China has banned financial institutions and payment companies from providing services related to cryptocurrency transactions. The government has even gone so far as to warn investors against speculative cryptocurrency trading.
This is another attempt by China to shut down the digital trading market and under the ban, institutions must not offer any services involving cryptocurrencies, and this includes registration, trading, clearing and settlement.
The consequences of the “ ban ”
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At first glance, Bitcoin BTC / USD investors in China, as well as owners of other cryptocurrencies, have legitimate reasons for concern. After all, the latest Bitcoin developments in China come from high-level regulators including the China National Internet Finance Association, the China Banking Association, and the China Payments and Clearing Association.
The important thing to keep in mind here is that China hasn’t actually banned people from having cryptocurrencies. How do we know this? Chinese media tell us this is the case. Take the example of the South China Morning Post. According to the SCMP, concerns that regulatory changes in China will impact the broader cryptocurrency market are “unfounded”. The outlet, widely regarded as an official spokesperson for the Chinese government, further notes:
“Cryptocurrencies could still be bought in China on Thursday and investment programs that promise hefty returns to mine them have remained operational.”
In addition, the Chinese can still use their local banks and ultimately exchange their Yuan for cryptocurrencies as long as they do not indicate that a transfer is intended to buy Bitcoin or Ethereum.
China is unlikely or even unable to ban Bitcoin completely in the country. As such, the sensational headlines of pessimism and pessimism induced by Chinese media create a buying opportunity.
Are threats to ban BTC a catalyst?
Chinese industry groups say Bitcoino’s volatility puts consumer ownership and financial security at risk. But this is not the first time that China has attacked cryptocurrencies.
First, China shut down its local cryptocurrency exchanges in 2017. Two years later, the government blocked access to domestic and foreign cryptocurrency exchanges and initial coin offering platforms (ICOs). ).
That said, in the future, institutions should not provide cryptocurrency savings, trust, or escrow services, and should not issue crypto-related financial products.
BK Asset Management CEO Boris Schlossberg commented in a note that as long as Chinese authorities enforce a ban on Bitcoin, demand for cryptocurrency will increase in China. The alternative to Bitcoin is a fully traceable digital currency that could be subject to strange rules, such as an expiration date. According to MarketWatch, Schlossberg also wrote:
“The greater the effort by Chinese authorities to ban cryptocurrencies on the mainland, the greater the desire of Chinese citizens to export some of their net worth to an anonymous store of value.”
Should you buy Bitcoin now?
Bitcoin was trading near the $ 38,000 level to close the trading week. Just over a week ago it was valued at $ 50,899 and on April 16 it was trading over $ 60,000.
So, should you buy Bitcoin now? The answer depends on your risk tolerance. If you see the price of Bitcoin rising above $ 38,000, it could be a sign that the bulls are gaining the upper hand and the start of a sustainable rally to at least retest the $ 40,000 and possibly 50,000 levels. $ in the weeks or months to come. . However, if Bitcoin falls below $ 35,000, one would assume that sellers are eager to exit at all costs, while buyers seek a lower price to enter.
Should you buy cryptocurrencies in general now?
With such news, BTC is not the only currency affected and people are constantly wondering if it is a good idea to invest in cryptocurrencies, after all, they are volatile and subject to new restrictions from the market. overnight in China.
But given that China has already “ banned ” Bitcoin on several occasions, it’s safe to assume that a true ban is out of the question. Of course, this can turn out to be wrong, and investors should only hold Bitcoin and other cryptocurrencies as part of a well-diversified portfolio spanning multiple asset classes.
This way, if BTC drops another 20% but a basket of stocks and commodities increases by 10%, Bitcoin’s losses can be fully offset.
While it is true that some cryptocurrencies have lost astronomical amounts in value, some coins have skyrocketed after the fact. In fact, many investors buy the bottom and invest in currencies that have the potential to grow.
XRP XRP / USD (from $ 1.62 to $ 0.95 back to $ 1.05)Cardano ADA / USD ($ 2.40 to $ 1.22 to $ 1.60)Chainlink LINK / USD (From $ 51.55 to $ 23.41 to $ 27.26)
All of these have started to level up in terms of value, and we will surely see cryptocurrency level up in the future.
Go ahead after the ban
Either way, if the technology is revolutionary enough, there is a good chance that it will end up being valuable, and as long as you invest in cryptocurrency projects that are really changing the world of cryptocurrency for at best, no ban or restriction can stop its growth. .
This might actually be a great time to hold onto your tokens or buy new ones when prices are low, so when all of that happens you can potentially get a great return on your investment.