One of the reasons why Bitcoin and other cryptocurrencies were struggling in the past months is due to the regulatory changes that happened in the industry. In a matter of eight months, regulators had different approaches on cryptocurrencies. Some countries had a more open approach to cryptos while there are regulators that have a more open approach even working with crypto businesses.
If you are going to ask someone like Tom Lee, he sees regulatory changes a necessary thing. In fact, the US Securities and Exchange Commission even considered Bitcoin and Ethereum as commodities and not as securities.
However, China is among the first to ban crypto related activities. The reason behind China’s decision could be because of the possible capital outflow caused by digital currencies’ volatility. China started its crackdown on crypto-related activities in September last year. The country targeted cryptocurrency exchanges as well as ICOs. In addition to this, there are also reports of a crackdown on crypto mining operations.
Just when you think that China is done taking down crypto-related activities, China has shut down numerous blockchain-related news accounts found on WeChat. In addition to this, regulators banned hotels found in downtown Beijing from hosting events that promote digital currencies.
There were eight crypto-focused online media outlets that found their public accounts on WeChat blocked. The reason for this action was a violation against the regulations made by China’s top internet watchdog, Cyberspace Administration of China. According to Tencent, accounts were shut down because they are “suspected of publishing information related to ICOs and speculations on cryptocurrency trading”.
The announcement by the local authorities regarding the ban on hosting crypto events was short notice. In fact, there were at least two organizations that canceled their events. Though this decision by Chinese authorities looks benign for observers including Malcolm Lerider who works as senior R&D manager for NEO, there are those that there is so much more to this move.
A Serious Move?
If you ask Dovey Wan who is the managing director at venture capital firm Danhua Capital (DHVC), he said that “Chaoyang is a very symbolic district, what’s considered as the ‘center of the core power’. Also the propagation of narratives in regulatory environment does not need an official national wide documents in China, this already sets the tone”.
Wan also mentioned that it is a common practice among regulators to revisit past policies. These policies are often times revisited after its one-year anniversary in order to know if it still needs further actions. The anniversary of China’s attempt to ban crypto-related activities is on September 4. This could mean that the crypto market in China could expect further government actions in the coming weeks.
What exactly is the future of crypto trading in China? Now that China flexes its muscle once again reiterating its stand on cryptocurrencies, you can’t help but wonder what could actually be the effect that it could make to the crypto market? Today, Bitcoin is only trading at around $6,500. In 2017, before China decided to ban crypto-related activities, Bitcoin was actually on its way towards near $20,000.