The recent wave of crypto crackdown in China has been met with heightened volatility across the market. However, not all investors have backed away from this market out of fear because some are still increasing their crypto holdings.
Crypto Crackdown in China
Last Friday, when the People’s Bank of China declared that crypto transactions were illegal, Bitcoin dipped to around $42K, and the coin is still trading at these levels after being rejected at higher levels.
The PBoC also stated that it was cracking down on loopholes used by Chinese traders who access cryptocurrencies using offshore exchange accounts. By doing this, the regulator would impose a permanent ban on digital assets and make them inaccessible in the country.
Exchanges such as Binance and Huobi have already stopped the registration of new users on the platform. Huobi has also stated that existing users will be barred from the exchange by the end of 2021. However, these exchanges are still operating in Hong Kong.
Some Traders Remain Undeterred
While the new rules could deter the entry of new traders into the market, it has presented an ideal buy opportunity from veteran traders, especially those who have weathered such crackdowns in the past. The recent price dips have led to veteran traders increasing their holdings, which could help them acquire phenomenal profits when the prices rise in future.
Some experts believe that Friday’s announcement showed that the FUD related to these events was dying down, which could be why major dips were avoided on this day. Other experts have also stated that regulatory crackdowns are now common in the crypto sphere.
Traders in China are also still buying cryptocurrencies using centralized and over-the-counter exchanges. Leading exchanges such as OKEx are still operating in the country, which presents an ideal platform for those who want to accumulate more holdings at low prices. The MetaMask digital wallet is also being used to purchase and sell digital currencies and non-fungible tokens.
However, not everyone is buying during the dip because new traders are still fearful of the occurrences in the market. Mining pools in China are shutting down, which has triggered a wave of anxiety in the sector.
Some analysts have stated that despite the Chinese government imposing a ban on crypto transactions, it will be almost impossible to prevent people from holding digital assets. Due to this, the Chinese government could fail to introduce such a measure.
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