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According to reports, China plans to ban all cryptocurrency exchanges. The price of Bitcoin plummeted, falling from roughly $4,600 to $4,000. But three days later, the price of Bitcoin (and most other major cryptocurrencies including Ethereum) is rising again.
China definitely can pull such a move. The country clamped down hard on Bitcoin several times in the cryptocurrency’s history. And the People’s Bank of China recently banned cryptocurrency ICOs (Initial Coin Offerings, or token sales) in the country.
The reasoning behind China’s actions towards Bitcoin is complex, but is mainly driven by the fact that cryptocurrencies are tough to control and can be used to move money out of the country, which does not sit well with China’s authorities.
Banning all crypto trading on exchanges is a far more serious move than the ICO ban. Several of the world’s largest cryptocurrency exchanges reside in China, and the country is neck and neck with the U.S. in terms of Bitcoin trading market share.
In other words, Bitcoin should be plummeting. Instead, it’s rising steadily and sits at $4,320 at the time of writing, meaning that the market isn’t overly concerned about the ban.