Cryptocurrencies tumbled again this morning as China released yet another market-altering statement. In Beijing’s latest bid to crash digital currencies, Chinese Vice Premier Liu He reiterated that he would “crack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.”
And just like on Wednesday, when Chinese regulators made essentially the same remarks, today’s announcement revealed nothing new.
But as usual, mainstream media outlets couldn’t help themselves.
“China’s Vice Premier Liu He Says to Crack Down on Bitcoin Mining and Trading Activities,” read a headline from Reuters, the same news organization that sparked Wednesday’s sharp crypto sell-off.
Other websites and financial publications piled on.
“Bitcoin falls after China calls for crackdown on bitcoin mining and trading behavior,” was the headline for CNBC’s top story of the day.
Even Bloomberg avoided the fact that China was simply reissuing its original statement with today’s comments:
“China Hammers Bitcoin Anew With Warning on Miner Crackdown.”
But the truth is (again, just like on Wednesday) that this really shouldn’t be news. What’s actually happening here is an attempt from China to discredit the top cryptos while bolstering the digital yuan, which has thus far been an unmitigated disaster.
Beijing recently launched a trial of their digitized currency with over 500,000 people, all located in Shenzhen. Patricia Chen, a 36-year-old telecom worker said that she was “not at all excited” after participating in the test. China assured its countrymen that a digital yuan would dislodge the US dollar as a reserve currency.
Instead, it was received by economists with a collective “yawn.” And implementing the infrastructure necessary to accept an e-fiat-currency is proving to be more difficult than expected.
So, the next best thing is to poke holes in the crypto market via a persistent Bitcoin badgering campaign. It’s working thus far thanks to controversy-seeking Western media outlets, which have been more than happy to amplify Beijing’s message.
Bitcoin Magazine perhaps put it best with a tweet released this morning:
“BREAKING: China attempts to ban #Bitcoin for like the 1000th time.”
Oddly enough, though, China never mentioned an outright Bitcoin ban. Just that its industry heads would be taking a closer look at mining and trading.
The US Treasury Department did some damage to digital currencies, too, when it said yesterday that it would require reporting on crypto transfers of more than $10,000.
“It is necessary to maintain the smooth operation of the stock, debt, and foreign exchange markets, severely crack down on illegal securities activities, and severely punish illegal financial activities,” read a statement from the Treasury.
With global powers from both the East and the West setting their sights on cryptocurrencies, it sure seems like a good time to sell.
However, neither the statement from China nor the pressure from the Treasury should influence crypto’s long-term prospects. Yes, regulation fears have long sat at the back of Bitcoin holder’s minds.
But regulators aren’t looking to ban crypto. They’re just trying to bring it to level with fiat. The Treasury’s $10,000 transfer limit, for example, is required for cash transactions in the US.
And yet the dollar is doing just fine in spite of it.
So, unless China literally bans Bitcoin (or other cryptocurrencies), today looks like another buying opportunity.
No matter how many times Beijing says it’s going to start “cracking down.”
