However, news from China has caused the digital coin to slip back below the US$4,000 mark.
As reported by The Australian Financial Review:
‘[China is] forcing major bitcoin exchanges operating on the mainland to shut down and banning their executives from travelling outside the country.
‘State-owned media reported the travel ban on Monday, and a source close to one of the biggest exchanges, Huobi ,said its founder Li Lin was required to “report to the authorities and cooperate with their work at any time”, which effectively means he is not allowed to leave China.’
Bitcoin Future in China
Many analysts are now pessimistic for bitcoin’s future in China. The Chinese government’s views on digital tokens has escalated quickly. They want to ensure financial stability within their market, and they see cryptocurrencies as a market distributor.
In fact, stability is a top priority for Chinese policy markets. And it’s hard to argue that bitcoin and other cryptos wouldn’t shake things up.
For example, imagine if China hadn’t banned ICOs and imposed travel bans. China is pulling hundreds of millions of people out of poverty and into the middle class. With this newfound wealth, many might look to bitcoin and other cryptos as a way to double their money in a short amount of time.
So what happens when more citizens pour money into an extremely volatile digital token? Some will make money. But others might create a speculative bubble just waiting to burst. While this might not be the exact situation that plays out, it’s a likely scenario in Chinese policymakers’ minds.
How Will Crypto Buyers Respond?
So the question now is not whether China will continue to boycott cryptos. What’s more important is how buyers respond from here. If they ignore China’s actions and continue to buy, then bitcoin holders have no need to stress. However, if China’s actions are scaring buyers off, then bitcoin might flatline and fall more from here.
However, it is worth noting that when bitcoin reached a low of US$3,226.4 in September, buyers came as if they thought the digital coin couldn’t fall any lower.
In any case, what the price does from here is anyone’s guess. But, if you’d like to know more about the secret world of bitcoin, click here.
Junior Analyst, Money Morning