What would happen to the Bitcoin market if 23% of the global trade was cut out? How about if one of the largest mining operations for bitcoins ceased all at once shuts down?
These two questions will more than likely be answered within the next week since China has a cryptocurrency ban looming on the horizon.
Impending Ban by China
Last week China placed a ban on all ICO in the country. And now the government is looking straight at Bitcoin and other cryptocurrency exchanges. To be clear, the ban is only on cryptocurrency exchanges, and not over-the-counter transactions. Globally the Bitcoin market slid when news of the Chinese plan to ban crypto-exchanges. China is responsible for 23% of the world’s transactions through bitcoin. And at the same time some of the largest bitcoin miners live there as well.
Thankfully there are some sceptics with regards to the crypto-ban. Investment companies based in Beijing; like FBG Capital, believe that new investors will shy away from Bitcoin, but the older more experienced investors will still look to trade.
China does however have another idea that coincides with the banning of cryptocurrency exchanges. The Peoples Bank of China had started working with a prototype cryptocurrency in 2016. While uncertain of its success, the prototype would serve as the first digital currency to be used by a national bank in the world.
Hoping for the best
Amidst the ban on Initial Coin offerings last week, and a looming threat of exchanges being closed down, three of the largest bitcoin exchanges remain hopefully. Why? OKCOIn, Huobi, and BTC China have all reported a lack of notice from the government. In fact all three reported transactions last Monday following the ICO bans.
But will the global market be affected? At the moment it seems like worldwide the growth of Bitcoin will continue. The past few months Russia has been attempting to contend with China with mining. But the government had been regulating the cryptocurrency more and more in that time span, so much in fact that the 23% of the global market for Bitcoin, was actually 90%.
Bitcoin will grow still. Speculation of the “bubble” is all based around the news; claims of failure due to growth charts being similar to other stocks in the past. Maybe the PBoC will be able to say they had the first nationally backed cryptocurrency. We can only wait and see.