Although Bitcoin investors are no stranger to price fluctuations, recent actions by Chinese regulators will have many seasoned players anxious about the future as the Bitcoin price plummets.
In no other country has Bitcoin investment been as frenetic as it has in China. Average Chinese citizens have taken a favorable view of the decentralized currency over and above the national currency, which has performed badly in 2016 and is regularly manipulated by the People’s Bank of China. The Bitcoin price has has been reflected in this heady ride.
Since late 2013, Chinese citizens have invested heavily in Bitcoin, driving prices to over $1100 in September 2014. Despite a sustained effort by the Chinese government to stifle Bitcoin’s rise, China is now the undisputed center of the Bitcoin universe. Today, Chinese Bitcoin exchanges account for the vast majority of global bitcoin trading.
Bitcoin’s latest price rises and increased trading have forced government authorities to act to prevent the possible use of Bitcoin to facilitate the flight of capital out of China. In a public notice, the Shanghai branch of the PBOC revealed it carried out spot checks on BTC China.
“The People’s Bank of China Shanghai HQ, the Shanghai Municipal Finance Office and other units formed a joint inspection team to carry out site inspections on Bitcoin China, focusing on checking whether it was operating beyond its business scope, whether it was engaging in unlicensed forex, payment, financing and other related businesses; whether it engaged in market manipulation; implementing anti-money laundering, financial security risks and so on.”
Regulatory notices and spot checks by Chinese authorities have caused concern in the global Bitcoin community who fear that sweeping government action may drive the Bitcoin price into the ground. Bitcoin crossed the $1000 mark in the first few days on 2017 but has now struck a low of $790.
For now, Bitcoin investors and the wider community will look to China to watch for any future actions taken by authorities. What happens in China will have significant ramifications on the rest of the Bitcoin world.