China softens its position in relation to bitcoin and the cryptocurrency market

In an interview with CNBC, Circle co-founder and CEO Jeremy Alleier talked about how there has been a tendency in China to “soften” its tough stance on cryptocurrencies .

“Recently, a Chinese court ruled that Bitcoin (BTC) in China is regarded as property protected by law, and this is a very important point. We saw that one of the largest commercial banks, the Bank of China, began to talk about the advantages of bitcoin, its risks, as well as its role in the world. ”

Back in 2017, the Chinese government banned ICOs and bitcoin trading. In addition, China began to prevent the mining of bitcoins , and therefore many large miners began to leave the country.

However, in June 2019, the state-owned Xinhua News Agency called Bitcoin “a safe haven asset,” which probably indicates a change in the position of the Chinese government. In addition, in July, the Bank of China released an infographic that advertised the benefits of bitcoin as an asset with a limited supply and explained the payment network.

Jeremy Alleier also noted that the Chinese themselves are actively trading bitcoins through offshore platforms in other jurisdictions, and also pointed to a “macro-correlation” between the price of bitcoin and the growing tension in relations between the US and China.

“I think that the role of bitcoins and cryptocurrencies against this background is becoming increasingly obvious. The growth of nationalism, trade wars, currency conflicts – all this is supported by a government-independent and highly secure digital store of values. ”

However, in his series of tweets, the founding partner of Primitive Capital, Davi Wang, tries to refute this position:

“Buying up bitcoins by the Chinese is a VERY dubious plot. 1) Bitcoin on Chinese exchanges such as Huobi and Okex is trading at a negative premium. 2) The over-the-counter price of the Bitcoin in RMB is now 1% higher, which corresponds to the normal range (since the growth began).

I think that the general global financial uncertainty really contributes to the growth of the market, however, the capitalization of bitcoin does not necessarily occur thanks to the Chinese. It should be noted that gold trading volumes and its price also increased in trading pairs with the yuan.

… if you really need to insure yourself against global financial uncertainty, especially from the devaluation of the local currency, then Tether would be quite suitable instead of bitcoin … BTC is a longer-term hedge for wealthy investors. ”

Publication date 08/07/2019
Share this material on social networks and leave your opinion in the comments below.