How are investors affected by China’s moves against cryptocurrencies?

The cryptocurrency market was hit on Friday, after the People’s Bank of China confirmed its continued crackdown on the sector, preventing crypto companies from dealing with clients from mainland China.

The People’s Bank of China has declared that all crypto-related activities are illegal in China, including services such as offering digital asset trading and clearing, and issuing digital assets and products. derivatives. He added that offshore cryptocurrency exchanges offering services in mainland China are also illegal.

“This is the 20th time that China has banned bitcoin,” said Meltom DeMirrors, chief strategy officer at CoinShares. But each time he looks different.

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He added that it would be very difficult for a government to effectively ban Bitcoin due to its determination. “And I don’t think even the concerted efforts of different countries and different central banks can block bitcoin. I don’t think that’s technically feasible either. But there are ways to regulate bitcoin.”

It comes as China has been targeting bitcoin since 2013, has banned financial institutions from processing bitcoin transactions, and over the years has renewed its crackdown on the cryptocurrency market.

CoinShares chief researcher Chris Bendixen justified China’s crackdown on Bitcoin as the exact opposite of their centralized currency control system.

Earlier this year, China announced new measures to shut down cryptocurrency mining platforms that process and verify crypto transactions, and reaffirmed its ban on Chinese financial institutions that provide crypto-related services. cash.

This time, Demirors argued, the Chinese government is likely to be motivated by the development of the digital yuan and the central bank’s digital currency.

“You can ban something once, and you’re done, but every ban after that is an admission that you can’t ban it at all,” Demirors said.

The price of bitcoin fell 4% in 24 hours, following the Chinese central bank’s response to questions about cryptocurrencies, but the cryptocurrency has continued to decline over the past 24 hours, by 1.28 %, to trade at $ 41,532, according to CoinMarketCap. Ethereum, up to $ 2,780, has fallen 19.19% in the past 7 days.

Twitter revealed

The Chinese crackdown came a day after Twitter announced that its 330 million active users would soon be able to send bitcoin to each other instantly and at near zero cost, using the Lightning Network built on the core bitcoin network.

Twitter began integrating the Strike Bitcoin Lightning wallet into its platform last week, allowing users to send and receive bitcoin as easily as tweets.

Bitcoin critics have argued for years that the cryptocurrency cannot be scaled for mass adoption due to its high costs and slow processing times. The average Bitcoin core network transaction typically costs around $ 8 and takes around 20 minutes to complete, although fees and times vary depending on network demand.

Lightning solves this problem by processing off-chain transactions through a secondary layer that can, in theory, handle millions of payments per second.

As Jack Mallers, Founder and CEO of Strike, explained in a Twitter video announcing the launch, “We just pushed a free instant transfer, from Chicago, US, to San Salvador, El Salvador via Twitter.

China, no doubt, is concerned about bitcoin – but not because of money laundering, phishing, or economic destabilization.

China is concerned that Bitcoin gives its citizens the freedom to instantly move their wealth around the world with the click of a button, which bypasses the arbitrary capital restrictions Beijing provides.