Blockchain Asset Review
How China’s Crypto Mining Bans Might Impact the Crypto Market
In June 2021, China enacted some of the most comprehensive bans on cryptocurrency use and mining of anywhere on the globe. Given China’s role in the world economy, these bans were some of the most important digital currency news of 2021. In the immediate aftermath, values for the most popular cryptocurrencies Bitcoin, ether, and XRP fell sharply. Other cryptocurrencies fell, as well. This led many people to speculate whether cryptocurrencies could continue to thrive in the wake of these bans.
While those bans may have resulted in a downward digital currency trend, a month later it does not seem like that negative impact is going to stick. It has resulted in greater volatility in the crypto market than we had recently seen. Crypto had been consistently and rapidly trending upward, with peaks and valleys but an overall climbing trend. That is what led investors to flock to crypto in the first place and to the creation of these huge crypto mining firms.
One of the top questions that people want answered is why China and other countries are moving to ban cryptocurrencies. They have reasons that may be legitimate. As digital money news reveals, these crypto markets are highly speculative. The more of a country’s assets that are invested in speculative markets, the more vulnerable the country’s economy is. China and other countries have listed that potential vulnerability as their main objection to cryptocurrency.
However, that speculative nature is the very reason that investors are making so much money in the crypto marketplace. Even if they have to invest offshore, Chinese investors are still going to be looking at cryptocurrency to complete their investment portfolios. This is clear when we look at the incredibly high valuations that crypto farming companies have been getting, even after China’s crackdown. Countries may be worried about speculation and instability, but individual investors are still willing to take their chances on digital money.