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Bitcoin (BTC) and crypto prices crash hard after news from China, but how serious is it?

Sep 20, 2021

Another wave of panic hits the market as headlines appear stating China has announced a broad ban on crypto once again. This time the country indicated that it would ban all crypto-related transactions in the country. The ban comes after China enforced a blanket ban on crypto mining. There is, however, some doubt about the validity and seriousness of these recent reports.

Bloomberg published an article today with the headline: “China Bans Crypto Transactions, Vows to Stop Illegal Mining.” In addition, several big news platforms, such as Reuters, also published articles stating the same. According to the news, China will now consider every crypto transaction illicit financial activity. This includes services offered by foreign cryptocurrency exchanges as well.

China seems to be at war with crypto and Bitcoin (BTC). While cryptocurrency exchanges have already been illegal for a long time, the country was the world’s epicenter of bitcoin mining. The government ended this by enforcing a blanket ban on mining, meaning all cryptocurrency mining in the country became illegal. As a result, many miners left the country, leading to the most significant correction in the hash rate ever. The hash rate has been recovering since the beginning of this year. Still, regulatory uncertainty worldwide now causes wild price volatility, marking another deep correction of the bitcoin price.

A distraction?

It is unclear how serious this news is, however. As Trustnodes reports, the news simply regards a re-iteration of what China’s central bank had already stated before in 2017. On top of that, this re-iteration was already published ten days ago. The bank published on the 15th of September the following news:

“Virtual currency-related business activities are illegal financial activities. Carrying out legal currency and virtual currency exchange business, exchange business between virtual currencies, buying and selling virtual currencies as a central counterparty, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, virtual currency derivatives transactions, and other virtual currency-related Business activities suspected of illegal sale of tokens and tickets, unauthorized public issuance of securities, illegal operation of futures business, illegal fund-raising and other illegal financial activities are strictly prohibited and resolutely banned in accordance with the law. Those who carry out related illegal financial activities constitute a crime shall be investigated for criminal responsibility in accordance with the law.”

Trustnodes, therefore, claims that the bank’s position hasn’t changed in the past five years. The media outlet even links the recent money printing of over $81 billion in CNY, marking the recent re-iteration as a way to distract and discourage Chinese citizens from escaping to capital safe-havens like bitcoin.

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