Bitcoin’s value received another hard blow, after the announcement that the Chinese government has just banned online bitcoin ads. Chinese authorities are reportedly concerned that cryptocurrencies and cryptocurrency fundraising (or ICOs) may pose serious ‘financial risks’.
Bitcoin’s value currently stands at $7,830 after falling from $20,000 per unit last year.
China has taken serious steps against cryptocurrencies. Earlier this month, it banned local exchanges for virtual coins and initial coin offerings (ICOs) nationwide. Residents were able to bypass the ban by trading their cryptocurrencies on foreign exchanges. Some companies moved to Hong Kong to escape the restrictions.
However, after the ban on bitcoin ads, Beijing is reportedly preparing a full-blown ban on foreign exchanges as well, which will make it impossible for most Chinese residents to sell or purchase bitcoins or other virtual currencies.
The People’s Bank of China said for a local newspaper that the moves are necessary to “prevent financial risks”. The Chinese government is reportedly poised to ban onshore and offshore exchanges as well as ICOs.
China’s Bans Could Push Global Markets into Free Fall
After China banned local exchanges people kept trading their coins on virtual currency exchanges located din other countries. ICOs have also maintained their popularity in China. Many people accessed oversea platforms to continue transactions.
But if Beijing bans foreign exchanges as well, it could severely destabilize the world’s cryptocurrency markets since it could bar more than 1 billion people from accessing those markets virtually overnight. Plus, the markets are already highly volatile and unregulated, with many people facing the risk of a disastrous financial ruin.
In January, experts estimated that the losses in the bitcoin value have been a mere “bloodbath”. For this month, analysts expect a real “horror show” caused by the bans in South Korea and now China. In addition, Facebook has recently pledged to ban cryptocurrency ads across the entire platform.
Image Source: Pixabay
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