In China financial institutions are not allowed facilitate bitcoin transactions. Regulation prohibits financial firms holding or trading cryptocurrencies. People’s Bank of China (PBOC) made its first step in regulating bitcoin by prohibiting financial institutions from handling bitcoin transactions. Cryptocurrency exchanges or trading platforms were effectively banned by regulation. Bitcoin mining has been cracked down. Many bitcoin mines in China had stopped operating. Furthermore, China is in plans to release their own digital currency in 2020 via PBOC and this could be a game changer. If this goes on it can challenge Alipay and WeChat Pay.
What if China stopped cracking down Bitcoin mining sites?
The number of Bitoin mining sites will increase. Furthermore, electricity prices in China is very cheap. This will lead to an increased supply of Bitcoin. When you have too much Bitcoin and too little people who wanna buy it, the price will decrease. If you have too much Bitcoin and more people wanna buy it, the price might be constant or increase.
What if China cracked down more Bitcoin mining sites?
The number of Bitcoin mining sites will decrease. This will lead to a decreased supply of Bitcoin. When you have little Bitcoin and more people who wanna buy it (higher demand), Bitcoin prices are gonna shoot up.
What if PBOC allowed chinese financial institutions to handle Bitcoin?
More Chinese citizens will start using Bitcoin. This will lead to an increase in the number of people who use Bitcoin. Demand for Bitcoin will increase and the price will shoot up. After all China is home to a population of more than 1 billion people. Moreover, the number of Bitcoin mining sites will increase rapidly to cater to the demand.
What if someone renowned in China commented on Bitcoin?
If the comment was positive, Bitcoin price will shoot up. If the comment was negative, Bitcoin prices will drop for sure. This is not only for renowned people from China, it also includes the whole world. Recently when president Donald Trump gave a negative comment on Bitcoin, Bitcoin price dropped. Anyone famous can control the price of Bitcoin with their words.
Bitcoin does not have a high penetration rate in many Asian countries
Many Asian countries depend on China for their economic benefits so Asian countries who depend on China for investments, trade and etc tend to follow the foot steps of China. For example, China’s e wallet market is one of the world’s biggest and most succesful. This has inspired quite a number of Asian countries to create their own e wallets and many are succesful. Many Asian nations now accept Alipay and WeChat Pay to cater to Chinese tourists. Imagine if China uses Bitcoin for daily purchases instead of e wallets, I am sure that many Asian countries would accept Bitcoin to cater to Chinese travellers. Conclusively, the use of Bitcoin can impact many Asian countries. Airports around Asia are accepting Alipay and WeChat Pay, what if China used Bitcoin instead of Bitcoin? Well we will be seing Bitcoin logo more frequently at Asian airports.
What if PBOC releases its digital currency as schedueled?
Chinese citizens show their patriotism by supporting the use of Chinese products. The usage of Bitcoin in China could decline, decreasing the demand of Bitcoin and probably decrease the price of bitcoin as well. China is a strong nation because it has a population of more than 1 billion people. The Chinese digital currency has a potential 1 billion customers and this huge user base could threat Bitcoin’s position in the market. Furthermore, Asian countries that depend on China for economy might start accepting this digital currency to cater to Chinese travellers and create their own digital currencies for their use. There will be a boom of Government controlled digital currencies in Asia, decreasing the popularity of Bitcoin and the Bitcoin price might decrease because of that.
In conclusion China can create major impacts on Bitcoin prices. Bitcoin investors out there, you guys might wanna be careful with investing your fortune in Bitcoin. Investing in Bitcoin can be fruitful or vice versa if it is a rainy day.