Last few weeks have been a rollercoaster for crypto investors & traders, a lot has been going on in the market. Here are recent actions which have caused uncertainty in the crypto market.
1. The “Not So Surprising” China Ban
This is not the first time china told the world that they are “Restricting” actions related to Bitcoin or cryptocurrency in general, It happens during every run, & still people get surprised by it.
China’s first major crypto statute came in 2013 when the government recognized bitcoin as virtual property but banned it as a medium of transaction. In 2017, China’s central bank declared initial coin offerings (ICO) illegal, causing bitcoin’s value to temporarily plummet. While the currency’s trade restrictions are reiterated year after year, news of mining bans within several Chinese provinces is the latest cause of concern.
Last month’s announcement of a mining ban in China’s Sichuan province has created an exodus of miners seeking refuge for their hardware overseas. It’s estimated that 90% of the country’s mining capacity will be shut down as a result of the recent bans. The news is significant because Chinese mines power 80% of global cryptocurrency trades.
While mining regulations have brought FUD (fear, uncertainty, and doubt) to the global crypto markets, causing the price of Bitcoin to fall dramatically, many experts remain optimistic as to how Chinese regulation will strengthen bitcoin’s long-term health. Here are 3 reasons why China’s mining ban may not be as bad as it seems.
2. GreyScale Bitcoin Trust Unlock
On 17th July, Grayscale Bitcoin trusts shares worth about 16,000 BTC will unlock. And this could put more pressure on the already weak position of Bitcoin, just above $30k. When investors buy the trust’s shares, they can only sell them after a 6-month lockup period, and this lock-up period is going to end soon. The trust has been operating below premium due to the tumbling prices of cryptocurrency, and this unlock is not going to be a no-show. The price of Bitcoin can take a serious hit, and we might drop to $25k for a brief while.
But we can also note that even though the unlock happens, we might not see a major dump because the trust is below NAV level. This will bring losses for investors, and any thoughtful person might just hold their shares in that case. So, there is a chance that the drop but not be that large, but still, it is best to stay prepared and not make any long trades. Going short during this time will be quite a good idea.
There will definitely be a lot of selling going on, and you might even stay prepared to pick up Bitcoin and others coins at a lower price. Even the analysts from JPMorgan say that the overall signals stay bearish for the unlock.
3.Different countries restricting Binance on Different Levels
Binance being the top exchange & having a monopoly in the crypto market with the lowest fees and exceptional service to provide investors worldwide does affect the market in every aspect.
Binance Restrictions worldwide starting from Canada, Japan, UK & Now Thailand SEC filed a criminal case against Binance. What here is important to notice is that these bans or restrictions are quite irrelevant & temporary. SEC’s case with Binance is about Binance listing stock tokens without a license, which is not related to the market at all.
Likewise, the UK has restricted Binance’s UK subsidiary which is not related to binance.com, which can be used by any UK resident without any problem till date.
Additionally, CoinBase Entering Japan’s Financial Market & Binance getting notice from Japan’s Financial market just after that doesn’t sound like a coincidence.
Summing up, All these restrictions are temporary & are very reversible. These actions are not a coincidence.
These Announcements might bring the prices down a little bit, might be an emotional rollercoaster for you guys, but these actions are temporary and are very obvious after a good crypto bull run, Don’t Panic, And there is a saying in the crypto market which is very popular, Manifest that.
“When The Market is down, Go to the beach”