By Alicia Maher
China’s distaste for cryptocurrencies is acknowledged globally. The Asian giant issued a ban on cryptocurrencies again last week, drawing a few reactions. Industry experts believe the ban could give the US an edge over its longstanding rival. However, the almost passive stance of US authorities on cryptocurrencies could see it lose this edge, experts argue.
Ironically, China’s latest ban did not spark mixed reactions as expected. The order against crypto usage is reportedly the country’s 19th ban after a series of prohibition orders since 2009. Businesses most affected by the latest ban are crypto exchanges. Leading crypto exchanges Huobi and Binance announced the closure of operations earlier this week at different intervals.
China Latest Crypto Ban Affects Crypto Exchanges and Mining Pools
The ban has also taken a toll on the operations of crypto mining pools including the second-largest Ether miner, SparkPool. SparkPool announced recently that it was quitting its mining activities both in China and other regions. Huobi Bitcoin miners also transferred 100,000 BTC valued at $4.21 billion on Tuesday, which according to reports, was meant to offset the withdrawal requests of Chinese investors and traders who were transferring their crypto assets to cold wallets following the ban.
Whether the US will utilize the opportunities that China mining and crypto ban has presented is something experts and observers have considered. And the answer seems to be in the negative given the hostile regulatory approach US authorities have adopted in treating cryptocurrencies. American VC and president of Thiel Foundation Blake Masters stated that he expects the US to take an exactly opposite approach to China’s ban.
It is more likely that regulators will remain resolute with their hostile crypto stance. Yet, US individuals will pick up the gauntlet from where China left it off, experts argued. They also added that the number of Bitcoin investors in the US will double. This will happen irrespective of the US government’s unfavorable disposition toward private digital currencies including stablecoins.
US States Also Have Advantage, Experts Note
US States could also take a cue from this by accumulating Bitcoin and storing it in their reserves. Experts stated that this is more preferable than if the head government were to do so. They revealed that they wanted to expand the influence of US states. Certain states particularly Texas are already living up to the expectations and utilizing the numerous opportunities that have surfaced. Texas received several Chinese Bitcoin miners in the wake of a mining ban due to its cheap nuclear energy.
Drawing from the latter point, the concerns surrounding China’s dominance in Bitcoin mining hash rate have now been allayed. Following the mining ban, China’s share of the hash rate plunged 75% to 46%, leading to a respective increase in the share of the regions where mining operations are ongoing.
There are a plethora of opportunities that have resulted from China’s multiple crypto bans, which Americans are trying to utilize. As such, the only Jupiter that could stop the adoption is a prohibitive order from the US government, perhaps in the form of taxes and other regulations. Experts hope that the ship of adoption would have sailed long before the introduction of such regulations.
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