Bitcoin and the Chinese New Year: A Time for BTC Celebration or Crypto Concern?
All the old cultures of the world have laid great stress on festivities that bring the community and their people together. The Indian sub-continent, Middle East and Chinese are particularly well known for their ancient traditions. More so now, with the advent of globalization and the outreach of China; people the world over are now, more than ever, aware of Chinese traditions.
The Times Are A Changing
Today if one was traveling around the world, to any major city or tourist spot, it is impossible to miss the red cloth with golden writings welcoming the Chinese new year. This is a time for family and reflection; it is also a time for holidaying and traveling. This means that any business is bound to be affected and the crypto space is no exception.
While the government has been rather strict with crypto assets and gone ahead to ban them, this despite the lead Chinese markets had. Even so, the restriction does not cover peer-to-peer [P2P] and Over-the-Counter [OTC] trading. Despite the government ban, a large number of members of the community from China are using VPNs (Virtual Private Networks) to get around the regulation. And then there are some businesses that work in China but have registered in countries with friendlier laws.
Industry leaders such as Binance exchange simply moved across the sea to Japan. Then there are other examples that have spread to Singapore, Malta and even Uganda. This, coupled with governments own sources stating that they see blockchain technology as the future. All this makes one thing clear: that the importance of China cannot be understated.
What Are The Implications
With such a large and important market on holiday, it means two things: a. The markets are going to be slower as trading will be affected by a segment that is away; b. The markets are going to have a higher sale order rate, as those going away will likely want to have more ready cash to enjoy.
And this was seen when the celebrations for this year kicked off last month saw the prices fall from around the $4000 mark to lows of $3390 by the end of the month. With the actual holiday period officially beginning on Tuesday, February 5th, most are expecting more falling prices. At the very least a lean period is expected until the 19th of February when the holidays officially end.
Despite strong government influence, China is still involved in a significant way with daily crypto trading. Thus it will be no surprise that the New Year festivities will see slower trade. On the upside, this might also mean that the next couple of weeks will not be as volatile. One hopes that once the holidays are over and normal service resumes, the market will reflect higher prices.