Will China’s suppression of the mining industry have a long-term impact on Bitcoin prices? – Blockchain news, opinions, TV and work

Chinese Vice Premier Liu He told a group of financial officials last Friday that the government will crack down on Bitcoin mining and trading. It is said that the reason behind this decision is China’s goal of achieving financial stability. Although China has been taking measures to restrict the use of cryptocurrencies for many years, this focus on mining is still very new.

An official of the mining company BIT.TOP stated that the Chinese government is trying to prevent large amounts of money from flowing into cryptocurrency mining. But this does not mean that individuals should not still be allowed to mine on their own. He predicts that due to the latest action, half of the country’s mining machines may be suspended, mainly in large mines.

Regulatory risks from continuing mining activities have prevented the Chinese mining company BIT.TOP, which is said to provide mining services mainly in North America from now on.

The consequences of cryptocurrency can be severe.According to statistics, China accounts for more than 65% of global Bitcoin mining statista.com, Although it is difficult to say what the long-term consequences will be.

After China made the decision, the stocks of Bitcoin and crypto-related companies were significantly shaken. Bitcoin prices fell by 13% on Sunday. Although China’s move to stop mining coincides with Elon Musk’s decision to stop accepting Bitcoin to buy Tesla cars, Tesla cars are also underperforming in the cryptocurrency world. Musk’s decision to stop buying Bitcoin is related to the large amount of carbon produced by China’s mining. Bitcoin is currently trading at approximately US$38.000 per coin, which is far below the peak of nearly US$64,000 reached on April 13.

So are we entering another bleak era of encryption? Ulrik K. Lykke, Executive Director of Crypto Hedge Fund Ark 36 I do not think so.

“The cryptocurrency market is currently dealing with a series of news that have provided impetus to the bear market case of price development. Last week, the Bitcoin market alone evaporated more than $250 billion. In absolute terms, this number seems to be astronomical. Numbers. However, in terms of percentages, such market changes are frequent, and we have seen similar changes in the past. In 2017, before the price peaked, the price fell by more than 35%.

When it comes to Elon Musk’s tweets or negative comments from the People’s Bank of China (People’s Bank of China), it’s important to distinguish between their real impact and perceived impact. In fact, this is not the first time Elon Musk has tweeted unstable, and frankly, it is wrong. Similarly, China has repeatedly changed its position on cryptocurrencies. News like this can be very attractive and can easily arouse market sentiment, but in the long run, they are often meaningless. The crypto market is very emotionally driven, and their participants tend to overreact to events they consider negative. “

Lykke also mentioned that in terms of Bitcoin’s prospects, the current situation may seem grim, but he said that historically, this is just another obstacle that Bitcoin has to overcome. Compared with the obstacles faced in the past, This is a small obstacle.

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