How Chinese New Year Celebrations Could be Affecting Bitcoin (BTC)
Chinese history and culture cannot be summarized in this brief article for it dates back several millennia. Our window into the great past of China has been provided through timeless books such as ‘the Art of War’ and the majestic Wall of China that can be viewed from space. When it comes to Bitcoin (BTC) and cryptocurrency investing, China was ahead of the rest until the government placed a ban on all online trading. However, this ban did not include peer-to-peer trading or even operations of Over-the-Counter transactions. The Chinese government has also publicly stated that blockchain technology has a bright future.
Annual Chinese New Year Celebrations
It is also known that the Chinese New Year is marked in every corner of the globe for globalization has provided an avenue for not only Chinese citizens to travel and work anywhere in the world, but for every inhabitant of this great planet to move and experience different lands. It is with this minor fact of globalization that any individual celebrating the Chinese New Year of 2019, will most likely take some time off to visit relatives or even relax by taking a vacation.
The celebrations for 2019 begun on January 28th with the New Year officially beginning on Tuesday, February 5th. The festivities have been scheduled to continue till the 19th of this month. Below is a timeline that gives a better visual cue of how the festivities for 2019 have been laid out.
Lots of Travelling Every New Year
According to one report from ABC Australia, millions of Chinese are expected to travel abroad for the next two weeks or so. A few years back, the annual festivities were all about returning home to reunite with family. However, domestic and international tourism is widely becoming popular as interests in new experiences continue to increase. Considering the vastness of China, it will be an active time period for the transport industry which includes road, train and air travel.
How it Affects Bitcoin (BTC) and Crypto Trading
Despite the government ban on crypto trading, many Chinese traders and enthusiasts have found ways to circumvent such restrictions. Some traders within the country are known to use VPNs (Virtual Private Networks) to bypass online restrictions. Other traders and crypto based businesses have simply left mainland China and registered in friendlier jurisdictions. We can find such an example in Binance and Tron. In the case of Binance, the exchange moved from China, then to Japan. It soon spread its reach to Singapore, Malta, Uganda and now Jersey. Tron currently has dual headquarters in Beijing and San Francisco (perhaps as a precaution?).
It is therefore safe to conclude that China still contributes a significant percentage of the daily BTC and crypto trading volume. With the New Year festivities, that trade volume is bound to be affected. One needs only look at the decline of Bitcoin (BTC) early January 28th. This date happens to be the same day the New Year festivities begun. On the 27th, BTC was hovering above $3,500 but by the 29th, it was valued at $3,349. The chart below from Binance gives a better picture of the situation.
Summing it Up
In conclusion, we at Ethereum World News would love to wish a Happy New Year to all who celebrate the Chinese Tradition. Also, there is sufficient evidence of low trade volume from the past few days to conclude the following.
Residents of China still trade cryptocurrencies and their absence from trading during the New Year festivities can be felt
A possibility of many cashing out to fund their travel and vacation plans
Bitcoin and other cryptos might not be as volatile at least till after the 5th of this month
The inactivity might stretch out to the next two weeks as many celebrating the Chinese New Year continue to travel and vacation
There might be a slight possibility of BTC experiencing new lows before the end of the New Year celebrations
What are your thoughts on the effect of the Chinese New Year on the value of Bitcoin and all other cryptocurrencies? Does the theory hold water? Please let us know in the comment section below.
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.