Businesses in China have been losing revenue since the country’s policy decision to ban Bitcoin and other related operations. According to the latest reports, Huobi Global, one of the largest exchanges in China, has lost around 30% of its revenue. Meanwhile, other platforms and miners have found new homes across the globe.
Meanwhile, the crackdown by China continues with Chinese journalist Colin Wu pointing out recent arrests concerning illegal cryptocurrencies worth $80 million.
Having said that, it was also made clear that China might not reconsider reversing the ban that was earlier being speculated.
However, Bitcoin entrepreneur John Carvalho has again left room for some speculation with his new theory. He believes that China has an ulterior motive behind the ban that ‘combined FUD with a removal of hash power.’ In a recent podcast, he speculated,
“What I think is that there’s a portion or time in every Bitcoin cycle where China decides to basically price manipulate, in order to get more Bitcoin. And they will you know, sell their Bitcoin.” (sic)
He further explained that China will use the ‘collateral to short Bitcoin to get the price down, and re-accumulate later at the bottom.’ After the policy announcement by China, Bitcoin’s short-term price had weakened.
In the minutes following China’s crypto ban, #Bitcoin’s price tumbled more than 9% to $41,083. This decision was made 9,000mi away from ELSL, but caused an instantaneous loss of ~$3.5mm worth of Salvadoran taxes. Just more dips to buy right, @nayibbukele?https://t.co/L0a9gioxTC
— Steve Hanke (@steve_hanke) September 24, 2021
It is noteworthy that Carvalho has made it clear that his theory has made assumptions that might not be airtight. But, he commented that he “refuses to believe that China is stupid”. Considering, the US is now the number one mining destination, contributing over 35% to the global hash power.
In that context, Carvalho reminded that,
“China is also dominant in the production of ASIC chips for miners, not just mining directly.”
So what to expect next?
Therefore, his theory revolved around China’s decision to ban Bitcoin by creating “a demand for the aftermarket”. As miners have ‘inflated’ the value of chips, he added,
“My theory is that all they did was they sold a small portion of their miners.”
However, he added that there is no real gauge to know how much of the mining operations were sold to the US. But, Carvalho seemed convinced that China is, in fact, buying Bitcoin at $30k.
— Gabor Gurbacs (@gaborgurbacs) September 24, 2021
The Bitcoin commentator further predicts that China will reverse the ban on mining activities, leading to parabolic gains in the industry.
“And so they’re just trying to find ways to manipulate the price to be able to get more Bitcoin. “