China Crackdown on Bitcoin May Be A Positive

A new report by Bloomberg Intelligence (BI) says that China’s antagonism to Bitcoin may boost the longer-term underpinnings of Bitcoin as a newform reserve asset.

How China’s Opposition May Benefit Bitcoin

BI’s report “China’s Digital Gold Pushback Enhances Bitcoin” also stated the increased digitalisation of money and finance-based transactions in relation to open-source software is highlighting the drawbacks of societies that lack free flows of capital and discourse. Its report argues that the world wants the US dollar as the global reserve currency despite the efforts China has made to give alternative solutions.

It also points to the rising use of digital dollars as measured by the market cap of Tether, the predominant stable coin and most widely traded digital asset. BI says that the ending of Bitcoin mining in China will only encourage decentralisation and strengthen the network underpinning the price with US states like Texas and Illinois pioneering the search for cheap energy.

BI commodity strategist Mike McGlone said, “The fact that the world’s largest producer and hoarder of gold – notably in recent years – appears to be taking the risk that the analogue reserve asset won’t be made redundant by the digital in a world heading that direction may elevate the incentive for the US and much of the free world to embrace Bitcoin”.

The BI report also says gold should continue to serve its reserve asset purpose as the ability to transact and transmit value around the clock and settle instantly maintains the price discovery stage for Bitcoin. BI also pointed out that there is a solid foundation to Bitcoin price appreciation as it is becoming scarcer while currencies debase over time and more money is being pumped into the system.

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