New theory suggests China’s ban on Bitcoin was motivated by something else

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Busi­ness­es in Chi­na have been los­ing rev­enue since the country’s pol­i­cy deci­sion to ban Bit­coin and oth­er relat­ed oper­a­tions. Accord­ing to the lat­est reports, Huo­bi Glob­al, one of the largest exchanges in Chi­na, has lost around 30% of its rev­enue. Mean­while, oth­er plat­forms and min­ers have found new homes across the globe.

Mean­while, the crack­down by Chi­na con­tin­ues with Chi­nese jour­nal­ist Col­in Wu point­ing out recent arrests con­cern­ing ille­gal cryp­tocur­ren­cies worth $80 million.

Hav­ing said that, it was also made clear that Chi­na might not recon­sid­er revers­ing the ban that was ear­li­er being speculated.

How­ev­er, Bit­coin entre­pre­neur John Car­val­ho has again left room for some spec­u­la­tion with his new the­o­ry. He believes that Chi­na has an ulte­ri­or motive behind the ban that ‘com­bined FUD with a removal of hash pow­er.’ In a recent pod­cast, he speculated,

“What I think is that there’s a por­tion or time in every Bit­coin cycle where Chi­na decides to basi­cal­ly price manip­u­late, in order to get more Bit­coin. And they will you know, sell their Bit­coin.” (sic)

He fur­ther explained that Chi­na will use the ‘col­lat­er­al to short Bit­coin to get the price down, and re-accu­mu­late lat­er at the bot­tom.’ After the pol­i­cy announce­ment by Chi­na, Bitcoin’s short-term price had weakened.

It is note­wor­thy that Car­val­ho has made it clear that his the­o­ry has made assump­tions that might not be air­tight. But, he com­ment­ed that he “refus­es to believe that Chi­na is stu­pid”. Con­sid­er­ing, the US is now the num­ber one min­ing des­ti­na­tion, con­tribut­ing over 35% to the glob­al hash power.

In that con­text, Car­val­ho remind­ed that,

“Chi­na is also dom­i­nant in the pro­duc­tion of ASIC chips for min­ers, not just min­ing directly.”

So what to expect next?

There­fore, his the­o­ry revolved around China’s deci­sion to ban Bit­coin by cre­at­ing “a demand for the after­mar­ket”. As min­ers have ‘inflat­ed’ the val­ue of chips, he added,

“My the­o­ry is that all they did was they sold a small por­tion of their miners.”

How­ev­er, he added that there is no real gauge to know how much of the min­ing oper­a­tions were sold to the US. But, Car­val­ho seemed con­vinced that Chi­na is, in fact, buy­ing Bit­coin at $30k.

The Bit­coin com­men­ta­tor fur­ther pre­dicts that Chi­na will reverse the ban on min­ing activ­i­ties, lead­ing to par­a­bol­ic gains in the industry.

“And so they’re just try­ing to find ways to manip­u­late the price to be able to get more Bitcoin. “

 



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