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China ban Crypto Currency Transaction, What does that mean!

Updated: Dec 6, 2021

China has a long history of banning foreign technology from YouTube, Facebook, Google, Wikipedia, and Bitcoin

China declares all crypto-currency transactions illegal and markets go crazy. Bitcoin price dropped $5,000 dollars in a matter of minutes as well as the market cap which was at close to $2 Trillion dollars to $1.88 trillion.

The drop will not only affect the prices of coins and currencies it will go beyond that to bring down any company that is affiliated and related with it, companies like Robinhood, Coinbase …etc.

China banning crypto is no news for anyone who follows crypto updates and news, they announced the ban several times in the past decade, and last ban was on Bitcoin mining in May 2021, which caused a price drop followed by a period of steady recovery until the new updates regarding the new ban.

Why did China ban cryptocurrency transactions?

A lot of theories emerged on why did China ban crypto and most importantly how will they enforce the ban, given the fact that crypto holders do not hold crypto currencies in their bank accounts.

1) Governments cannot control Crypto. While some countries allow or pretend to allow free commerce and embrace privacy, other countries enforce authority through the control of different aspects of life.

2) Investors and opportunists. Experts believe that this move is exaggerated and can benefit investors:

Chinese investors, who know that this news will manipulate the price and drive it down which will allow them to buy the dip.

Other investors, who know that this news will cause panic and panic selling which will drive the price down allowing them to buy at a cheaper price. Experts who believe that this is the case is because they find China banning crypto is not news worthy and the media exaggerated the news causing panic among trader and investors.

3) China preparing to launch their own central bank digital currency and they want no competition

How to minimize the impact of the Crypto ban?

The newest China crypto is a wakeup call and a good reminder for all of us to be more careful, vigilant and smart about our investments and always diversify our portfolio.

Crypto currency is a relatively new concept with rules and regulations created recently with minimal to government control over, and that will eventually come to an end. Not the end of crypto of course but the crypto universe we know right now.

The crypto currency world is extremely volatile, to the extent that some experts call it a Ponzi or a pyramid scheme because there is no actual value for Bitcoin and profit can only be made by the money others loose. Also, a single piece of news can cause a huge dip and cause panic.

The big question is what is the USA government decided to do the same?

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