Following the Chinese crackdown on cryptocurrency trading and mining, the Cryptoverse took a slight blow below the belt. The announcement alone was enough to trigger a small correction in the crypto market. However, Bitcoin rallied back to $44,000 early on Monday, and most of the crypto market has followed suit.
There doesn’t appear to be any room for doubt now that China wants to totally eradicate crypto from the country. Pronouncements have been made many times in the past, and this time hasn’t been different.
The Chinese government, through its central bank, wants absolute and complete control over its population. The last nail in the coffin would be the central bank digital yuan being rolled out throughout China, with its citizens forced to accept it, and prohibited from transacting in cryptocurrencies.
This is the plan, and it may well succeed, at least for a time. It might however be hoped that ingenuity will still allow Chinese citizens to transact and hold cryptocurrencies despite all their government can do.
In the west, we are watching this struggle play out, and it must be mentioned that certain of us, namely the Federal Reserve, the Bank for International Settlement, and other central banks, are viewing the proceedings with an eye on following in China’s footsteps. A dangerous, dangerous game is in play.
Looking on the bright side, Bitcoin and cryptocurrencies have recovered the losses they suffered since Friday’s dip. Bitcoin clawed back most of the ground lost this morning, reaching a level of $44,350, although it has since settled back at around the $43,800 price level at time of writing.
Bitcoin dominance is generally neutral currently, but many cryptocurrencies are up against the dollar, although most of them not more than by low single digit gains. It remains to be seen how the day will pan out, and whether Bitcoin can retake local highs, firstly at $45,200.
Regardless of whatever happens, whether it’s bans in China, or a regulatory noose in the west, Bitcoin is still the asymmetrical bet that can take you out of the government enforced financial system, and allow investors to protect their wealth, untouchable by anyone.
