2 months ago
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If China re-enters the crypto market, it could drive a major upward rally. Additionally, embracing Bitcoin could solidify China’s position in the global fintech landscape, enhancing international trade.
Galaxy Digital CEO Mike Novogratz recently shared on X that China might lift its cryptocurrency ban in the fourth quarter of 2024. Novogratz mentioned he had heard these reports twice in recent weeks, suggesting that if true, it could be a “huge deal” for the crypto world.
Bitcoin Ban
A few years ago, China was an important hub for mining and trading cryptocurrencies. But the government’s attitude toward the industry was always severe. In 2013, it banned financial institutions from engaging in Bitcoin transactions. A number of regulatory actions intended to slow the expansion of the cryptocurrency market came after this.
In 2017, China banned Initial Coin Offerings (ICOs) and closed down domestic crypto exchanges. The crackdown intensified in May 2021, with a complete ban on crypto mining and all related transactions. This resulted in a sharp decline in Bitcoin’s market capitalization and value.
A Potential Unban
Despite the stringent regulations, the demand for cryptocurrencies in China has remained high. Many Chinese users have found alternative ways to acquire and trade digital assets, often resorting to overseas exchanges and underground markets.
Recent reports suggest that the Chinese government might be rethinking its stance on cryptocurrencies, citing “sources close to the matter.” Unbanning Bitcoin could be part of a broader strategy to embrace blockchain technology and digital assets.
If China re-enters the crypto market, it could drive a major upward rally. Additionally, embracing Bitcoin could solidify China’s position in the global fintech landscape, enhancing international trade.
Crypto Community Reacts
The crypto community is divided when responding to this news. An X user, Mr. Mad Fomo, stated that the potential unbanning indicates China has realized that Bitcoin mining balances the electrical grid and makes it more resilient during peak load times.
“It may also mean that [the government] realize that they’ve overbuilt renewables and allowing all those wind turbines and solar arrays out in the middle of nowhere (which makes it expensive to transmit to urban consumption centers) to mine bitcoin is key to making them profitable. Because greening the grid is one of the main things in the current 5yp,” he explains.
On the other hand, a Chinese crypto analyst Crypto_Painter called the news fake. He noted that China’s primary goal in banning crypto trading and mining was to prevent capital outflows and stabilize foreign exchange. Given the current economic climate and the CNY/USD exchange rate, he believes lifting the ban is highly improbable. He suggested that the rumors might be an attempt to manipulate the market.
However, an X user questioned why Hong Kong has recently embraced crypto if the mainland is against it. The user speculated that Hong Kong’s move could be the first step towards lifting the ban in mainland China.
