The cryptocurrency industry has been instigated once again as more fake news has been circulating in an effort to undermine the success of cryptocurrencies, especially Bitcoin. The false information that has been being spread makes claims that the Chinese government plans to ban Bitcoin exchange.
These rumors began to spread after China banned ICOs.
ICO stands for Initial Coin Offering, and is an unregulated crowdfunding methods that uses cryptocurrencies such as Bitcoin or Ethereum. Entrepreneurs use ICOs rather than the regulated capital-raising methods used by large corporations, such as venture capitalists, banks and the stock exchange.
No Official Evidence or Confirmation of These Rumors
However, there is no evidence that the Chinese government have taking any actions against the exchange of Bitcoins. The philosophy behind Bitcoin is non-regulated, independent cryptocurrency. The premise of Bitcoin is simple, it is an independent currency and not part of any national or political agenda.
There has been no confirmation whatsoever that the source of this information is accurate. Caixin, a Chinese news source touched the topic but did not supply any evidence or site any credible sources.
According to the Caixin site, China resolved to halt all cryptocurrency exchange in their country. However, on Twitter CNledger directly opposed the sites statement, pointing out the abundance of fake news that has been being distributed, and pointing to the fact that nobody has been able to confirm these stories at all. CNledger went as far as to ask exchanges if they were informed of any shutdowns. Each on stated that they had not received any shutdown notices and will continue normally.
The issue with this misinformation is that it has an actual effect on the value of the Bitcoin. When people get scared of losing their investments, they start selling them off. The resulting panic reduces the value of the currency.
Coinmarketcap monitors these markets, and reports that American cryptocurrency markets have gone down by over 7%. This has been linked to the fear instigated by the misinformation being spread.
The Fake News Could Be Market Manipulation
A point to consider is the fact that anyone who knew that the rumors being spread were false would be in a position to make a lot of profit from buying the Bitcoins that people were selling in their state of panic. When people are afraid that they will lose out on their investment, they start selling off their shares at lower prices, operating on the mindset that something is better than nothing. Were someone to have intentionally spread this misinformation to cause such a panic, they could easily start buying up Bitcoins at lower costs. This shows how easy it is to manipulate the markets with rumors and fake news.
Should the shutdown actually be true and happen, there are those who say that Bitcoin will not have any problems as it is not an ICO. Regardless, China does seem to have an agenda for regulating cryptocurrencies, and this is a fact that cannot be ignored. This does not however, mean that there is any evidence that China is going to shut down Bitcoin exchange.
It is doubtful that China will want to cryptocurrency exchange. The biggest issue that any government will have is the lack of regulation. By regulation, I mean the lack of having their hands dipped into your Bitcoin pockets. If you were to be paid entirely in Bitcoin, most governments are not set up with tax codes to demand a percentage of that payment. This is likely the biggest issue that China, or any government for that matter, could have with Bitcoin.
It is also one of the biggest benefits of using Bitcoin. For now, the rumors about the Chinese government shutting down Bitcoin exchange in their country should be treated as exactly what they are, unconfirmed rumors. It is highly likely that there is some twisted mind (or minds) behind these rumors that is sitting in a position to buy up large amounts of Bitcoin at very low rates, thus making themselves quite a large profit when the market stabilizes again.