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Crypto has recovered from China’s FUD over a dozen times in the last 12 years


Crypto has recovered from China’s FUD over a dozen times in the last 12 years. Following “breaking” reports that the People’s Bank of China has ruled all cryptocurrency transactions unlawful, the price of Bitcoin plummeted 5% today.

With that in mind, let’s take a look back over the previous 12 years of Chinese disinformation. To see if we can identify any trends.

China banned ‘virtual currencies’ for the first time in 2009

China’s regulators have never been crypto enthusiasts. China’s Ministry of Culture and Ministry of Commerce banned the use of “virtual currency” for selling real-world commodities in 2009. When blockchain-based digital currencies were still in their infancy. Despite the fact that the action did not explicitly target Bitcoin (BTC), it appears to have set the tone for a decade of anti-crypto legislation.

The first Bitcoin-specific ban hit in 2013

The People’s Bank of China (PBoC) banned Chinese financial institutions from processing Bitcoin transactions in 2013. Describing crypto as a currency with “no actual significance”. BTC’s price fell below $1,000 as a result of the announcement. Which came at a time when BTC China, or BTCC, was the largest crypto exchange by volume. Within a few weeks, the asset was back to normal.

Fake ban threats plagued 2014

A false news report on the Sina Weibo website in March stated that China’s central bank planned to ban all Bitcoin transactions in the nation in less than a month. The news turned out to be false, however, Bitcoin’s price continued to rise.

Around the same time, China-based crypto exchange FXBTC announced its closure in the face of regulatory threats to prohibit exchanges. Bitcoin’s decline from $709 to $346 might be attributed to a mixture of both occurrences.

Despite the fact that it was undeniably gory, the price quickly recovered and was back above $600 by the end of May.

A Chinese exchange hack briefly tanked prices in 2016

Bitfinex, a prominent Hong Kong-based crypto exchange, was the target of one of the greatest cyberattacks in August 2016. While not being directly owned by China. Attackers took about 119,756 BTC, valued at more than $5 billion at the time of publishing. And some of the money is still being traced. The announcement of the big exchange breach is estimated to have triggered a 10% decrease in the BTC price across two days at the time. However, by September, prices had returned to pre-hack levels.

The Chinese government barred exchanges from servicing domestic customers in September, and the People’s Bank of China declared that Chinese residents would not be able to finance initial coin offerings.

Bitcoin rose from the $4,000s to a then-all-time high price of almost $20,000 in three months.

When BTCC said it was going down due to the government’s “ban” (it’s still operational) and the PBoC deputy governor saying “Bitcoin’s body” would float down the river one day, the cryptocurrency was on its way to one of its largest bull runs ever.

By this time, cryptocurrency had already begun to rebound and had only seen modest drops.

Media reports led to a short crypto crisis of faith in 2018

In January 2018, there were claims that Chinese people were to blame for a drop in key cryptocurrency values.

Many speculated that the drop was caused by Chinese media reports. Claiming that the nation was tightening down on cryptocurrency mining. Bitcoin’s price had plummeted more than 65% to $6,852 by mid-February.

However, this did not endure long. By the end of the month, the price had risen to almost $11,000.

The FUD raged on in 2019

In April 2019, the price of Bitcoin fell somewhat. As a draught from China’s National Development and Reform Commission indicated that the government body was contemplating banning mining in the nation once more.

Following this, the PBoC announced that crypto trading would be “disposed of immediately” if it was discovered.

Despite a temporary market correction, new all-time highs were on the horizon.

China was allegedly behind 2020’s ‘crypto bloodbath’

The “crypto massacre” of March 2020, when the price of virtually all major tokens plummeted at the start of the COVID-19 pandemic, was primarily blamed on Chinese miners selling their holdings.

In November 2020, Hong Kong’s government revealed intentions to restrict retail crypto trading as part of its efforts to combat money laundering.

Bitcoin broke the $20,000 barrier for the first time in three years in the first year of COVID. Reaching an all-time high of more than $30,000 before the year finished.

FUD comes to present day

In May 2021, China’s National Internet Finance Association, China Banking Association, and China Payment and Clearing Association released a statement advising against investing in cryptocurrencies due to the dangers.

The PBoC issued an edict the next month prohibiting Chinese banks and mobile payment service providers from providing banking and settlement services to customers involved in cryptocurrency transactions.

Then, in June, officials announced a genuine mining ban, sparking a huge exodus of miners that is still happening.

That takes us to today. When the People’s Bank of China (PBoC) has once again stated that all cryptocurrency transactions are unlawful in China.

19 times China FUD has failed to kill crypto

There have been 11 statements directly from Chinese and Hong Kong officials. Which imposing or hinting at implementing a ban on crypto, exchanges, or mining, including today’s letter from the PBoC. There have been eight notable examples of false news articles or media coverage originating in China that have influenced the crypto markets. There were also a few other events that triggered drops, such as hacks and choices made by crypto companies in the nation. Since 2009, China has “banned” or otherwise spread misinformation about cryptocurrency on more than 19 occasions.

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