Bitcoin the King of crypto market is falling along with overall market prices, The fall of crypto market is because of China crackdown on Crypto trading and BTC mining operations.
Bitcoin is down more than 15% and altcoins are bleeding more as usual after harsh China measures toward BTC and Crypto.
Why China Crypto Crackdown?
Beijing always want to control everything, from social media to financial system they want a complete control. As it is difficult for China to trace every single BTC and other crypto transaction so they cannot regulate it, and this loosen China grip on crypto, which they never want to nor allow.
China central bank, People Bank of China (PBOC) banned any form of crypto trading ordering Banks and Payment Providers not to Deal with Crypto-Related Businesses Including Exchanges to “prevent and control financial risks”.
As China has strict rules for outflow of capital, Analysts say the ban is because China fears the proliferation of illicit investments and fundraising. According to Analysts, crypto is a threat to China financial controls.
Jeffrey Halley, Asia Pacific analyst said:
“China does not have an open capital account and cryptocurrencies circumvent this which is an anathema to China’s authorities,”
Many analysts thinks that China ban on crypto trading and BTC mining is only because they want to introduce their own blockchain-based, state owned Digital Yaun. Digital Yaun will enable China government to monitor each and every transaction in a way they want to.
China cheap power and mining hardware enabled companies to power almost 80 percent of the global crypto trade.
Bloomberg predicted that China will not be able to meet its crypto industry’s needs through renewable energy until 2060 as China relies on polluting type of coal, lignite, to power some of its mining firms.
As crypto mining consume a lot of energy and electricity, according to Cambridge University, Bitcoin Electricity Consumption Index, Crypto-mining is expected to use 0.6 percent of the world’s total electricity production in 2021.
Because of such high crypto power demands, China restrictions may be because there is a surge in illicit coal extraction and environmental issues that is serious risk to Beijing climate goals.
Colin Wu, Chinese journalist, who won 2013 China News Award tweets:
Caixin, a media most recognized by regulators of China, said: The Chinese authorities have decided to move towards a carbon-neutral green transformation, and they don’t care about so-called "Bitcoin pricing power". China no longer welcomes the mining farms.
— Wu Blockchain (@WuBlockchain) June 22, 2021
China Digital Currency Plans
China has made their Digital Yaun and it will allow China to reduce dependency on Dollar and conduct worldwide transactions.
Analyst Halley said:
“It is about making the Yuan more internationally available whilst maintaining complete control,”.
Leonhard Weese, Co-founder of The Bitcoin Association of Hong Kong said that it is not easy to take down Bitcoin.
“Bitcoin only marginally competes as a payment system, At the moment, its main appeal is that it cannot easily be seized, censored and debased.”