قالب وردپرس درنا توس
Home / Business / Did China really cause this week's Bitcoin bull market?

Did China really cause this week's Bitcoin bull market?



Bitcoin's price rose 22 percent on Friday and speculation of the reason behind the wave has centered on various causes: recent legal trips over to Bitfinex short clamps and an announcement by Chinese President Xi Jinping on Friday that the country would bet heavily on Bitcoin's underlying technology, blockchain.

Let's consider the latter: Could Chinese signaling have caused the wave?

The arguments in favor range from speculative to silly.

On Saturday, Anthony Pompliano tweeted one of the founders of the Morgan Creek Digital cryptocurrency index fund (on President Trump, no less) that China was planning to buy… all ”of the 21 million bitcoins. which will eventually be in circulation, of which 18 million have so far been designated. "This is going to be the real US-China competition," he wrote. "That should make [Trump] take into account. The guy hates to lose and will try to buy them all. ”

Oh, boy! Better to buy up all bitcoin before Xi catches it all up!

Be the first to get Decrypt Members. A new type of account built on the blockchain.

China's crypto conundrum

The notion that China buys all Bitcoin is pretty ridiculous. Yes, much of the world's bitcoin mining is done in the country, so there is and always has been a local, vested interest. And yes, a Chinese court recently stated that Bitcoin is private property and enjoys the same legal protection as any other asset.

And yet, at the same time, the regime has tried to knock down at these mining yards, and last year banned Bitcoin trading altogether. At the same time, it has developed its own cryptocurrency a stable coin bound to yuan, for a better part of two years.

Bitcoin is a competitor. China will do what it has always done since the mid-20th century: It will build its own cryptocurrency. In fact, it has said just as much . Wake up, get!

"China is not going to suddenly become friendly to bitcoin," Nic Carter, a partner in Castle Island Ventures, told Decrypt . "They've become more hostile lately."

Trading Sites

Of course, it is possible that Bitcoin traders may have become excited after Xi's announcement. The pump took place around 13 UTC, just as traders in Asia began to wake up. And Chinese investor Dovey Wan pointed out on Twitter searching for "blockchain" on WeChat, the hugely popular Chinese messaging app, spiked by several sizing orders before the rally. Could Xi's kind of confidence vote for blockchain technology send traders into a secret frenzy?

"There are probably traders who react to it to some degree," Carter speculated. “But the size of the move was shocking. We would need something cataclysmic to explain a move that is so important. "

Remember that Xi never explicitly mentioned Bitcoin – he just mentioned" blockchain. "His regime has long researched the technology as a better way to investigate its citizens not as a way for the masses to buy Oxy, or their offshore money.

Carter reckons the pump was due to a smaller fund that liquidated – or recently joined the thinly-traded bitcoin market – which caused a short influx of money that would have triggered the larger rally. And over derivatives that swap BitMEX, many card sellers – traders who bet on bitcoin – actually liquidated. That means they had to cross to cover their bets, which increased the price of BTC.

The Crypto Capital connection

There is also another possibility, although it is also backed up by largely circumstantial evidence: Bitfinex, the big central in the heart of an investigation by the New York Attorney General, ran into new legal trouble late Thursday when the president of his former payment processor, Crypto Capital, became a arrested in Poland and indicted on three criminal cases by the United States Attorney for the Southern District of New York.

As cryptocurrency Preston Byrne pointed out in his blog that relationships often fit bad news for Bitfinex: The exchange is administered by the same people as Tether, who controls the issuance of the dollar-bound stablecoin USDT, which is popular among traders and whose volume increased by half a billion when Bitcoin jumped from $ 7,500 to $ 9,500. The theory is that Bitfinex insanely pushes tethers to pump Bitcoin up, to fund the impending exit. (The stock exchange denies this.)

But even that theory, probably, can go back to China. Prosperous Chinese traders reportedly have to hoard tethers for their useful parity with the dollar (though they do not necessarily trade it for Bitcoin). Maybe they were paid, highlighted by Xi's proclamation and disturbed by Bitfinex's alleged criminal relations?

Or maybe President Xi just bought a dip.


Source link