Crypto experts: China’s crackdown may be ‘great news for Bitcoin’

    28 Sep 2021

    Bitcoin may benefit from China’s recent ban of all cryptocurrency transactions, according to crypto experts.

    “This is great news for Bitcoin,” said Ross Gerber, Gerber Kawasaki Wealth & Investment Management CEO. “The last thing we want is China to be involved in a currency of the world.”

    Bitcoin price fell about 6% after China announced the decision on Friday, as the world’s most populous country accommodates much of Bitcoin’s mining activity, according to University of Cambridge data.

    “The real issue is about control, and what governments don’t like is that Bitcoin takes control of people’s monetary futures away from governments and places it in the hands of individuals,” Gerber said. “And that’s exactly what’s happening… globally, right now.”

    But China’s crypto crackdown isn’t new.

    “This has to be the 20th time that China has banned Bitcoin,” Meltem Demirors, chief strategy officer at CoinShares, told CNBC Make It. “There’s always something ‘different’ about the bans, but this happens all the time and it’s never really dramatic in the larger scheme of things.”

    And it would be quite difficult for any government to effectively ban Bitcoin due to its design, James Ledbetter, an editor of fintech newsletter FIN and a CNBC contributor, previously told CNBC.

    “I don’t think even a concerted effort among different countries and different central banks could actually shut down Bitcoin,” Ledbetter said. “I don’t think that’s technologically possible. But there are ways that Bitcoin could be regulated.”

    So though each similar announcement from China causes an initial drop in the market, U.S. investors shouldn’t worry much – in fact, they should worry more about the potential fallout from U.S. regulation of cryptocurrency, experts in the space say.

    The main repercussion from China’s crypto crackdowns for U.S. investors is that “it could impact market volatility for investors,” says John Wu, president of Ava Labs, a team supporting development of the Avalanche blockchain.

    He notes that depending on the approach, regulation could potentially drive innovation in the crypto industry out of the U.S.

    “Just as we’ve seen with Bitcoin miners fleeing China and heading to the U.S. in states like Texas and Wyoming, crypto start-ups will flood to crypto-friendly states and countries,” Wu says. “Taking reasonable, well-considered measures is a huge opportunity for the U.S. to be a haven for the future of crypto, and entrench itself as a hub for the global economy in the decades ahead.”

    Senator Pat Toomey (R-PA) tweeted that the U.S. would have significantly more room to make developments in the establishment of an infrastructure for cryptocurrency with China’s new ban taking effect.

    “China’s authoritarian crackdown on crypto, including Bitcoin, is a big opportunity for the U.S.,” Senator Toomey wrote in a tweet. “It’s also a reminder of our huge structural advantage over China.”

    For private investors, Bitcoin still represents a relatively small asset class. As it further develops, it could become a greater force in the global financial system, CEO Gerber said.

    “Even a 1% allocation to Bitcoin for the average investor would bring Bitcoin up probably 5x or 10x,” Gerber said. China’s decision effectively “isolates themselves from what will be the future monetary system,” he added.

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