Bitcoin, which sustained a positive price rally during the last week, significantly declined in cost in the last 24 hours, plummeting by 21% after the Chinese authorities issued a caution to Bitcoin customers against potential risks.
The people’s bank of China launched an announcement to emphasize their stance on Bitcoin reiterating that the authorities of China does not keep in mind Bitcoin to be a currency. Nevertheless, the central bank of China highlighted that Bitcoin continues to be a cryptocurrency or a digital good, which is legally traded and used inside the China.
Chinese authorities in the country spoke to main Bitcoin exchanges, which includes BTCC, Huobi and OKCoin to speak about the reputation of regulatory frameworks and policies applied for Bitcoin startups in the country. During their meeting, it was disclosed that the central bank actually asked the 3 exchanges to keep operations in compliance with Chinese rules and regulations. The Chinese government and central bank issued a warning and statement to the majority, which entailed that the primary bank nor some other corporations in China are answerable for any potential dangers that Bitcoin might also or may not maintain.
The central bank of China stated:
“Bitcoin is a particular digital good and does not have the identical legal reputation as the currency. It can’t and need to not be used as money in the market circulation. Participating institutions and individuals have to carefully interact in activities such as Bitcoin investment and bear the corresponding responsibilities and dangers.”
Irrespective of the actual intentions of the statement, some media outlets and public figures aggrandized what was a sensible and popular declaration stemming from the Chinese government’s problem over the growing price and usage of Bitcoin. Moreover, the Chinese government and its central bank issued a public announcement for the people to keep in mind that the government isn’t always responsible for their independent usage of Bitcoin, misunderstood and misled shops created fake propaganda and rumors leading to talks of a ability Bitcoin ban in China.
BTCC, a main Chinese Bitcoin exchange stated:
“BTCC meets with the people’s bank of China and we work with them to make sure that we are working with the laws and regulations of China. the press launch positioned forth from the people’s bank of China nowadays outlines that there may be great volatility in Bitcoin trading, and quoted from a notice released in 2013 announcing that Bitcoin is a digital good and doesn’t have legal tender reputation. All of our users have to be aware about the modern rules on digital items as well as the dangers concerned in buying and selling in risky markets.”
Such inaccurate speculations on the Chinese Bitcoin trade marketplace and the complete Bitcoin industry plunged the price of Bitcoin, which recorded a 21% loss, declining from $1,010 to $876. If China’s warning declaration on Bitcoin caused a 21% decrease in 24 hours from its launch, an inevitable action to prohibit Bitcoin will particularly the same as drive the rate down in a short time period, as seen in 2013. Investors and buyers have to keep in mind that the benefit of referring to Bitcoin as an international and decentralized store of value is that not a single entity or organization is able to banning or shutting the network.
Andreas Antonopoulos noted:
“The question isn’t whether Bitcoin should be regulated, but whether it can be regulated. The truth is not. The rest is nostalgia.”