China’s Bitcoin Crackdown: Is It All Over?Trevor Gerszt
Not content to shut down domestic cryptocurrency exchanges and ban initial coin offerings (ICOs), the Chinese government has recently taken steps to block access from China to websites overseas that offer cryptocurrency trading or ICO investments. Many Chinese cryptocurrency companies moved their operations to Hong Kong or to various other countries offshore in the aftermath of the government’s previous moves, for instance setting up operations in the Caribbean. Many Chinese continued to use those services after the previous bans.
Now the Chinese government is taking steps to prevent Chinese users from accessing foreign cryptocurrency exchanges. And while the government claims that it could still engage in further regulatory measures to crack down on cryptocurrency trading, it’s hard to imagine what more could be done. It certainly seems that the Chinese government’s actions have effectively ended all Bitcoin and cryptocurrency trading within the country.
Looking on the bright side, that means that the Chinese government can’t do much more – the worst of the damage has already been done. Since the Chinese crackdown was at least partially to blame for the decline in Bitcoin prices over the past several weeks, that is good news for Bitcoin investors. In fact, since the news of the Chinese government’s complete ban the price of Bitcoin has stabilized and begun to recover.
With no further prospects of Chinese government action, or at least with any further action not having nearly the effect that crackdowns up to now have had, the Chinese cryptocurrency market shouldn’t have anywhere near the impact on cryptocurrency prices that it has had. So now cryptocurrency markets should be able to continue growing based on the fundamentals of their currencies and the long-term potential for growth, rather than succumbing to short-term fears of government crackdowns.
There won’t be a crackdown coming in the United States, and in fact some Chinese exchanges such as Huobi are now opening up US offices. That should mark the US as a safe haven for Bitcoin and cryptocurrency trading and benefit American investors who look to Bitcoin to boost the value of their investment and retirement portfolios.