After a double blow from China, with its ban on ICOs, then news of total exchange bans, not to mention Jamie Dimon’s vitriol against Bitcoin, the digital currency briefly crashed to $3,000 before rapidly soaring back to, and holding, the $4,000 mark.
Digital currency users are finding ways around the Chinese bans, other countries, like Japan and Hong Kong are profiting, and people are exposing Dimon’s ploy, all indicating that Bitcoin is now stronger than a few bumps in the market’s road.
Still as bullish as ever
Peter Van Valkenburgh, director of research at Coin Center, a Washington-based nonprofit research firm focusing on cryptocurrencies, sees positives in China’s knee jerk reaction. Valkenburgh said:
“The efficacy of any bitcoin ban is pretty dubious. It’s bullish because if a powerful government like China feels the need to ban major trading, then it’s a good indicator that the technology works and that it does what it’s supposed to. If it overcomes those controls, then it’s further proof that it’s independent from government controls, which is pretty radical.”
These bans and crackdowns may have made things more difficult for Bitcoin users, but hasn’t made them impossible. Those affected by the ban have been utilizing LocalBitcoins and even moving away from the state-controlled messaging app, WeChat.
China is no longer the powerhouse
China’s share of the broader cryptocurrency market isn’t as high as it once was, so changes in regulation have had less impact than they might have a few years ago. Bitcoin trading against the Chinese currency has dwindled to 19 percent of total volume in the past six months, from about 90 percent last year, according to digital currency data website Bitcoinity.
The bounce back from these negative hits, in such quick and powerful fashion, indicates that there is not much in terms of real world market pressure that can derail Bitcoin.
The slump of about 20 percent is actually rather minor if looking at the volatility of the past. Bitcoin has become too big and too entrenched to be sunk by one or two small mishaps along the way.