In October, Bitcoin made a quick run past the $10,000 barrier before just as quickly crashing below that mark. Could China’s mandarin Santa be behind the run-up?
Back in September, 2017, China banned ICOs (Initial Coin Offerings) as presenting both a financial and fraud risk. The government showed it was serious about the ban after it arrested team leaders at PlusToken, charging them with scamming investors out of $3 billion. The cryptocurrency traders in China got the message and quickly moved operations out of mainland China to friendlier sites in Japan, Singapore and Malta.
The government claims that cryptocurrency trading with China’s yuan has dropped from 90 percent to an astounding one percent. This does not, though, take into account the shift to over-the-counter (OTC) markets to continue crypto trading, thus avoiding cryptocurrency exchanges. The OTC marketplaces act as a platform that allows traders to find buyers and sellers outside of exchanges that previously helped bitcoin holders facilitate trades.
By using mobile payment alternatives, traders can buy and sell cryptocurrencies via peer-to-peer OTC trading. Groups like Houbi OTC have reportedly traded more than $100 million USD in volume.
Spanking Jiang Jie’s ICO
In 2018, under the excuse of preventing financial risks, the mandarins upped the ban game by attempting to block all websites offering bitcoin trading and ICOs.
Hong Kong’s South China Morning Post reported that hopping mad ICO investors physically carried Jiang Jie, founder of an ICO named ARTS, to the Beijing financial bureau for punishment after the value of the ART’s ICO collapsed from 0.66 yuan to 0.13 yuan in about 10 days.
Jiang Jie didn’t go quietly, and made his case for innocence by proclaiming “Ski Ba Bop Ba Dop Bop!”
I’m a Scatman
Why should we be pleasin’ all the politician heathens
Who would try to change the seasons if they could
The state of the condition insults my intuitions
And it only makes me crazy and my heart like wood
The spanking of Jiang precipitated the cancellation of all cryptocurrency ads on search engine Baidu. Ads were also pulled from Weibo, the mandarin’s approved social media site.
Li Lihui, a former Bank of China president, warned that Chinese regulators would squash any types of financial innovations if they threatened “the interests of consumers and stability of the financial market.” Innovations included digital finance, smart finance and blockchain finance. The warning from Li Lihui can probably to interpreted to mean that the mandarins see cryptocurrencies as a threat to their financial positions.
President Just Kidding, Capitalist Running Dogs
In October, 2019, in order to add more chaos into the bitcoin trading market, the mandarins apparently did an about face and announced that China loves blockchain. One of the reigning head mandarins, China President Xi Jinping, announced that blockchain development was critical for China’s ambitions. The President encouraged China’s proletariat to get hopping and develop, develop, develop.
Some believe that the endorsement of blockchain, the technology that drives bitcoin, was also a backhand endorsement of cryptocurrencies by China.
Bitcoin, mired in pessimistic muck for months, suddenly got an injection of mandarin juice and briefly shot up above $10,000 at the end of October.
The Chinese sock puppet media told everyone to cool it, that the Chinese president was only singing the praises of blockchain, not bitcoins. The People’s Daily ran a somber crawlspace message all day on TV that stated: “President just kidding, capitalist dogs. Early April fool’s day.”
Mandarin Santa Has Arrived
Those who misinterpreted the Chinese president’s cheerleading for blockchain as support for cryptocurrency certainly got a wild ride. Some traders seem to be hoping that the Chinese would embrace bitcoins. Some misinterpreted the blockchain endorsement as a signal for Bitcoin to hit $100,000. It would have been a nice Christmas present.
Maybe the Chinese president has a pocketful of Bitcoins and needed a few extra grand to buy Christmas presents for his politburo buddies. And announcing blockchain love was enough to spike the price of Bitcoin up a few grand.
So, bitcoin trading in China is a mess. Traders have scattered to avoid mandarin punishments. New trading centers are popping up. The price of Bitcoin is bouncing up and down. And in Tianamen Square, Mandarin Santa has arrived. The ruling class is strutting about in newly unwrapped Dolche & Gabbana suits and swilling fifths of Hennessy XO. Merry Christmas to all, bitcoin travelers, and to all a good night. Ho, ho, ho.