Another day, another attempt by China - where the reception of the digital yuan has been a total disaster so far much to Beijing's complete humiliation - to crash Crypto, with Reuters and Bloomberg reporting moments ago that just two days after the PBOC barred financial institutions from accepting bitcoin as payment, China's vice premier Liu He said (at 11pm on Friday local time) that China will crack down on bitcoin mining and trading activities, which of course is what we already knew.
- CHINA'S VICE PREMIER LIU HE SAYS TO CRACK DOWN ON BITCOIN MINING AND TRADING ACTIVITIES
And From Bloomberg
- *CHINA REITERATES CALL FOR CRACKDOWN ON BITCOIN MINING, TRADING
So China will reiterate, i.e., repeat what it has said, the same news every day until bitcoin hits 0? Or at least it hopes to, and somehow this is supposed to inspire confidence in the digital Yuan? And yes, this is as some have jokingly pointed out, the 1000th time China has tried to ban bitcoin:
BREAKING: China attempts to ban #Bitcoin for like the 1000th time.— Bitcoin Magazine (@BitcoinMagazine) May 21, 2021
What is even funnier is that a month ago Peter Thiel grabbed headlines with his laughable conclusion that bitcoin was helping China to end the reserve status of the dollar and was a "Chinese financial weapon". How about now, Peter, is China's crushing bitcoin to boost the dollar? Inquiring minds want to know.
Incidentally, a cynical take of this report is that it is great news as it means no more dirty coal bitcoin mining in Xinjiang. How will the ESG cult bash bitcoin if there are no more coal-fired plants generating the electricity for Chinese miners?
As a reminder, China is the bitcoin bears biggest friend: as long as bitcoin can be mined in China it is "dirty." Once China bans bitcoin mining there, the anti-ESG case collapses as miners end up moving to cleaner and more ESG-friendly venues.
For those wondering about China's neverending - and unsuccessful - campaign to destroy bitcoin, here is a breakdown of major regulatory announcements in China courtesy of CoinTelegraph:
FUD watchers got a glimpse of an old favorite as three government bodies in China, including the China Internet Finance Association, the China Banking Association and the China Payment and Clearing Association re-warned the public about the risks of investing in cryptocurrencies. This dates back to a 2017 ruling that all exchanges must close and a 2018 ruling on ICOs. But is it actually illegal?
For starters, these types of announcements are a good indication that cryptocurrencies are starting to flare up in popularity. Whenever speculative digital assets begin to grab headlines and seep into more mainstream culture, these warnings and reminders are common as a method of discouraging more open adoption.
Last year it was established that owning virtual currencies was not in itself illegal, only that virtual currencies could not be used as legal tender. Even though exchanges are supposed to be illegal, numerous exchanges operate within the country, even partnering with government organizations in free trade zones and hosting large events. There is very much an understanding of being free to innovate, as long as it doesn’t start breaking other laws, such as money laundering, fraud or aiding capital flight. If not for this convenient truth, there probably wouldn’t be much of a column left for Our Man in Shanghai to write about.
In any case, the news was enough to spark another algo-driven liquidation as the robots apparently have a 15 nanosecond memory and have forgotten that China has said all this and more both a few days ago as well as years ago when it first cracked down on crypto and banned bitcoin and its peers on the mainland.
The selloff has pushed bitcoin back under its 200DMA again:
And stocks follow cryptos lower, as China now appears to also be attacking the US stock market - which has become joined at the hip with crypto.
Will this aggression stand, Mr "big guy" president?