Bitcoin News; News from China negatively affects cryptocurrencies. Some experts believe that the news of China’s Bitcoin ban could be positive for the future.
Bitcoin started the new week with a negative chart. After hitting the $41,000 level last week, the leading cryptocurrency dropped to $28,800 yesterday. It is known that the biggest factor in the recent decrease in Bitcoin price is China’s mining and trade bans.
However, experts say that the relocation of the headquarters of the leading cryptocurrency from China to the West is quite positive for the future.
Bitcoin ban expands in China
The Chinese State Council’s announcement on May 21 that it will take strict measures for cryptocurrency mining shocked the markets, and all cryptocurrencies suffered a great loss in value with the sharp decline. Following this development, China’s Inner Mongolia, Xinjiang and Qinghai provinces imposed bans on Bitcoin mining.
With the bans that started in Sichuan province recently, many businesses had to close. In the official statement made by Deputy Prime Minister Liu He, the reason for the pressure on Bitcoin mining was “to prevent the transfer of individual risks to the social sphere”. In addition, reducing the carbon footprint and efficient use of energy were among the reasons for the bans.
Bitcoin bans contradict themselves
Nick Carter, co-founder of Coin Metrics, commented on the news from China in his article published on CoinDesk yesterday. In the article titled “Go West, Bitcoin”, it was stated that the news from China showed the biggest change in the geographical structure of Bitcoin mining since the beginning of the industrial mining era.
Reminding that China hosted 65% of the Bitcoin hash rate in April 2020, Carter said that this rate will be very low 12 months from now. He also stated that the logic of reducing carbon footprint and using energy efficiently, which China put forward in Bitcoin bans, contradicts the country’s continued use of coal energy. According to Carter, the bans in the Sichuan region, where clean energy is located, also reveal this contradiction.
Carter recalled the views that Bitcoin was restricted because it rivaled China’s digital yuan project. He also stated that the prevention of uncontrolled capital outflows may be one of the reasons for these bans. Stating that the energy distribution disorder in China may be one of the overlooked reasons for these bans, Carter stated that whatever these bans are, it will be a great advantage for Bitcoin to be decentralized.
China’s Bitcoin ban is great news
Brandon Arvanaghi, a former engineer at Gemini crypto exchange, expressed similar views to Nick Carter in an interview with Bloomberg. While Arvanaghi stated that the ban news from China was great, he compared the country’s anti-Bitcoin sentiment to Facebook and Google bans. Stating that it is positive that the entire Bitcoin mining industry can be closed with a single phone, Arvanaghi added that BTC is the best store of value in the history of the world:
This is great news. I see this as libertarian technology’s escape from Chinese prohibitions. This means that Bitcoin is not wrong, this shows that it is working correctly. Countries are now choosing a side. I find the exit of Bitcoin from China to the USA positive in the medium and long term.