Over the weekend, The Economist offered its take on Bitcoin’s (and other altcoins’) China problem.
It argues that regulation has driven people in China out of that market in droves over the last four months or so, which isn’t a shock to anyone.
“Most investors have left the market,” BTC China’s Bobby Lee told the magazine.
Then and Now
In late November, Bitcoin’s value against the dollar broke well clear of the $1,000 mark. On some exchanges, it peaked above $1,300. More than 100,000 Bitcoins were traded daily on the BTC China exchange, and we were all excited about China leading the way.
Today, Bitcoin’s value in dollars is less than half of that November high, and “hardly 2,000 coins are now traded daily on BTC China,” The Economist notes.
In early December China’s central bank declared that Bitcoin was not a currency. This slowed its rise, but enthusiasts remained unbowed as the declaration fell far short of the outright ban some had feared. Then regulators forbade the firms that act as middlemen between businesses and credit-card networks from working with the exchanges.
Many believe the other shoe is about to drop this week.
Rumours now suggest that the central bank has instructed commercial banks to halt all dealings with cyber-exchanges by April 15. Such a move would be even more harmful to Bitcoin, says Zennon Kapron of Kapronasia, a local expert on the topic. As in most places, Bitcoin has not taken off as a means of payment in China; instead, it is mainly a speculative investment.