A few months back, China shocked the crypto world when they decided to basically ban cryptocurrency.
At first they banned ICOs. Then they went a step further and shut down all cryptocurrency exchanges.
In effect, crypto had been outlawed in China.
Though that didn’t really stop it as most of it’s investors went over to Hong Kong as well as a couple other nearby places and started trading over there.
What was so surprising was what happened to the crypto markets when this happened.
At first Bitcoin plummeted by about 50% when the news trickled came out.
The rest of the crypto markets felt the pain even worse, with some coins falling by 70% or more.
However, what happened next was pretty shocking. Over the next couple weeks prices recovered and eventually made new highs.
This was because China was no longer the crypto powerhouse it had been a few years prior, and it hadn’t been for some time.
Did markets see this move coming ahead of time and adjusted accordingly?
However, other countries like Japan had been much more accommodating towards cryptocurrency in recent years and much of the crypto markets had already made their way over there.
The result was that bitcoin and cryptocurrencies didn’t miss too much of a beat from the news as much of the heavy lifting as been coming from Japan, the United States, and South Korea.
However, keeping all that in mind, it can’t be denied that there is a large opportunity missed by not having China involved in this market.
1.4 billion missed opportunity to be precise.
China currently has roughly 1.4 billion people and many of them do not have access to cryptocurrencies, even if they wanted to participate in them.
Imagine the kinds of volumes a country like that might bring were they to start getting involved in the space in a meaningful way.
Now that all that bad news is already priced in, what might happen if China were to say, reverse their stance on bitcoin and cryptocurrency?
There have been several leaks from the region over the past few months indicating that the ban was never intended to be permanent.
Instead it was meant to help the government get in-front of these things and properly regulate and license the exchanges before it got “too out of hand.”
Bobby Lee went on CNBC yesterday and shared those same thoughts.
A couple quotes from his interview can be read here:
“In this world, nothing is ever permanent.”
“One day I think it’s possible they’ll lift the ban, so called, and they might reinstitute it and license it.”
“Frankly speaking, I don’t know what kind of time frame that is, whether it’s a few months, a few years or even a few decades, so it’s hard to tell.”
Lee wouldn’t say for sure when he thought that might happen but his point was that at some point he wouldn’t be surprised to see the ban reversed.
When/if that happens, what do you think that might do to the prices of cryptocurrencies?
I have a couple guesses…