Bitcoin has been gaining popularity during the last couple of years. The possibilities of using bitcoin as a payment method of choice are continuously expanding, from bitcoin gambling to buying real-estate. During these years, China has been a major factor when determining bitcoin price.
This was mostly due to the fact that China was responsible for a big percentage of the world’s trading and mining activity. Yet, the recent crackdown of the Chinese government against Bitcoin by banning trading and closing down all domestic exchanges has led to a considerably lower influence of the country in the digital currency ecosystem. With no more trading allowed, regardless of the other moves that the Chinese government makes against digital currency, it is not likely for China to impact the price anymore.
Recent reports indicate that now, the Asian giant is only responsible for around 1% of the world’s trading volumes, with most of it moving from China to other countries which are more permissive and offer well-established, efficient and regulated markets, such as South Korea, Japan and more.
Because of the government’s crackdown on digital currencies inside the country, the Chinese Bitcoin market, which was once the biggest in the world, is now virtually non-existent. While citizens in the country still hold bitcoin, their influence on the market is considerably lower. The only way China could regain some of its influence on the digital currency market would be if the government decided to cancel their bans and adopt clear, regulation that would create an efficient market. In case this happens, it will likely lead to an even higher trading volume, and of course, an even higher value for bitcoin, Ethereum and other cryptocurrencies.
As the secondary markets which are now in the first place continue to gather more strength, it is understandable why the bitcoin price is actively increasing. After all, a good part of the drama is gone now.
Based on everything that has been outlined so far, what do you personally think about China’s abrupt exit from the digital currency ecosystem? Let us know your thoughts in the comment section below.