Here’s Why China Cannot Kill Bitcoin

The cryptocurrency market has constantly suffered main assaults from probably the most populous nation on the earth over the previous few months, however the crypto group has not given up, quite the opposite, it adapts very nicely to “Where the water floats, the water will float there” .

China’s large Bitcoin mining ban resulted in a large problem adjustment, with the hashrate dropping by as a lot as 50%, a degree unprecedented in historical past.

Sentiment within the crypto market was broken after Elon Musk introduced that Tesla had stopped accepting Bitcoin funds as a result of miners have been utilizing an excessive amount of soiled power (coal, hydropower) that’s dangerous to the atmosphere. But China’s resolution to ban mining stems from the shortage of electrical energy in addition to the nation’s historical past of bitcoin suppression and has nothing to do with environmental safety, as evidenced by even the mining farms that use clear power (photo voltaic, wind) as nicely pressured to shut.

A number of weeks after the mining ban, China blocked the key phrases Binance, Huobi and OKEx from serps like Baidu and Sogou on June 16. Soon after, Huobi started limiting margin trading, blocking new customers from China and just lately even utilized for the closure of an organization department within the founder’s dwelling nation.

Finally, on June 21, the People’s Bank of China (PBoC) ordered home banks and fee establishments to shut the financial institution accounts of OTC exchanges and even social media accounts of these exchanges. The OTC change mainly acts as a money out gateway to the fiat forex, with out it it could be very tough to transform from bitcoin to money.

As these occasions unfolded, some analysts have been reluctant to explain them as simply meaningless FUD techniques, however in hindsight it seems that China has launched an all-out cyberattack.

The short-term results of those measures are devastating as they drop the price of Bitcoin and lift considerations a couple of potential 51% assault.

Regarding Bitcoin mining and China, I would not consider something you hear. I would not rule out the likelihood that the Chinese Communist Party is making an attempt to orchestrate a 51 % assault on the Bitcoin community. Stay vigilant.

– Danny Diekroeger (@dannydiekroeger) June 25, 2021

“When it comes to Bitcoin and China mining, I don’t believe anything you hear. I wouldn’t rule out the possibility that the Chinese Communist Party is attempting to orchestrate a 51 percent attack on the Bitcoin network. Be careful.”

Regardless of how that affects the market, China’s attack will eventually fail, and this is the main reason for that.

Hashrate recovers to 100 million TH / s

After the Bitcoin network’s hashrate hit an all-time high of 186 million TH / s on May 12, it began to decline. In the first few weeks, mining capacity decreased by around 25% due to restrictions on coal use areas.

However, when the ban extended to other regions, the index hit a two-year low of 85 million TH / s.

Estimated Bitcoin hashrate | Source: Blockchain.com

As the data from the graph above shows, the processing power of the Bitcoin network recovered to 100 million TH / s in less than three weeks. As some miners have already relocated their equipment to Kazakhstan, Canada and the USA.

The P2P market in China remains strong

Although crypto-related companies have been banned in China, individuals continue to act as active intermediaries – one of them recorded over 10,000 successful P2P transactions during the month, according to data from Huobi Global Exchange.

P2P trading on Huobi. Exchange | Screenshots

Huobi, OKEx and Binance both offer a P2P marketplace in China where users can trade a wide variety of cryptocurrencies including stablecoins like USDT, BUSD. After converting fiat money into stablecoins, users can shop on the exchange as usual.

In fact, there is no way to accurately measure the total volume of P2P transactions as the exchanges always hide the real data, not to mention P2P transactions on the black market, especially in the publicly traded Telegram group.

In terms of trading volume, the stock exchanges in Asia continue to dominate

A crackdown on Chinese investors is likely to be reflected in the nationwide exchanges such as Binance, OKEx and Huobi. However, looking at the recent trading volume of these exchanges, they do not appear to have had any significant impact.

Trading volume on the spot market of the stock exchanges | Source: Cryptorank.io

Let’s compare on the graph how the three Asian-based exchanges still dominate, while Coinbase, Kraken and Bitfinex are mainly represented in the US and European markets.

China’s ban on mining and trading in coins can create temporary problems and adversely affect the population Bitcoin price within the quick time period, however in the meanwhile, the community and costs are recovering higher than many anticipated.

Teacher

According to Cointelegraph

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