from China,” said Freddie Williams, who is a sales trader at digital asset firm GlobalBlock.
“This news follows the Evergrande crisis earlier this week that sent the market tumbling. The market bounced back before this recent news broke and we could see a similar same pattern play out following this recent update,” he further added.
The Evergrande crisis which he refers to is having investors playing wait and see on what China is going to do about Evergrande’s debt. It currently sits at just about over $300 billion. If they default, it might send the global market into a frenzy.
It’s clear to see that there is a battle going on with governments on how to handle crypto. I am assuming the Chinese government has plans to create a digital currency that will be accepted and used by the people of China.
