Bitcoin was quite the attraction back in 2017. Everyone and their ancient grandma wanted a piece of the pie, but as time went by, it was clear that this faux dollar would one day fall by the wayside.
We say this because China, the largest market for cryptocurrencies, is making moves to kick Bitcoin out of the country. Chinese officials want to ban all virtual currencies, making it impossible for businesses and individuals to use them.
A report from Reuters, Beijing, claims there’s an internal document from a government meeting that shows how much China is ready to apply pressure to all virtual currencies which much of the focus being placed on Bitcoin.
Pan Gongsheng is in attack mode
Vice Governor of the People’s Bank of China (PBOC) Pan Gongsheng, says regulators must do whatever it takes to ban businesses and individuals that provides a marketplace that guarantees the trading of Bitcoin.
The financial work conference clearly called for limiting ‘innovations’ that deviate from the need of the real economy and escape regulation,” according to Pan during the meeting.
He went on to suggest that Chinese authorities should block all domestic and foreign websites that offer trading services through Bitcoin. Apps that do the same will also face scrutiny, ultimately making Bitcoin and virtual currencies overall a worthless investment.
Mr. Gongsheng didn’t stop there as he’s also calling on authorities to investigate any institution that allows people to move money overseas.
China’s Bitcoin dominance coming to an end
When the cryptocurrency, Bitcoin, took off in a huge way, China quickly became the leader in mining and trading. Citizens with the resources to set up Bitcoin mining farms were doing on the regular to capitalize on its success.
The main reason why the Chinese government is fighting against Bitcoin is because citizens are using it to move their cash abroad. It’s just another fight against capital outflow, one that citizens aren’t able to win due to the serious stance of the government.
The crackdown on the faux money is already proving successful as Bitcoin and other cryptocurrencies are down for six straight weeks. Bitcoin slumped by 15 percent and is now worth under $12,000 for the first time since December 5, 2017.
The pullback seems to be coming from a lack of buyers in Asia,” Mati Greenspan, a senior market analyst at eToro, told CNBC. “Japan and South Korea usually dominate this market but over the last few days, the volumes have been dropping steadily. This morning the combined volumes from these two countries dropped below 30 percent.”
Bitcoin is dead, it’s just going through a phase that might take some time for the final nail to enter the coffin.