Undermining: Will the News from China Bring Down the Cryptocurrency Market?
Just three months ago, the Bitcoin exchange rate almost reached a staggering $65,000 per coin. However, the forecasts of optimistic analysts appear to have been cut down by the news from China. How could the actions of the country's authorities affect the entire industry? We asked our experts about that.
The current state of affairs was preceded by certain events related to the legislative decisions of the Chinese authorities. Let us recall them.
The current state of affairs was preceded by certain events related to the legislative decisions of the Chinese authorities. Let us recall them.
The chain of events began with the May 18 decision of China's financial regulators. Essentially, government institutions banned Chinese companies from any operations with cryptocurrency, including the storage and issuance of related products.
By the end of May, the activity of mining farms began to decline. Three cryptocurrency companies announced the suspension of mining: BTC.TOP, HashCow, and Huobi.
In June, four Chinese provinces imposed a total ban on mining. Companies that were officially engaged in cryptocurrency mining were disconnected from the power grid. Small farms could not remain in the shadows; an investigation was initiated to find them and forcibly shut them down.
By the end of May, the activity of mining farms began to decline. Three cryptocurrency companies announced the suspension of mining: BTC.TOP, HashCow, and Huobi.
In June, four Chinese provinces imposed a total ban on mining. Companies that were officially engaged in cryptocurrency mining were disconnected from the power grid. Small farms could not remain in the shadows; an investigation was initiated to find them and forcibly shut them down.
In late June, the People's Bank of China (PBOC) directed financial institutions not to engage in transactions with cryptocurrencies.
On July 14, the State Grid Corporation of China notified all regions of a full ban on cryptocurrency mining.
Of course, such news dramatically impacted the rate of stabelcoins. The Bitcoin exchange rate had recently dropped below $29,000, though it has rebounded later to the $31,000 mark. We asked Soft-FX Dev business development department how all this can affect the future of cryptocurrencies.
On July 14, the State Grid Corporation of China notified all regions of a full ban on cryptocurrency mining.
Of course, such news dramatically impacted the rate of stabelcoins. The Bitcoin exchange rate had recently dropped below $29,000, though it has rebounded later to the $31,000 mark. We asked Soft-FX Dev business development department how all this can affect the future of cryptocurrencies.
Soft-FX OP-ED
“The reasons for the actions of the Chinese government are clear, namely the distrust of cryptocurrencies and the policy of strict control over the economy. In the eyes of the regulators of this country, the latter domain must have grown uncontrollable because of the explosive growth of Bitcoin and other coins. Certainly, a drop in the exchange rate will be a negative event for many. On the other hand, any asset reacts in one way or another to news and government actions, so we don't observe anything catastrophic in this situation. We hope that developers and evangelists can learn a lesson from the situation and focus their energies on developing methods that can make cryptocurrencies safer in the eyes of governments and environmentalists alike. The PoS protocol, for instance, may get a new impetus for development.”