China is known for its deep involvement in the cryptocurrency space. In May this year, it was responsible for 80% of the bitcoins mined. Also, during the ICO boom of 2017, 90% of the world’s total bitcoin trading volume came from China. However, recent data suggests that China’s interest in bitcoin is waning.
Baidu’s Search Index for Bitcoin at a New Low
Longhash recently shared a post about Baidu’s search index for Bitcoin. The post shows that Bitcoin searches on the Chinese search engine reached a low of 16,760 on 16th November 2019. Searches for Bitcoin had been at a similar level a month earlier, but they had spiked around the last week of October. The surge in searches maintained itself till the end of October, but then they began declining and eventually reached the low on 16th November.
China’s Volume on LocalBitcoins Also At Its Lowest in 2 Years
Corroborating the theory that China’s interest in Bitcoin is dwindling is the fact that China’s volume on LocalBitcoins recently hit a 2-year low. Bitcoin’s volume for the week beginning 2nd November 2019 was 10,154,664. The last time Bitcoin had experienced such low volume was in February 2018. Even for the week of 16th November 2019, the volume has been modest – 11,281,712.
It can be deduced from all these indicators that China’s interest in Bitcoin seems to have taken a backseat.
But, Why is it Happening?
The most probable reasons for this decline in Chinese interest in Bitcoin are likely to be China’s stance on Bitcoin. In April, the China’s State Macroeconomic Planning Agency was mulling a ban on crypto-mining. However, it recently confirmed that there would be no ban on bitcoin mining.
However, China doesn’t seem to have any plans of embracing Bitcoin any further. In fact, it recently banned Binance and Tron on its largest micro-blogging service Weibo. It banned the official accounts of both the cryptocurrency companies in what appears to be a fresh crackdown on crypto.
China’s state channel, CCTV also released an investigative report on the state of Bitcoin (BTC) and crypto in the country on Nov. 18. Dovey Wan, Founding partner at Primitive Capital, revealed that the report was warning citizens against investing in these “unregulated securities” terming them a “financial fraud and an illegal Ponzi scheme”.
Also, China’s central bank, People’s Bank of China (PBoC), is gearing to launch its own yuan-backed digital currency, which seems to have stolen the spotlight from bitcoin as people eagerly await it.
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