China Embraces Blockchain Technology As CNY BTC Trades Less Than 1% Of Global Crypto Trading

  • China’s National Audit Office & Ant Financial is leveraging blockchain technology
  • China’s central bank crackdown on cryptocurrencies has resulted in the Chinese yuan (CNY) accounting for less than 1% of global Bitcoin (BTC) trading.

China’s central financial institution, the People’s Bank of China (PBoC), recently announced that the Chinese yuan (CNY) is now used in less than one percent of the world’s total Bitcoin (BTC) trading. According to CryptoCompare data in September 2017, CNY BTC trading accounted for over 90 percent of global bitcoin trades. In order to reduce the number of bitcoin transactions involving the Renminbi, the Chinese government moved toward banning cryptocurrency purchases using fiat currencies.

CryptoCompare BTC CNY Bitcoin TradingSource: CryptoCompare

Moreover, authorities in China placed travel restrictions on employees of crypto exchange Huobi and OKCoin. Both these exchanges had one of the highest crypto trading volumes in China at the time. Additionally, 85 initial coin offerings (ICOs) and 88 local cryptocurrency exchanges, which constituted the majority of China’s crypto economy, have now shut down. Due to the government-imposed restrictions, Huobi shifted its operations to Singapore, a country offering a more favourable crypto environment.

Meanwhile, OKCoin, now known as OKEx, has moved its headquarters from China to crypto-friendly Malta. Cryptocurrency exchange Binance, whose Q1 2018 profits exceeded that of Deutsche bank, Germany’s largest financial institution, also shifted its operations from mainland China to Malta due to regulatory pressure.

$1 Billion In Chinese ICO Investments Returned To Investors

During its nation-wide crypto crackdown, the Chinese government labeled ICOs as an “illegal public financ[ing]” method. ICOs were accused by the country’s authorities of aiding in money laundering and other types of illicit activities, including the issuance of fraudulent and illegal securities. According to a September 22nd, 2017 report by Xinhua news, approximately $1 billion worth of investments in 43 different ICO projects were given back to investors after a government-led crackdown on local crypto-related startups.

Chinese authorities widened the scope of their cryptocurrency ban in February by prohibiting the nation’s residents from trading and acquiring digital currencies through exchanges located in countries outside of China. The heavy restrictions placed by the Chinese government have also led to giant cryptocurrency mining company Bitmain shifting its headquarters from mainland China to Singapore. Bitmain has now established its mining operations in the United States and Canada as well.

Although China’s government has been critical of cryptocurrencies, it has praised and adopted blockchain technology in a number of its routine operations. For instance, the Chinese government’s National Audit Office is reportedly planning to implement a blockchain-based solution for its existing data infrastructure. Billionaire Jack Ma, founder of giant online retail company Alibaba, has also been a strong supporter of blockchain technology, while referring to Bitcoin and other cryptocurrencies as merely a “bubble.” Notably, Ma’s Ant Financial company introduced a blockchain-powered money transfer service on Monday, which is now sending digital payments from Hong Kong to the Philippines.

Crypto Analyst Willy Woo: Next Bitcoin Bull Run Could Start in One Month

Siamak Masnavi

On Saturday (June 27), prominent crypto analyst, entrepreneur, and investor Willy Woo said that according to his latest Bitcoin pricing model, Bitcoin's next bull run could start as soon as a month from now.

As exciting as this sounds, before examining Woo's comments, it might be a good idea to explain what "black swan" and "white swan" events are.

Nassim Nicholas Taleb is a Lebanese-American essayist, scholar, mathematical statistician, and former quantitative trader. He is widely recognized as one of the world's top experts on probability and uncertainty.

Publishing company Penguin Random House describes Taleb's landmark five-book series Incerto (Fooled by Randomness, The Black Swan, The Bed of Procrustes, Antifragile, Skin in the Game), which as been translated to forty-one languages, "an investigation of opacity, luck, uncertainty, probability, human error, risk, and decision-making in a world we don’t understand."

His publisher goes on to say that Taleb "spends most of his time as a flâneur, meditating in cafés across the planet," even though since 2008 he has been serving as a Distinguished Professor of Risk Engineering at New York University’s Tandon School of Engineering.

In his 2007 book The Black Swan, Taleb wrote that a "Black Swan" event is an event that has the following three attributes:

"First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility.

"Second, it carries an extreme 'impact'.

"Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.

"I stop and summarize the triplet: rarity, extreme 'impact', and retrospective (though not prospective) predictability.

"A small number of Black Swans explains almost everything in our world, from the success of ideas and religions, to the dynamics of historical events, to elements of our own personal lives."

According to an article in The New Yorker by Bernard Avishai published April 21, Taleb told Bloomberg Television on March 31 that he gets "irritated" whenever he sees/hears the COVID-19 pandemic referred to as a "black swan" event. 

Taleb told Avishai that this term was not designed to provide “a cliché for any bad thing that surprises us.” 

In an academic paper called "Systemic Risk of Pandemic via Novel Pathogens - Coronavirus: A Note", which was published on January 26 (when COVID-19 was an endemic confined mainly to China's Wuhan province), Taleb and two co-authors (Joseph Norman and Yaneer Bar-Yam) warned that due to "increased connectivity," the spread of this coronavirus would be "nonlinear." 

In his interview with Bloomberg Televisioin, Taleb said that had governments spent penniesback in January, they could have avoided spending trillions.

On March 26, in a Medium post titled "Corporate Socialism: The Government is Bailing Out Investors & Managers Not You" (co-authored with Mark Spitznagel), Taleb said that he did not consider COVID-19 to be a "Black Swan":

"... some people claim that the pandemic is a 'Black Swan', hence something unexpected so not planning for it is excusable. The book they commonly cite is The Black Swan (by one of us). 

"Had they read that book, they would have known that such a global pandemic is explicitly presented there as a white swan: something that would eventually take place with great certainty. 

"Such acute pandemic is unavoidable, the result of the structure of the modern world; and its economic consequences would be compounded because of the increased connectivity and overoptimization.

"As a matter of fact, the government of Singapore, whom we advised in the past, was prepared for such an eventuality with a precise plan since as early as 2010."

After that long preamble, it is time to take a look at the comments Woo made on Twitter yesterday about his latest Bitcoin pricing model, starting with the first tweet in the thread:

Woo then used the chart seen in the following tweet to illustrate that COVID-19 was a "model breaking outlier":

However, it's not all bad news since Woo says that the longer it takes us to get to Bitcoin's next bull run, the higher the peak price will be:

Woo is not the only crypto analyst/researcher who expects Bitcoin's next major price rally to come soon.

As CryptoGlobe recently reported, on June 23) Ki Young Ju, the CEO of South Korean blockchain analytics startup CryptoQuant, used on-chain data from his company's CQ.Live platform to explain why he believes the next Bitcoin bull market will start around the middle of next month:

 

Featured Image by "SanFermin" via Pixabay.com