- January 10, 2018
- Category: Bitcoin, Business, Cryptocurrency, Updates
We have all heard of bitcoin and cryptocurrency and there is no denying that this emerging market is one to pay attention to for both first time and experienced investors. That being said, some of the biggest investors in the world are overseas in China. China as a nation has some of the largest bitcoin mines of all countries involved in digital currency, that is they did until late last year.
China’s Actions Last Year
Late last year China announced that they would soon be closing their bitcoin mining operations and that investors had a short time to remove their funds from the exchanges before they closed for good. This was announced in September of 2017 and since it was simply said that the domestic exchanges in china would close, the Global markets were not too heavily affected. It was not until the beginning of 2018, when the markets really did start to shut down, that we saw the effect that one of the largest countries in the world could have on a growing market.
Why Pull Out?
So why did China pull out of the cryptocurrency market? The official statement is that the Chinese government is cracking down on this type of financial venture to help protect the nation and to contain any financial risk that may be present. China, as with many other nations and investors alike, is skeptical that the market is as stable as many claim it is. The goal is to protect their investors from financial ruin and to protect the overall Chinese market until it is proven that bitcoin and cryptocurrency is a stable means of investing.
It is understandable that a market that grew so rapidly would be cause for speculation and that many would be hesitant to invest in such a venture. The main concern is that since bitcoin is essentially stateless, it can be used for illegal ventures that cannot be readily monitored by any agency. Since they are not endorsed by any one agency or any one government, they are not secure and cannot be deemed as true legal digital currencies.
Making Cryptocurrency Safer
China stated that in order for the currency to be safer, it would be necessary to develop legal currencies that were easier to monitor and easier to control. China has laws in place that prohibit the involvement in cryptocurrencies due to their nature and due to the fact that they can be used in illegal investing and illegal ventures.
China is first and foremost concerned with protecting the market and with insuring that it remains stable and viable. As such, the closing of Chinese bitcoin mining operations has affected the market somewhat negatively and many markets did see a drop in the first weeks of 2018. The market is still strong however and investors are not being completely discouraged by China pulling the plug on their bitcoin markets. The growth or decline of the bitcoin and cryptocurrency market can only change over time and at this time, investors continue to invest.