Is China expecting a bitcoin boom like in 2016?
Over the past couple of days, Bitcoin has shown an impressive growth of about 10%, which for many was rather unexpected. Comparing the current situation on BTC with 2016, analysts and experts believe that the instability of the Chinese yuan against the dollar may soon change the country’s position in relation to cryptocurrency.
Many compare the parabolic movement of Bitcoin in 2019 with the movement of 2016 and 2017, at the end of which the cryptocurrency reached its record high price of about $ 20,000. Now that Bitcoin has grown by more than 270% since the beginning of 2019, it seems more or less reasonable .
However, many industry experts and analysts, including Alex Saunders, CEO and founder of Blockchain Education, believe that since 2012, one of the key factors of difference is China’s position.
“Most cryptocurrencies did not exist in 2016, moreover, then in China there really was a bitcoin-fever. If their currency continues to weaken, then it can be argued that they will again use BTC. Today breakdown was very significant “
It is noteworthy that even before China announced a general ban on all cryptocurrency on the stock exchanges, the country had a serious impact on this market. The activity of Chinese investors accounted for a serious share of the overall market, so their actions directly influenced its development. The world’s two largest producers of mining cryptocurrency miners — Bitmain and Canaan — are Chinese companies, they occupied a high percentage of the network’s hashrate.
However, the People’s Bank of China (PBoC) subsequently banned the use of tokenized securities, and the Chinese government later imposed a ban on all commercial activities related to cryptocurrencies.
It is worth noting that at that time the Chinese yuan looked stronger against the US dollar, which is reflected in the chart below.
In 2019, the position of China in relation to Bitcoins and cryptocurrencies in terms of legislation continues to be negative, although some positive changes have occurred recently.
Last year, President Xi Jinping called the blockchain technology part of the “new industrial revolution”, which raised hopes for the ban being lifted.
In addition, tension is growing between China and the United States, especially after US President Donald Trump announced the introduction of duties on Chinese goods destined for import to the United States in the amount of $ 300 billion.
Against this background, the Chinese yuan is becoming more unstable against the US dollar, reaching 11-year lows. According to the popular Bitcoin bull and the former hedge fund manager of Wall Street, Mike Novograc, the above may cause another Bitcoin rally.
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