Recently China ( again ) flexed its political muscle and cracked down on cryptocurrencies - on their Bitcoin exchanges, not the coin itself. Predictably and without skipping a heart beat, the cryptocurrency community pumped out "communist oppression" blog posts and filled the internet with one-sided hysteria. To the point that it ( again ) became really hard to find any good reads by crypto experts on what may be gong on.
If you remove the "communist" label from the news item ( and your thinking ) and take a look at what China is doing, you may see something different from "harsh authoritarian rule" with their latest market move. And it is a move, not a permanent clamp down. It ain't forever and ever as many knee-jerk analysts would have you believe. If I read this move correctly, it is a signal for what may be the sharpest upturn in cryptocurrencies to come later.
Follow the bread crumbs, people. China is no dummy when it come to strategy. China plays a "long game" and other than a few ghost cities ( which make sense in a near zero interest rate climate ), China plays a steady and quiet hand at the game of world finance poker.
Personally, I think the latest clamp down signals a couple things.
- Digital Assets & the Law - On the obvious side of things, China is creating new laws for handling all forms of digital assets. I use the term "digital asset" and not digital currency because China regards all digital property, not just the coins, as an asset. Many mistakenly think that China does not regard cryptocurrency as a "real currency" whereas in actual fact, China is setting up a broader system to handle and regulate any form of future digital asset. Money, property, you name it.
China is one of the thought leaders when it comes to the ( scary ) new world of "digital home ownership" and digitizing every possible asset you can hold. Google that one some time. - The New Silk Road - The stopping point her for many on this clampdown is the "law" part. Many conspiracy thinkers do not see the actual system being put in place to handle a large scale trade as the one sown in the map above. The new silk road they are setting up with trade partners that notably excludes the USA, Australia and eyes Europe as a buyer of energy and goods, not a seller. Do you really think that are setting up shop and not going to include digital currency? You betcha they aren't. You can guarantee that China will come up with their own cryptocurrency, a "digital gold bar", and not use Bitcoin.
- Centralized Government - Love it or hate it, a centralized form of government has a big advantage. While western nations are sleeping at the wheel when it comes to Bitcoin and western banks are using denial as their current strategy to it, China is forging ahead and I believe, taking a measured approach to its banking and trade system. Clamping down may mean a tight fist. But it also may mean a strategy to slowly introduce cryptocurrency into their market, at a time they set. When all systems are in place to handle it, China will do an "about face" on policy and western countries will be floudering when China and BRICS cohorts are cleaning up.
All speculation I must admit because China keeps their cards very tight to their chest. But looking at the map above, it only takes two brain cells to realize that China are about more than the digital currency aspect of the blockchain technologies. China is setting up the worlds biggest shop. And you can bet they are making sure they are an indispensable part of it.
Call it communist rule or call it smart. The thing to note is that China ( et partners ) won't have to use political, military or even financial might to win the game. They will simply collect the money left on the table by countries slow to the bitcoin trading table.
...and what? Did the post get cut off? :(
Here's a rewrite. From what I can remember.
Holy cow, yes it did. I lost about 2/3. Will repost.
It happens. I always copy and paste my entire post before finishing it just to be sure. I've had it happen to me, and it has happened to many of my friends.
Thanks!