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Author: Admin | 2025-04-28
Decreasing interest rate targeting and loosening the money supply in China, which will help in the short term with Bitcoin's correlation with risk assets as central banks race with one another to fight growing downturns in the economy around the world. Already, Chinese investors are racing back from bonds to Chinese equities - risk assets more correlated with Bitcoin's price. In the United States, the Federal Reserve is also lowering rates and expanding US monetary supply, which will allow the Chinese central bank to also lower rates to keep the Yuan at the same preferred trading range as now and not to worry about a weakening Yuan against the US dollar (in fact, both may just weaken against Bitcoin.)3- Chinese businesses are still a large part of Bitcoin's networkIn the case of Bitcoin mining, it's estimated that about 20% of the global hash rate still resides in China despite increasing amounts of restrictions and province-level bans as of 2022. As local governments in China struggle to raise tax revenue because of declining land value, the prospect of working with companies that can leverage stranded power into tax revenue and economic growth becomes much more attractive - and may account for the surprising amount of global hash rate securing the Bitcoin network remaining in China despite the level of restrictions and bans.Bitmain and Bitcoin mining companies were originally from China. Though tariffs have hit them on the American side and restrictions on the Chinese side, and now they manufacture mostly outside of China, they still maintain many offices in China. Many mining pools offering software that coordinates Bitcoin mining originated from China, and exchanges such as Binance, Huobi, and OKX did, too. As an economic downturn with few state-guided technological windfalls unwinds, the entrepreneurial energy dedicated to starting Bitcoin's momentum in China may now be directed towards Bitcoin again, along with increases in buying activity. Chinese entrepreneurs, businesses, and buyers will once again have the opportunity to contribute their efforts to Bitcoin - as I've written at length about in my book on Bitcoin + China. China's loss, in this case, may well be Bitcoin's gain.
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