China is a great threat to cryptocurrencies. Or maybe it was. Since the Chinese government banned Bitcoin mining, the crypto market had wiped out $1 trillion of valuation from the peak in April.
Why China has a great impact on Bitcoin?
There was 65% to 7% of the world’s Bitcoin mining happened in Chia. Since the banning order, it had reduced to 45%. The sharp dropped in hash rates make Bitcoin transaction slowly and costly. It directly affects the Bitcoin network functionality.
After two months of the exodus of miners from China, Bitcoin was resumed back to its operating capacity and the transaction is normal.
Why crypto market got affected?
Bitcoin was dominated by 42% out of the total 100% of the crypto market. The sizable market cap that may impact the entire market and its price action may trigger a tsunami in the market if it sharply falls.
Chinese government doubts cryptocurrencies
Not only the bank officials in China claimed cryptocurrencies are of no value whatsoever, but they also plan to launch gold-backed cryptocurrencies to replace them. A non-sense movement that believes gold is valuable.
Dip again due to another China Syndrome
Bitcoin along with other cryptocurrencies dipped again with China syndrome. This time is property giant Evergrande collapse.
China again?! Or something else?
It seems Bitcoin price action was tracing Chiese debt cycles when debt hits the peak, whales sold Bitcoin. Of course, it only happened recently.
China was a hedge of United States
China did very well in the last decades and it became economically engine to push the global economy due to intentional trades.
Gold was a hedge of the global economy
Gold works as a speculated asset to prevent risks in case the global economy collapes. People believe if there was no fiat currency, they might carry gold to trade with goods.
Bitcoin beats China and Gold in recently
Bitcoin replaced China and Gold becomes a speculative asset to prevent uncertainty of the future. More investors dumped Chinese stocks and Gold and pump into cryptocurrencies.
Can crypto get over China?
Eventually crypto will but it may take a while. Or if the Chinese economy becomes dominated, then cryptocurrencies may diminish its domination more.
In conclusion
I do not think crypto will get over China and it may take a while to diminish the impact.
Photo by Jay on Unsplash
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Disclosure: The article was written by a delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters. You should not believe any words this author wrote or you may experience similar symptoms or even possibly become a nut job.
