Bitcoin prices reached another record high during trading this weekend following news that China may rescind its ban on cryptocurrencies. Buoyed by positive sentiment from the People’s Republic, Bitcoin rose to a new high of just over $6,300, beating its previous high of $6,050 around a week ago.
A number of regulations and policies were examined at the 19th National Congress of the Communist Party of China. Among them was the decision to ban cryptocurrencies which caused Bitcoin to lose 25% of its value and drop to around $3,500 last month. Reports indicated that some of these ‘temporary policies and regulations’ were to be canceled, including crypto trading.
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Adding to this news was a report claiming that a new Chinese cryptocurrency platform, zb.com, would be up and running by November 1st and users could open accounts and begin deposits now. At the time of writing, however, the website was inaccessible.
It is not clear who is behind the new platform but many have speculated that it is the Chinese government. This would be one way to allow but regulate crypto trading for the mainland. The government originally banned ICOs in September and followed it up with a general ban on crypto exchanges. This caused the largest decline in Bitcoin price this year.
Conversely when good news comes out of China, even if a lot of it is rumor at the moment, the market reacts and Bitcoin is on an upward roll again. Following the initial announcements, Bitcoin recovered strongly as investors wanted to take advantage of the promise of Bitcoin Gold following the recent fork. The recent news has pushed prices even higher as Bitcoin strives to reach a crucial $6,500 level.
Even when cryptocurrencies are banned Chinese investors find ways to trade them. Many have turned to offline trading through platforms like Taobao – China’s version of eBay, and a number of chat groups. If the news turns out to be true we can expect stronger upward movement of Bitcoin prices in the near term as global demand is boosted. With most Chinese exchanges being closed it will take time for the market to re-establish itself in the country thought the move will be a positive one for all Bitcoin investors.
As is the case in Vietnam and Russia, the governments of Asia want to regulate and control financial transactions with cryptocurrency. It is only a matter of time before the west decides to emulate them.