Bitcoin Diehards Undeterred as China Seeks to Tighten Controls
(Bloomberg) -- Bitcoin devotees aren’t losing their enthusiasm even as China tightens its control of the use of cryptocurrencies.
"As long as there are exchanges somewhere in the world, bitcoin is useful all over the world," Roger Ver, one of the earliest investors in bitcoin who is known as Bitcoin Jesus for proselytizing about the digital currency, said in an email. "I don’t think it matters much that some exchanges are being shut down."
China plans to ban trading of bitcoin and other virtual currencies on domestic exchanges, dealing another blow to the $150 billion cryptocurrency market after the country outlawed initial coin offerings last week, Bloomberg News reported earlier Monday. The ban will only apply to trading of cryptocurrencies on exchanges, according to people familiar with the matter, who asked not to be named because the information is private. Authorities don’t have plans to stop over-the-counter transactions, the people said. China’s central bank said it couldn’t immediately comment.
Bitcoin had slumped on Friday after Caixin magazine reported China’s plans, capping the virtual currency’s biggest weekly retreat in nearly two months. The country accounts for about 23 percent of bitcoin trades and is also home to many of the world’s biggest bitcoin miners, who use vast amounts of computing power to confirm transactions in the digital currency.
Not everyone is convinced China will be that draconian.
The government will likely reopen the exchanges once it sets up a registration process for the ICOs, to weed out fraud and to potentially prevent capital from fleeing the country, Brock Pierce, chairman of the Bitcoin Foundation, the nonprofit promoting bitcoin’s use, said in a phone interview. Many of the new currencies issued through the ICOs were being listed on the exchanges that also sell more well-known cryptocurrencies, like bitcoin.
“And it’s just China, it’s just one market," Pierce said. The nation is the world’s third-largest market for trading cryptocurrency, behind Korea and Japan, he said.