Can Bitcoin bounce back after China’s ban?

China took its strongest action so far against cryptocurrencies; and according to the PBOC, Bitcoin, ether and tether are not legal and should not and cannot be used as currency in the market because they’re issued by non-monetary authorities and use encryption technology.
But the government didn’t ban possession of cryptocurrencies, a move that would have dealt an enormous blow to the entire crypto space.
Any banning of crypto possession would probably have sent everything crypto 20% lower, but this did not happen.
Bitcoin initially fell as much as 9%; nearer to $41,000, but Bitcoin, ether and tether came off their intraday lows by midday Friday.
In 2013, China banned banks from handling Bitcoin transactions. In 2017, it also ordered local cryptocurrency exchanges to cease operations, forcing people in China to use offshore exchanges.
Earlier in 2021, Beijing cracked down on financial institutions from offering crypto services as well as Bitcoin mining. Now China is going even further, targeting individuals, not just businesses, and closing off ways to get around earlier limits.
But as China bans crypto activities, it has been working on its own digital yuan, with the project’s roots tracing back to 2014 and testing with commercial institutions beginning in 2017.
Friday’s ban, however, isn’t that bad. There was one big sign that investors would eventually set aside China’s latest announcement. The low recorded by Bitcoin, four days ago, on 20 September, around $36,900 did not repeat itself.
After the PBOC’s decision, Bitcoin has stayed stable, and it didn’t break to new lows; at least has not yet.
The news is moving the market but over the longer term, it seems that it is not going to make a huge difference. Friday’s move seems to to be a reaction to what news China had earlier this week with Evergrande. What happened with Evergrande has put some shame on the state-controlled economy.
Several other regulatory actions could follow and Bitcoin was the first target. Some fintech platforms that allow clients to invest in cryptocurrencies using retirement funds consider the PBOC’s decision as not surprising or shocking.