A fresh crackdown by Chinese authorities on cryptocurrency trading sent bitcoin tumbling on Friday.
But to veteran traders and analysts in the notoriously volatile market, it all seemed like a big bag of déjà vu – the seventh, 100th or “eleventy-seventh” time (in one analyst’s words) that China has cracked down on crypto.
Bitcoin’s price was down about 4% over the past 24 hours to about $42,150. That’s still up from about $29,100 at the start of 2021, for a 45% year-to-date return. That’s more than double the gains in the Standard & Poor’s 500 Index of large stocks.
Here’s what cryptocurrency analysts are saying:
Ulrik K. Lykke, executive director at crypto hedge fund ARK36:
“Yet again, the Chinese government has cracked down on Bitcoin. Since 2013, it has done so at least seven times now – and twice this year already. While each time this happens, the markets react with a price drop, each time the effect is smaller and more short-lived. The ‘China bans Bitcoin’ story has gained almost a meme-like status in the Bitcoin community because of this.”
Haohan Xu, CEO of Apifiny, a digital asset trading and mining network:
“China’s latest move is not surprising given its history of anti-crypto actions. … If China continues to enforce at this magnitude, crypto trading will shift to venues in countries with more stable regulatory environments, which means more predictable liquidity and healthier, more robust trading across the globe.”
George Zarya, CEO at digital-asset prime brokerage and exchange Bequant:
“For the institutional crypto industry it won’t change much, as those who could leave already left, and those who couldn’t have either closed or gone under the radar. The retail market most likely has gone under the radar and will continue to support market volumes.”
Anthony Pompliano, investor at Pomp Investments:
“It would seem like a negative thing to have China ban bitcoin and cryptocurrencies, but the market barely cares after the 100th time.”
Mati Greenspan, founder of Quantum Economics:
“China bans bitcoin. This must be the eleventy-seventh time they’ve done this. Anybody still using bitcoin there is already underground, so now they’re a criminal too. Big whoop.”
Craig Erlam, senior markets analyst, Oanda:
“China’s opposition to cryptocurrencies is nothing new but the latest clarification would suggest those involved are at risk of prosecution. China’s actions haven’t held back cryptos rise too much in the past so I wouldn’t be surprised to see it bounce back once more.”
Fundstrat, an independent investment research firm:
“While we are witnessing an immediate sell-off, there does appear to be buying support coming online as market participants digest the information.”
Freddie Williams, sales trader at GlobalBlock:
“We’ve seen little in the way of knee-jerk reaction from clients surrounding this news from China. We’ve also seen this before from China, where news of bans have been reported over the years, but it has not prevented adoption of bitcoin and digital assets from continuing their upward trend.”