If you are new to Bitcoin, reading books on crypto is one of the fastest ways to increase your knowledge and level of comfort on this subject. Here, I will like to recommend “The Promise of Bitcoin: The Future of Money and How It Can Work for You” that was newly released in 2021 by Bobby C. Lee.
China's relationship with Bitcoin
Bobby Lee may need no introduction for some of you. He has considerate knowledge on Bitcoin as he was formerly the CEO of BTC China, China’s first bitcoin exchange. Currently, he is the CEO of Ballet, a crypto currency wallet app. His credentials could interest some of you out there, given that China banned financial institutions and payment service providers from offering cryptocurrency transactions in May 2021. Indeed, China's on-again, off-again relationship with Bitcoin was the impetus to me picking up his book.
China's impact on Bitcoin will decrease in future
The book details his intriguing journey in the world of crypto. But what interested me most is his last chapter, in which he lists down 15 predictions about how the world of crypto will evolve. Specifically, he mentioned that China's domination of Bitcoin won't last forever. As Bitcoin grows in acceptance among other nations, China's impact on Bitcoin will pale in significance.
China's crackdown on crypto is same old, same old
China's crackdown on crypto activities is nothing new. In fact, Bobby explained how the Chinese government banned Initial Coin Offerings (ICOs) and crypto exchanges way back in 2017. Yet, the Bitcoin market did not collapse. Hence, his succinct account of China's relationship with Bitcoin should come across as reassuring for some of us who are apprehensive about China's impact on the volatile crypto market.
Digital Yuan vs Bitcoin
I think most of us will agree with Bobby's prediction - that China won't be able to exert significant influence over the Bitcoin market, given the decentralized nature of Bitcoin. Still, I wish Bobby could have examined China's current stance on Bitcoin a bit further. For instance, a discussion of how the People's Bank of China is focusing its energies on developing the digital yuan, a homegrown virtual currency would have been useful in helping us understand how China wishes to proceed in its relationship with Bitcoin. Real-world trials have begun in a few prominent Chinese cities, including Chengdu, Shenzhen and Suzhou.
Is the recent crackdown on crypto something we retail investors should expect as the new normal as China pivots towards digital yuan? How are Chinese retail investors reacting towards the introduction of digital yuan? Do they see the digital yuan as a substitute good for Bitcoin or as something that serves a distinct purpose from Bitcoin?
Early Adoption of Bitcoin by Other Countries
Similarly, it is easy for us to accept that Bitcoin will become increasingly prevalent in other parts of the world, particularly developing economies. After all, El Salvador made history by being the first country in the world to make Bitcoin legal tender. Likewise, inflation-devastated countries like Venezuela and Zimbabwe have proven themselves to be early adopters of Bitcoin as higher proportions of their populations use Bitcoin than people from most countries.
On the other hand, from the perspective of developed economies, Canada has struck while the iron is hot by launching a Bitcoin ETF in February 2021 on the Toronto Stock Exchange. Australia is hot on Canada's heels as a cryptocurrency investment house called Monochrome is the midst of planning to launch Australia's first Bitcoin ETF.
So What Are the Causes?
However, the million-dollar question that is still ringing in my mind is: do these proactive moves by developed and developing countries alike help to chip away at China's dominance on Bitcoin? Or is China's recent emphasis on the digital yuan a more significant reason than the actions undertaken by other countries? Your guess is as good as mine, so that's why I hope that Bobby Lee could have offered a more in-depth analysis on his prediction.
Nevertheless, "The Promise of Bitcoin" was a thought-provoking read, and I hope to hear inputs from minds more enlightened than mine!