In the first part of May 2021, the Chinese authorities called to order all companies mining Bitcoin in China. From now on, the Chinese authorities are said to be adamant about enforcing a ban on Bitcoin in China.
This reinforced the panic that had just set in on the Bitcoin market following Elon Musk's tweets.
The price of Bitcoin crashed and quickly fell below $30K. A significant rebound took place to $42K before a major rejection of this resistance pushed Bitcoin sideways since then. Meanwhile, China has continued in its drive to ban Bitcoin from its territory.
China bans Bitcoin to make room for its digital yuan
For Beijing, it is essential to make room for the digital yuan, which is the last missing piece to its mass surveillance system of social credit. Bitcoin must therefore be driven out of the country as soon as possible.
Many opponents of Bitcoin have jumped at the chance to announce the death of Bitcoin once again.
In fact, the banning of Bitcoin in China has had a significant effect on the network's hash rate. It has dropped sharply in a few days since the beginning of June 2021:
Bitcoin's Hash Rate is back to a low not seen since November 2020.
Nevertheless, despite the suddenness of this measure, the Bitcoin network has once again held up. Contrary to what Bitcoin's opponents seemed to think, Bitcoin does not need China to survive. The Bitcoin network is strong enough to withstand a shutdown of nearly 60% of the network's current infrastructure.
We can see that the Bitcoin network withstands this situation without any downtime or bailouts. The Bitcoin network is supported by its users and it will rise even stronger from this ordeal. As always if I may say so.
Bitcoin withstands an unexpected event that many expected to be destructive
What is most impressive about Bitcoin is its resilience. With every test, Bitcoin rises stronger.
All of the mining equipment that was pulled out of China is already being moved to other parts of the world. We are going to see the great exodus of Bitcoin mining from China to the West in the coming weeks. This is going to be an incredible opportunity for all the mining companies in America, Central Asia, or Europe.
They will be able to scale up by differentiating themselves with greener mining.
De facto, all the criticisms about the environmental problems of the Bitcoin network will be annihilated in the months and years to come. From that point of view, what is happening with China right now is a great thing for the future of Bitcoin. It's extremely Bullish for me.
The price of Bitcoin will start to rise again in the coming months. Patience is the key
Of course, this is not currently reflected in the price of Bitcoin.
It continues to be in the $30K to $40K range, and it could stay that way through the summer. Rather than panic, you should see this as a necessary consolidation phase for what lies ahead for Bitcoin in the coming months. And that will be impressive.
The other important point is that the mining facilities that are being moved will go to democratic countries that respect freedom. Countries whose values are more in line with Bitcoin's than China's, no offense to the Chinese people.
Final Thoughts
The big lesson from the current situation is that Bitcoin is proving once again that it is unbreakable.
For many, there was no need for this episode to demonstrate this. I am talking about Bitcoiners who have a long-term view of Bitcoin. For others, this will serve as a reminder.
Either way, stay strong and never forget that Bitcoin is a marathon, not a sprint. The four "Keep" of Bitcoin will help you make the most of it: Keep Learning, Keep Buying, Keep Stacking, and Keep HODLing.
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