For nearly a month, rumors surrounding China’s alleged bitcoin regulations have been running rampant. Earlier in November, bitcoin actually underwent a serious financial dump, falling by nearly $40 overnight as the rumors swelled to ridiculous proportions. Now, it appears those rumors are coming true, and investors are wondering which direction bitcoin will sway.
China’s state council is imposing stricter regulations for businesses that invest abroad. While this isn’t the full-on legislative map reported earlier, the move is likely to bear some consequences on the overall price and on the way digital currency companies do business. China’s influence on bitcoin has been staggering. This can be a good thing or a bad thing, depending on the events that occur. If the yuan drops and Chinese investors look to bitcoin to stabilize their assets, the price goes up and everybody’s happy. When something negative occurs, like the early month rumors or the Bitfinex hack, the price can fall within minutes.
No doubt, investors are scared about what could happen. Will China’s international limitations on bitcoin businesses have negative effects on the price, or will things remain as they are?
The good news is that Chinese regulators were originally moving in the direction of general limitations, like what’s seen in Russia. While this doesn’t seem to be the case just yet, investors want to be prepared, and everyone is warned of the hard wind that could knock the bitcoin price down a few levels. Already, bitcoin has dropped to $733 at press time after a healthy period of hanging in the $740s. Could China’s decision have something to do with this? There’s no way to fully prove it yet, but the cycle is already beginning.
So if you invest in bitcoin and you don’t want your assets to be hit hard, now is the time to act.