The crypto market is going through a rocky time at the moment because of news coming from China. The Chinese government is turning the heat up on the crypto market, and Bitcoin has been affected, losing more than $700 in the last 11 days.
Early last week, the Chinese government banned Initial Coin Offerings (ICOs) and Bitcoin dipped in value. That bit of information made people jittery and some sold off their Bitcoin for cash.
Several days later, reports say the Chinese government will ban crypto exchanges, and there was another round of selling.
At the moment, the market is fluctuating and Bitcoin price is nowhere near the $5,000 high it attained on the 1st of September.
And although China's biggest 3 exchanges -OKCoin, BTCChina and Huobi- on Monday said they're yet to be contacted officially by the Chinese government on this issue, the market is still volatile.
This turn of events isn't much of a surprise since Bitcoin is a decentralized market, which means it is not under the control of any government. And considering the fact that the market is now worth over $150 billion, governments will want to regulate it, hence the recent crackdown on the crypto world.
Charles Hayter, the founder and CEO of Crypto Compare, a London-based digital currency comparison website, elaborated on this. According to him, more governments will turn the heat up on the market in the future and the Chinese government is just flexing its muscles.
"The Chinese market has been perhaps the most virulently exuberant in terms of its irrational excesses and across the world, regulators are looking to gradually turn up the regulatory heat on this ICO phenomenon", he said in an email to CNBC.
He said the Chinese government isn't that happy about the market's prosperity because they believe it's encouraging money laundering among other things.
"The fears of capital outflows as well as money laundering are causing the Chinese state to ratchet the rhetoric," he said.
He, however, remains bullish, saying these recent events are not enough to crumble the crypto market because China "isn't important" as it accounts for only 20% of the market.
"The recent moves against ICOs rocked the market but have left it relatively unscathed. Examples will doubtless be made – the question is who and when.
The crypto markets realized earlier in the year that China isn't that important as it only accounts for less than 20 percent of volumes – Japan, the US and Korea to an extent are more than enough to sustain healthy volumes. Uncertainty for the time being in China whilst for the rest of the world it's business as usual", he said.
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