Written by Joseph YoungcontributorReviewed by Igor Belkinformer editorMedia Spread Wrong “China Bans Bitcoin” Narrative, Causing Bitcoin Price Slump
MagazinePublishedJan 8, 2017
Some media misinterpreted the Chinese government and the People’s Bank of China actions in regard to Bitcoin, causing the price of the cryptocurrency to drop.
Recently, the Chinese government and the People’s Bank of China offered reasonable suggestions to Bitcoin exchanges and users, discouraging fake volumes and offline scam-like promotions while asking users to maintain responsibility for their independent actions.
But some media outlets, mostly western-based, used the events to spread panic among Chinese investors, leading the price of Bitcoin down to $830.
No Bitcoin ban
However, the price of Bitcoin quickly recovered, as major Chinese exchanges including BTCC published statements pertaining to the discussion they had with the Chinese central bank. Both exchanges and Chinese local publications reassured investors that the country did not issue a ban on Bitcoin.
Caixin, a leading Beijing-based business and financial publication, stated:
“For example, the two [Bitcoin] trading platforms in Beijing were required to comply with the central bank requirements and were told that the promotion should not mention the depreciation of the yuan-related content and conduct offline promotion.”
BTCC, China’s largest and longest-running Bitcoin exchange, also said in a statement:
“The press release put forth from the PBOC... outlines that there is significant volatility in Bitcoin trading, and also quoted from a notice released in 2013 saying that Bitcoin is a virtual good and doesn’t have legal tender status. All of our users should be aware of the current policies on virtual goods as well as the risks involved in trading in volatile markets.”
All in all, a statement which Chinese Bitcoin exchanges and the government anticipated to be a simple warning of responsibility to users was completely miscomprehended and then misleadingly distributed to the general public by the media.
Spreading panic and propaganda
There were some media outlets, such as Zero Hedge, that further pushed the “China banned Bitcoin” narrative over the past week. While local publications including Caixin accurately informed the Chinese population about the government’s statement, western media outlets published various narratives that can possibly be misunderstood as an imposition of a ban on Bitcoin.
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