- China has scared some members of the cryptocurrency community by reinforcing its ban on crypto usage
- China has effectively banned cryptocurrencies since 2013
- Bitcoin dropped $5,000 on the news but has already recovered half its losses
The cryptocurrency markets were spooked yesterday when China declared all crypto transactions illegal…again. Bitcoin dropped from $45,000 to $40,000 following the publication of a note from the Chinese government reinforcing the illegality of cryptocurrency transactions, a stance it has effectively held since 2013. While mainstream media outlets reacted with typical exuberance at the news as if it was fresh and not eight years old, those within the space reacted with a shrug and saw an opportunity to buy the dip.
China FUD Strikes Again…Part V
Bitcoin had been resting nicely at about $45,000 when news broke that China was banning cryptocurrency transactions. For those that have spent any time in the space, China bans have become something of an occupational hazard, typically occurring in a bull run. The joke now is that these announcements rarely contain anything actually new and are often just rewordings of existing bans, yet this China FUD was enough to make some sell their bitcoin in fear.
Crypto Transactions are “Illegal Financial Activities”
As expected, the notice did not reveal anything new and was indeed just a rehash of what was already known. The notice stated that “Recently, virtual currency trading hype activities have risen, disrupting economic and financial order, breeding illegal and criminal activities such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering.” To reduce the risks of these activities increasing, the note states that, “Virtual currency-related business activities are illegal financial activities.” Only someone labouring under the belief that cryptocurrency was perfectly fine in China would have been surprised by this news – everyone else knew it already.
Are people loading the China FUD again? Yawn.
— Emin Gün Sirer🔺 (@el33th4xor) September 24, 2021
CHINA FUD IS GETTING OLD! pic.twitter.com/16VWboi15T
— MMCrypto (@MMCrypto) September 24, 2021
A Battle That Started in 2013
China’s first tangle with Bitcoin was at the height of the Bitcoin bull run in 2013 when it forbade banks to deal with money coming from cryptocurrency exchanges. Ever since then on an almost annual basis China has criticized cryptocurrencies and banned them afresh in some way, most notably with the mining ban in May, but now they have so little room for further bans that they have taken, it seems, to reiterating existing ones.
Bitcoin has already recovered half its losses, with Fortune noting that “China’s Bitcoin ban could be a buying opportunity”. Bless them – they’ve finally realized.