China’s Bitophobia
I originally posted this on Publish Ox. I would like to get more input from those with more experience in the cryptomarket. So please let me know what you think.
This year has been an interesting one for cryptocurrency enthusiasts. The most obvious and recent is China’s banning of Bitcoin use and mining. While most people panicked as the price of Bitcoin plummeted, a few of us were glad. I even published a short article titled, “Thank You, China?” As I pointed out in that article, a drop in the price is advantageous for long term investors that recently got into the market. Best of all, it would get the bulk of miners out of China- which I felt was dangerous.
Why do I think it is dangerous to have China as a major player in Bitcoin and other cryptocurrencies? In my opinion, China has a single-minded desire to control everything. For the most part, they really control most of the world. This can be seen with the whole COVID situation and having banned any discussion of non-mainstream ideas regarding it, even in America! Living in Taiwan, I can tell you that Taiwan (the ROC) is not in International Organizations because China says so. The UN and the WHO are in China’s pockets as well. So they have free rain over all the human rights violations they want. In China’s defense, all governments are corrupt to a point. This world has many bullies.
Back on task! If China has a significant portion in the market of anything, they will use that to their advantage. So then, why give it up on Bitcoin?
For this one, I believe that it is their policy China first. Right now, they need to control everything in their society. A lot of this is done with social credit. These are rewards the state gives citizens for good behavior. They also lower the social credit score of trouble makers. This makes it difficult for citizens to travel, commute to work, or even live in a house. Having cryptocurrencies in the country allow other methods to be used for getting services or goods.
It also adds support and control for their own cryptocurrency, making their digital yuan more influential faster. Once it is powerful enough, they will over though the USD as the international currency of oil and everything else.
One thing to remember is that nothing lasts forever. This is just the newest situation in Bitcoin/China drama, and it’s not the first, and it’s not the last. A good investor relies on nothing but his own research. China could allow Bitcoin and other cryptocurrencies back into the market in the future.