Bobby Lee, the co-founder and former CEO of crypto exchange BTCC, believes Beijing may seek to outright prohibit Bitcoin.
Recent Chinese FUD activities were a part of BTC’s unceremonious dump a few months ago.
To prevent financial institutions from financial risk, Chinese authorities issued notices prohibiting financial institutions from engaging with crypto businesses. Later, due to environmental concerns, miners were forced to stop working.
When each of these events was announced, the price of Bitcoin plummeted significantly. Could a ban on Bitcoin holdings be the final nail in the coffin?
Is a Bitcoin ban on the way?
A series of five straight daily green candles has restored market optimism after months of bearishness. Bitcoin soared just shy of $40,000 in the early hours of the morning (GMT) before giving back some of the gains.
With that, the China-induced bearishness that has dominated the market for the previous three months or so has gone into the background.
However, Lee, who sold BTCC in 2018 and later founded wallet company Ballet, believes the Chinese crackdown is not yet complete. This time, Lee believes Beijing will go all-in with an outright ban on Bitcoin holdings.
“The next thing they may do, the final straw, is outright prohibited cryptocurrency.”
Previously, whenever Chinese authorities imposed restrictions, citizens devised workarounds.
Users flocked to over-the-counter and peer-to-peer trading platforms to avoid the restrictions imposed by the 2017 yuan ban on token exchanges. Tether’s popularity skyrocketed as a result of this.
Bitcoin and cryptocurrencies have stayed legal to own and sell despite several restrictions in the past. It’s absolutely legal to buy and sell it from people, but not through corporations.
However, Lee believes that Bitcoin’s success will be the deciding factor in the Chinese government’s decision to outright ban it. Significant price increases, he believes, would result in an outright prohibition.
“If Bitcoin reaches $500,000 or $1 million, China may decide to outright outlaw it since people will no longer be able to hold it. At that point, there will be a lot of selling pressure on Bitcoin. “I’m going with a 50-50 chance.”
The digital yuan is not a consideration.
Some predict that central banks would prohibit private cryptocurrencies like Bitcoin and Ethereum in favor of pushing their own digital currency.
Lee, on the other hand, does not agree. Not in the case of the People’s Bank of China, at least. The digital yuan, according to Lee, isn’t a true competitor to private cryptocurrencies.
“The digital yuan is essentially an outgrowth of China’s existing fiat currency. For the most part, I don’t believe the future digital RMB has influenced regulatory bodies’ views on Bitcoin.”
Lee believes that any prospective restriction arises only from Bitcoin becoming too big.