Bitcoin - An end to a Chinese dominated era?steemCreated with Sketch.

in china •  2 years ago  (edited)

As Chinese authorities announced today that all local exchanges need to discontinue their operations, it dealt an enormous blow to the cryptocurrency market. The price dipped slightly below $3000, which was (and still is) considered major support level for Bitcoin. In the process, the decline in Bitcoin of over 20% compared to 24 hours before caused an even greater selloff in altcoins. At the low-point, declines of 30% were the rule rather than the exception. Bitcoin recovered though and with it came the recovery of the altcoins, out of which many are currently well in positive territory compared to 24 hours ago.

But the biggest blow today, China may well have delivered to itself. Though the reasons for the ban on exchanges are understood (to curb unregulated and uncontrolled capital outflow of the Yuan), it now has most likely lost its firm grip on the leading position in the cryptocurrency world as Japan and South Korea are there to pick up the pieces after the current storm, not to mention countries like Russia who are eyeballing the cryptocurrency industry with great interest.

Japan was already becoming a large competitor in the mining industry, with 2 large companies (GMO and DMM) entering the mining space with huge operations and the mining industry may now even gain more traction. In addition, Japan is the country that is most ahead with integration of Bitcoin in its economy as it is estimated approximately 300,000 stores in Japan may accept Bitcoin as a currency in 2017.

South Korea is also well known as a country with massive popularity for cryptocurrencies. With strict laws on betting, and limited investment opportunities with high yield, cryptocurrencies have become massively popular with Korean investors. This combined with the threat of war with North Korea has caused South Korea to embrace the crypto world much more than many others, which is why it can compete and maybe overtake China in terms of infrastructure and regulation in favor of the cryptocurrencies.

Russia is also stepping up its efforts to become a major hub in the crypto sphere. It intends to allow trading of cryptocurrencies on stock exchanges, although one needs to be a qualified investor to avoid money laundering operations. This would go hand in hand with the legalization of cryptocurrencies which was announced by the Finance minister of Russia.
Furthermore, Russia is considering subsidizing energy costs for mining operations for which a pilot is underway. Russia is creating a very favorable atmosphere for cryptocurrencies as recognized by the Institute for Internet Development (IRI):

"In addition to the legalization of cryptocurrency in Russia, it is necessary to create the most favorable conditions for the work of miners."

These are the most prolific countries currently hitting the news on a daily basis and nor they or other countries are sitting still on the crypto development front, while China's development has now come to an abrupt halt with the latest ban on ICOs and closure of local crypto exchanges. How long of a standstill remains to be seen though. The Chinese mining industry is of course the biggest out there and there is a whole industry around it already as well. And reports suggest these measures are only temporary. But the latest events certainly have not helped the Chinese crypto industry and these might just result in that extra push the competing countries needed to dethrone China as the world's leader in crypto currencies.

Interesting times ahead. Stay tuned!



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Hi Attalis, this is a very interesting topic you bring up. Thank you for sharing. I wonder how soon and which cryptocurrencies will be integrated into countries' economies. And what various governments would try to do to regulate them..Did you read that Russian Government (Ministry of Finance) proposed to prohibit bitcoin trading for regular citizens (private sector)?

Thanks @yanacroft, yes indeed, i read about that. I wonder if that is indeed going to happen. It is another form of trying to control the cryptocurrency space which in my view will ultimately fail. Just like the capital outflow cannot be stopped eventually in China. Cheers for upvoting and commenting!

China, country of technology advance and innovation, banning BitCoin... I don't know, I think they are planning something as JPMorgan with those words. Let's see how China acts in the future. Nice information!

Thanks for stopping by and taking time to comment and upvote. Yeah i wrote about Jamie Dimon in my previous article. More of an opinion piece though. Check it out if interested. Cheers!

Good job on the post! Pretty straightforward.

Thank you. Appreciate the upvote

Very interesting take on the mining aspect!
The impact of China on the crypto market (in trading volume) is not as big as many people may think. It could easily be evened out by increasing participation in other countries for example India, or just the increasing participation that will happen in North America or Europe as Cryptocurrencies become more and more mainstream.

But I think we will see another downtrend in the next couple of days or weeks before the market will recover to the prices we saw 2/3 weeks ago.
Watch my Video for my take on the China exchange ban and the market forecast:


thanks for sharing the video mate, well done. though it wouldn't call it a 'Small bounce back'. It was rather huge in my book. in any case, markets may decline further, though who knows anymore. if the weekend finishes up, we might just continue!

Thanks for your feedback! Yeah you're probably right, that it wasn't a small bounce back, but it it did not bounce back completely to match the 7 day loses, so I wouldn't call it huge either.
I think we will see some more decline in this month but I'm optimistic that we will fully recover in October.

Well written, @attalis. It should come as no surprise to anyone that China is slamming the door on cryptocurrencies. If they cant control something, they kill it. Ahhh, the joys of communism.

After a period of adjustment, we ought to see prices come roaring back as more supportive hosts pick up Beijing's slack. Whether its South Korea and Japan, Russia or some other more hospitable venue, cryptocurrency will find a home. The First Law of Markets prevails everywhere: where there's a demand, someone will always facilitate the supply.

Thank you @braveboat. Great comment and I agree 100%, someone will supply. And i am sure there will be plenty of demand in the coming years. Thanks for stopping by and upvoting. Steem needs more users like yourself!

perhaps they dont believe they have enough gold to stabilize the outflows yet. of course all country fiat currencies suck .

@attalis got you a $16.27 @minnowbooster upgoat, nice!
@attalis got you a $16.27 @minnowbooster upgoat, nice! (Image:

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They just pushed off closing the exchanges for another month. Also, according to a tweet from Coindesk it doesn't affect crypto to crypto trading, just being able to get fiat in and out. I'd bet things will change by October.

Yep, but it is the fiat to crypto that makes the value of the crypto market go up or down. Net investments will stay the same, so still a huge loss to cryptos. I hope it will change in October too but i wouldn't hold my breath.