Does The Global Market Really Care About The Anti-Crypto Crackdown That Took Place In China?

• Avinandan Banerjee
• September 07, 2021

The cryptocurrency crackdowns that have been taking place in China meted out by the Chinese government officials in a systemic and pretty sustainable manner have not only continued to happen but also have grown in intensity following the last few months. As a result, these crackdowns have had a major FUD among the community of investors in the crypto ecosystem. FUD is short for fear, uncertainty, and disbelief which is basically used as a propaganda tactic that is applied in multiple and diverse social sectors like politics, marketing, sales, cult, polling, etc. 

However, if we take a detailed look at the market and the statistical analyses, it seems quite evident that the crypto market is not paying a lot of heeds and on the contrary, ignoring the unpleasant headlines spewing out of the most populated part of the world. The investors are now feeling a lot more optimistic after observing reports of events regarding crypto miners migrating elsewhere and other such developments.

China has been occupying the center stage in the world of cryptocurrencies with its advanced demography of a tech-savvy population. At the peak of its powerful position, China has been the top contributor to the phenomenal hashrate of Bitcoin across the world. All the credit goes to the miners, the majority of whom have been domiciled in their own country itself.

Despite being on top of a position that can easily be termed as alluring or even enviable, the authorities in the Chinese government have decided to enforce a major backlash against the crypto community operating in the country, and as a result, the situation now is simply spiraling out of control. 

Anti-Crypto Sentiments in China

China mines the most amount of Bitcoins in the whole world, and it contributed to more than 50% of the global hashrate of Bitcoin. In addition to this, the country also comes first when it comes to the mining of other cryptocurrencies. China’s impact on the world of cryptocurrencies is enormous and profound. This is because, in a country of over 1.4 billion people, many of the founders of different crypto share the same Chinese heritage.

However, the entire scenario started breaking down in chaos when the government authorities decided to enforce crackdowns on the cryptocurrencies and all activities related to them, and they started doing this in a renewed vigor. It was during the month of May when everything came to a head when the government officials ordered the banks that they are to be precluded from providing any assistance to or facilitating any type of transactions that has to do with cryptocurrencies. The authorities started conducting raids and even made a considerable number of arrests, because of which the investors were stricken with panic, most of them. More than $1 trillion simply disappeared from the markets. As a result, in the middle of the dwindling state of hash rates, the biggest cryptocurrency in the world had to witness the biggest fall from $64,000, which was its highest valuation to date, to as low as $30,000. 

The Market Does Not Care Much

A few months after the FUD was spread through the Chinese crackdowns, the global crypto markets have grown exponentially, climbing to a whopping $2 trillion, and experts are of the opinion that this growth happened in clear defiance of the Chinese crackdown. As soon as the miners began to migrate from China to places that are far more favorable for carrying out their work, the hash rates instantly started improving and recovering. 

Many of the experts have opined that the antics of regulatory endeavors are not exactly what they seem to be. Even after the ban was declared, it was still possible for the residents in China to trade cryptocurrencies on exchanges existing outside the purview of Chinese authorities. Owing to the anonymous and decentralized character of the cryptocurrencies, it is actually possible to continue trading, no matter the time and place of the trader.

After several months of depression, the fact that now we can see the spiked prices fuelling the institutional investors to pour more money into the crypto space and the fact that developing countries such as Cuba and El Salvador embracing Bitcoin in the form of a legal tender are clear indicators of the fact that the market has largely remained pretty much unfazed by the Chinese crackdowns.

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