Why China’s Interest in Blockchain Will Ultimately Be Bad For Crypto

Tony "The Bull" Severino

5 years ago

3 mins read

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Last week, Chinese President Xi Jinping gave a speech where he praised the blockchain technology many crypto assets are built on and urged his country to ensure it is at the forefront of future developments in the space.

Bitcoin and other Chinese altcoins pumped on the news, with Bitcoin setting it’s third-largest one day gain in the crypto asset’s history. However, news that China is entering the blockchain arena may ultimately spell bad news for cryptocurrencies like Bitcoin and others.

China’s Nod of Support For Blockchain Causes Crypto Markets To Surge

Bitcoin started the week trading at a low of $7,300, but following news that Chinese President Xi Jinping spoke out in support of blockchain – the technology underpinning Bitcoin and many other crypto assets – Bitcoin price spiked over 40% setting its third-largest one day gain in the asset’s short history.

In the following days, other Chinese altcoins also pumped, with Tron, NEO, and VeChain all rising by over 30%. Bytom, another Chinese crypto project, pumped over 300% from low to high before retracing.

Why Chinese Support of Blockchain Is Bad for Bitcoin

Pundits of cryptocurrencies argue that it’s blockchain, not Bitcoin, that is the truly transformative technology. It’s worth noting, that Chinese President Xi Jinping’s comments were in support of blockchain, and not cryptocurrencies.

Given China’s track record for censorship and control, the country has little motivation or reason to bring Bitcoin or other existing, decentralized cryptocurrencies into its financial landscape, and The People’s Bank of China is instead focusing on the development of what is being called DCEP or digital currency electronic payment.

🇨🇳 BREAKING: China to launch digital currency “DCEP”

According to this video (to be confirmed), Chinese Central Bank will launch digital currency called DCEP. To be tested and onboarded with commercial banks first.

More on this story soon. pic.twitter.com/OqRwN272iv

— Block Journal (@blockjournal) October 28, 2019

Following Xi’s statements this week, it was revealed at the Inaugural Bund Financial Summit of 2019 in Shanghai that after 5-6 years of development, China’s central bank would soon launch DCEP, with the digital currency first being tested and rolled out with commercial banks in the region.

China’s motivations are clear when it comes to blockchain: they plan to utilize the technology to develop their own, censorable digital currency, likely to further tighten the strict control over the country’s citizens.

Once China’s DCEP is fully deployed, more stringent control over crypto assets could soon follow to ensure there’s no opposition to the digital currency. China has already taken major steps to censor the internet as a means to control the flow of information from reaching its citizens.

China also plans to introduce a social credit system in the future that assigns a score to citizens depending on their online and real life behaviors. The DCEP could be intertwined with the country’s social credit system, and internet censorship, and the country could theoretically penalize behaviors through their finances as a result.

So while crypto investors high on the recent pump may be signing the praises of China for their support of blockchain, that support may ultimately be a negative thing for the overall crypto space.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.