China Blocks Popular Crypto Accounts on Weibo, Bitcoin Reacts
Bitcoin fell back to $35,300 again into the weekend but remains in the $33k-$40k range.
Today’s drop in prices can be attributed, yet again, to the crackdown news from China. Reportedly, a large number of cryptocurrency KOL (key opinion leader) accounts have been blocked on Weibo, which is China’s Twitter.
These accounts involve China’s most famous traders, early Bitcoin adopters, and DeFi proponents but don't seem to include ads of cryptocurrency exchanges.
“This is the harshest suspension of crypto in history, and it may be a response to Beijing's crackdown policy,” noted Chinese publication Wu Blockchain.
"The chart must show that the market is moving in the direction the fundamentals suggest. When news comes out, the market should act in a way that reflects the psychological tone."
Bearish news impacting us now vs prior months demonstrates the fundamental weakness present.
— Cold Blooded Shiller (@ColdBloodShill) June 5, 2021
However, what’s important here is that much like the crackdown on high leverage derivatives trading and crypto mining being in preparation for the upcoming 100th anniversary of the ruling communist party on July 1st, this step has been taken for the same reasons. Molly, the head of marketing at HashKey Hub, noted,
“It’s true that many blockchain and bitcoin-related social media accounts got suspended. It’s quite normal thing during the big party event. De-leverage, law enforcement is stricter to make sure the instability of the society.”
Ever since the reports of the crackdown came from China, state-owned media channels have been clarifying that regulations have been particularly for exchanges who are asked to restrict their leverage trading.
As for Bitcoin mining, only those involved in coal-based sources have been targeted, and the use of hydropower resources, which Sichuan has in abundance and gets wasted, has been supported. Molly said,
“25 days til the 100 years anniversary. No need to fud though, bitcoin mining farms ain’t getting ban, exchanges ain’t got shutdown.”
#btc It's said that all #mining farms in China that rely on fossil power have to exit the market. Some facilities in Sichuan and Yunnan might still be allowed to operate during the rain season this year. No one knows how things are going after that.
— Red Li (@redtheminer) June 4, 2021
Local publication Wu Blockchain also noted that Chinese media and social platforms are both managed by the Propaganda Department, hence the move.
With all the discussions internal and private, things have been unexpected, just like with the ban of Weibo accounts. As such, “It is currently impossible to predict whether these departments will introduce crackdown policies and the intensity, it added.