China has a somewhat frosty stance towards Bitcoin and all other cryptocurrencies, with the government calling for a ban on all crypto products. However, in a strange twist of events, a Chinese state-run media corporation labelled Bitcoin a safe haven asset – meaning that Chinese investors should consider buying Bitcoin.
Great News for Bitcoin
Ever since all commercial Bitcoin activity was banned in China back in August 2018, Bitcoin has struggled to get going. Markets have missed out on the Chinese trade volume, as the great firewall of China has clamped down on all crypto related websites. Baidu – the Google of China – joined in the war against Bitcoin in China and changed its algorithms to make crypto related sites rank significantly lower. Now the Xinhua News Agency has issued this statement, it seems as if we could see Chinese investors start piling into crypto once again.
Sliding Around the Trade War
While the comments from Xinhua News Agency seem slightly strange given China’s stance on crypto recently, it could very well be a ploy to freak Donald Trump out. Trump and the US have embarked on a trade war with China, hiking up tariffs on Chinese products imported into the country. If China starts moving towards Bitcoin, certain taxes on fiat purchases might be avoidable. This could help China survive the trade war and continue to prosper in American markets.
China Still Wants to Ban Mining
Back in April, China hinted that it wants to ban all crypto mining and make it illegal in the country. Crypto mining in the country has a bad reputation, with people turning to a life of crime in order to make it as a miner in the country. One teacher was caught mining Ethereum from his workplace without permission and another miner was jailed after he stole energy from the rail network to power his mining rigs. It’s this type of behavior that has led the Chinese authorities to take a strong stance against crypto mining.
If China does in fact allow Bitcoin trading to become legal again in the country, we could see new exchanges popping up, as well as other exchanges opening a Chinese arm. The massive influx of capital from the country would help push Bitcoin to brand new all-time highs and help Bitcoin break through the $14,000 resistance level that it appears to be caught on. It could be some time before we see China completely roll back its crypto ban, but when it happens Bitcoin will head to the moon.