Ping pong. Bitcoin is up and then it’s down. Mad volatility continues as traders, speculators and investors turn to China and its latest stance on cryptocurrency.
Bitcoin has nosedived $3,000 in the course of 30 days, following its catapult to over $10,000 at the end of October when China’s President Xi Jinping announced the country’s full support of blockchain technology.
As BTC touched a six-month low of $6,627, according to data compiled by CoinMarketCap, market participants are rethinking China’s real message.
Since blockchain technology underpins Bitcoin and because of reports indicating that China was pushing for educational instruction around Bitcoin, Ethereum and other cryptocurrencies, the markets presumed that China was on the verge of a complete about-face with respect to legitimizing crypto trading after shutting down local exchanges in 2017.
Not so.
China’s central bank, the People’s Bank of China, issued a statement on Friday about the government’s latest crypto clampdown and warnings for consumers and business operators.
Says Primitive Ventures partner Dovey Wan,
“To highlight a few key points in the announcement
1. ICO, IFO, IEO, STO are all unauthorized illegal public offering and securities issuance, and potentially illegal fund-raising, financial fraud, pyramid schemes and other illegal crimes.
2. Shanghai law enforcement agency will conduct ‘Special rectification of cryptocurrency-related trading platform, which can be registered overseas, shall be immediately rectified and retired’.
3. They will further regulate trading platform whose servers are outside mainland but providing virtual currency trading services to domestic residents, and will continue to strengthen the clean-up [of] the fiat payment and settlement channels and gateways.
4. Investors should be careful not to mix blockchain technology with cryptocurrency, and there are multiple risks in cryptocurrency financing, issuance and trading (again, Blockchain not crypto).”
Jeff Dorman, chief investment officer of Arca, tells CNBC the markets got trampled.
“This was one of the worst weeks in the history of digital assets. The market is clearly in contraction, with no new money coming in to soak up the supply.”
Says Brian Kelly, chief executive officer of digital currency investment firm BKCM,
“The People’s Bank of China came out with a note reminding people that, you know what, cryptocurrency trading in China is still illegal. And so that got the speculators selling.”
Bitcoin is currently trading at $7,224, up 0.87%, at time of publishing.