Once again the Chinese government has made moves on Bitcoin, this time causing it to surge to new highs. Following reports this weekend that the People’s Republic may rescind its ban on crypto trading, Bitcoin prices surged to a new peak of $6,300. A previous high of around $6,100 last week was broken during trading on Sunday.
A couple of recent items out of China can be attributed to this latest upsurge. Firstly the news that during the 19th National Congress of the Communist Party of China a number of previous regulations and policies were reconsidered. Among them was the abolishment of crypto currencies, a decision that caused Bitcoin to crash last month. The government originally banned ICOs in September and followed it up with a general ban on crypto exchanges; this caused a loss of around 25% of the value of Bitcoin plunging it back to around $3,500. Initial reports indicated that some of these temporary policies and regulations will be cancelled – this may include the ban on crypto trading.
Secondly rumours emerged of a new Chinese crypto exchange being launched on the first of November. The website, zb.com, will be in Chinese and English and will allow both Chinese and international traders to open accounts, make deposits and buy and sell coins. We could not access the site at the time of writing to verify this and were faced with a server timeout error.
It is still unclear who is behind this new exchange, should it ever materialize. Maybe the Chinese government is running it in an effort to further regulate and, more importantly, control the flow of finances to and from digital currencies within the country.
What is clear is that China has a huge influence over the crypto market – just these two stories alone have caused another spike in what many consider an already over inflated Bitcoin price. If China decides to rescind its currency clampdown prices are likely to climb further in line with increased global demand for Bitcoin and altcoins. Bitcoin is currently striving to reach a psychological $6,500 price point.
Mainlanders have been finding ways around their government’s crypto blockage, primarily by trading offline using chat groups and market places such as Alibaba. There could be a new coin-rush if the previous policies are lifted, allowing the Chinese back on to exchanges, regulated or otherwise, will only send prices one way, and that is up.