Bitcoin Survived China’s Initiatives against Digital Currencies. Not that long ago, China was on the offensive against digital currencies. China banned Initial Coin Offerings that many startup companies from that country as well as other well established companies were using in order to raise funds for their business. Yet, China did not stop there. Just a couple of days later Chinese media reported that the country was planning to ban digital currencies completely.
When that news broke, most people assumed Bitcoin and other digital currencies would lose a lot of their value. Initially that turned out to be true. In the first couple of days after that, the value of Bitcoin started dropping, which continued in the following days. Seven days after the news, the value of Bitcoin went down to $3,000 mark. At that time, the Chief Executive Officer of J.P. Morgan and Chase, Jamie Dimon, spoke at the conference and said that Bitcoin and the entire market of digital currencies is one huge fraud.
He also insists that the whole digital currency market is a bubble and that it will collapse at some time in the future and that would leave a lot of people in serious problems. The biggest problem that Jamie Dimon has with Bitcoin seems to be the fact that the entire market is speculative. That criticism drove the value of Bitcoin to drop even further. Just a couple of hours after Jamie Dimon’s speech, the value of Bitcoin dropped below $3,000 which was the lowest level that this digital currency had had in several months.
At that moment, many believed it might be the end of Bitcoin. However, this is not the first time that Bitcoin and other digital currencies face significant drop in value. But each time it happened, the value of those digital currencies managed to rise up. Though after series of attacks first from China and then from Dimon, there were very few people who believed that Bitcoin might recover to its previous level.
But on the contrary the rate of Bitcoin started to rise after only seven days and within just three or four days, its value was again coming close to $4,000. Last week started very well for Bitcoin and other digital currencies as the trend of the rise continued that week as well. On Wednesday, Bitcoin already reached the value of $4,700 which was very close to the value that Bitcoin had had before the initiatives from China and Jamie Dimon’s speech.
According to many experts, the fact that Bitcoin recovered in such a record breaking time indicates that Bitcoin has become too big and too powerful to eliminate. In other circumstances, the news from China would devastate any other asset but Bitcoin proved to be too resilient for those attacks to have huge effects. This means that established financial institutions will have another reason to worry as Bitcoin has shown that there is almost nothing that could stop Bitcoin from gaining even bigger popularity.
Written by Vedran Ostojic
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