Another China “Ban”
Today’s news is yet another China ban on bitcoin and cryptocurrency. According to a Q&A statement on the People’s Bank of China’s website, China said services offering trading, order matching, token issuance, and derivatives for virtual currencies are strictly prohibited. They also highlighted that overseas exchanges providing services in mainland China are illegal, and that workers at foreign crypto exchanges will be investigated.
It’s no surprise to everyone in the space that China is announcing their restrictions on “crypto” yet again. It’s clear at this point that Chinese leadership doesn’t want bitcoin to exist in their country. They have a much stronger focus on pushing through the development and adoption of their digital yuan CBDC. The bitcoin bans are just one of many Western technologies that China has put restrictions around including Google, Facebook, Amazon, and Microsoft, to only name a few.
What’s good for bitcoin is that the China ban announcements are having less of an effect over time on bitcoin’s short-term price. There’s typically always some one-day, seven-day or 30-day negative effect, but it becomes completely irrelevant after a few months.
For it’s long-term trend, it really doesn’t seem to matter much at all when we zoom out through history. The only time where we see some possible negative effect and coincidence is from their crackdown at the end of 2013, when bitcoin was already entering a bear market.
This speaks to the state of bitcoin’s decentralization progress over the last decade and pending demand for the asset around the rest of the world.
Nation-State Game Theory
Immediately after the China ban news broke, U.S. Senator for Pennsylvania, Pat Toomey, went right to Twitter:
He follows up with, “Beijing is so hostile to economic freedom they cannot even tolerate their people participating in what is arguably the most exciting innovation in finance in decades. Economic liberty leads to faster growth, and ultimately, a higher standard of living for all.”
U.S. Senator for Wyoming, Cynthia Lummis chimed in with her support as well. As China further distances itself away from bitcoin, it’s becoming increasingly clear that there’s a political delegation in the United States working to embrace the innovation, freedoms and opportunity that bitcoin provides.
With China looking to get out of the bitcoin game, they have provided the United States a tremendous opportunity and advantage to get ahead in the game by embracing the economic gains and innovative potential that bitcoin offers. As bitcoin progresses, China will be left behind. The next moves can be summarized in a simple matrix: