How does China affect the Bitcoin price?
China is now the center of attention for the cryptocurrency and blockchain markets at the moment. The evidence is that the FOMO wave from China has pushed the price of projects belongs to this country and Bitcoin soaring. Therefore, there is no reason why we cannot doubt that China has a significant influence on the Bitcoin price.
China and its influence on Bitcoin price
To make this argument clear, we need to go back to 2013. On December 5, the cryptocurrency market was volatile when China banned financial institutions from processing Bitcoin transactions. Bitcoin price at the time dropped by 20%, from over $ 1100 to just over $ 900. And this decline only lasted a few hours.
Continuing, at the end of March 2014, Chinese financial magazine reported that the Central Bank of China required local banks to close Bitcoin trading accounts. At that time, the Bitcoin price was down 8%.
Do you remember the 2017 Bitcoin explosion? Before entering that period, Bitcoin struggled with Chinese authorities. In early September 2017, Chinese regulators formally banned the ICO (Initial Coin Offering). Moreover, many sources also confirmed that the government was planning to close cryptocurrency exchanges.
On September 15, one of China’s top cryptocurrency exchanges seems to have confirmed this on Twitter and announced plans to stop all transactions by the end of the month. The price of Bitcoin (which has been on a downward trend, perhaps in response to the ICO ban) has dropped more sharply, by over 20% during the day.
1/ After carefully considering the announcement published by Chinese regulators on 09/04, BTCChina Exchange will stop all trading on 09/30.
— BTCC (@YourBTCC) September 14, 2017
However, China’s crackdown policy at the time did not hinder Bitcoin. Thanks to the advent of futures contracts and the whale manipulation, the Bitcoin price increased, and by December, it had more than tripled as the bull run accelerated.
After a string of days of price booms to nearly $ 20,000, negative news from China seems to have had an impact on Bitcoin. In early January 2018, China seemed to be turning to ban Bitcoin mining. However, this is only fake news because there are still many Bitcoin mining companies operating in China. However, at that time, the price of Bitcoin dropped significantly after the news spread worldwide. And shortly after that, the Bitcoin price dropped by nearly 25% in value over the next four days.
By 2019, things will not change
Throughout 2019, China continues to exert its distinct influence on Bitcoin. As we can see, at the beginning of the chart below, the price of Bitcoin and the number of google search keywords Bitcoin skyrocketed at the same time that Chinese President Xi Jinping gave a lot of compliments to Blockchain.
And at the end of the chart, we can see Bitcoin price drop even as Yahoo searches go up – perhaps a reaction to unconfirmed rumors that Binance’s Shanghai office has been closed.
The Chinese market continues to exert its apparent influence on Bitcoin, even in 2019. As we can see at the beginning of the chart below, the price of Bitcoin and google search for the keyword “Bitcoin” soared at the same time as the Chinese President Xi Jinping gave a lot of praise for Blockchain. And at the end of the chart, we can see Bitcoin price drop even as Yahoo searches go up – perhaps a reaction to unconfirmed rumors that Binance’s Shanghai office has been closed.
Below is a chart similar to the above chart if we look at reports of cryptocurrencies in Chinese media in the past month.
Once again, it is worth emphasizing that none of these are evidence of Bitcoin’s price reacting to Chinese market news. However, the correlations – and AZCoin News list only a few of the more important ones here – are undoubtedly remarkable.
Disclaimer: This is not trading advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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