After the latest reports about a cryptocurrency ban being enforced by Chinese authorities once again, bears pushed Bitcoin’s (CRYPTO: BTC) price down to under $41,000 and most of the cryptocurrency market followed suit — but many suggest that this is just a momentary setback and a buying opportunity.
What Happened: According to a Friday Fortune report, the selloff in cryptocurrencies such as Bitcoin, Ethereum(CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE) is not without precedent. In fact, while this is admittedly “the most aggressive [ban] to date,” China has been banning Bitcoin regularly since 2013.
News about China’s regulatory pressure over the crypto space has caused numerous selloffs over the past eight years but “when the news cycle is over, inevitably, crypto prices have started to rise again.” On Dec 5, 2013, China forbade financial institutions from handling Bitcoin transactions because the central bank found that it wasn’t a currency with “real meaning.” Bitcoin’s price fell by 20% to $889 but is now 4,600% up compared to that price.
In late March 2014, China did it again. Rumors suggested that local authorities would penalize banks that facilitated Bitcoin transactions and the coin’s value fell by 12% to $562 — but the current price is 7,345% higher.
In early February 2017, China renewed efforts to suppress Bitcoin and the now booming crypto space. The country’s central bank was tightening regulatory pressure and enforcing anti-money laundering rules for local cryptocurrency exchanges. Bitcoin’s price fell over 7% to $988 and took altcoins down with it — Bitcoin is up 4,135% since China took those measures.
In late August 2018 Chinese authorities stepped up pressure on cryptocurrency speculation and issued a warning about illegal fundraising with the use of crypto. The market largely ignored that ban, with Bitcoin closing the day up 4%, and has since increased by 520%.
On May 21, Chinese authorities said that tighter security was needed to protect the financial system and called for a crackdown on Bitcoin mining causing its price to fall by over 8.5%, which bought the rest of the crypto market down with it — Bitcoin is now 12% higher. If history is of any indication, China’s ban matters little more than a short-term downturn and a buying opportunity for Bitcoin and altcoins such as Dogecoin and Ethereum.