More than 20 Chinese companies linked to digital assets have revealed that they will halt operations and withdraw from the local market as the country maintains its hostile stance on all things crypto.
The Effect of The Chinese Crypto Ban
China’s negative stance on the cryptocurrency industry has been known for years, and the local authorities tend to remind investors about it frequently. In late September, the country’s central bank released a document stating that trading and mining of digital assets is banned within Chinese borders. It also prohibited people from operating with such exchanges.
Soon after, many crypto-related companies started going out of business. According to the China Securities Journal, the number of those entities stands at more than 20 as they will stop providing services and move abroad.
Speaking of these organizations, it should be noted that the intensification of the ban has caused the main trading platform – Huobi – to suspend the registration of new users from China. A few days later, one of the largest Bitcoin pools – Huobi Poll – moved over $4 billion in BTC from miners. This is the largest inflow of funds since December 18, 2017.
The Chinese crackdown reached Sparkpool, too. ETH’s second-largest mining pool announced last week that it had halted access to new users in mainland China and ceased all of its services as of September 30.
On top of everything, the Chinese government seized mining equipment in the northern province of Inner Mongolia marking the 45th such confiscation in that province.
BTC strengthens after Chinese bans
Although the government of the most populous nation has redoubled its efforts to stop all possible cryptocurrency operations within its borders, bitcoin has finally resisted the attacks. In fact, as of the moment of writing these lines, the price of the asset stands at around $54,500, which is about a 25% increase since the People’s Bank of China’s latest ban.
Popular whistleblower Edward Snowden also recently shared his thoughts on the matter. According to him, the Chinese restrictions actually made bitcoin stronger.
In turn, Katie Haun – partner at venture capital firm Andreessen Horowitz (a16z) – urged U.S. financial regulators to do the exact opposite of what China has done so far:
“This is an opportunity for the United States because we should be doing the exact opposite in my mind in this realm of what China is doing.”
It appears that, at the moment, the larger economy has no intention of implementing such negative policies against bitcoin. Both Fed Chair Jerome Powell and SEC chief Gary Gensler reassured that the country will not prohibit the usage of digital assets.
