Over the past year, the cryptocurrency market took a series of heavy punches from the Chinese government. The market took the hits like a warrior, but the combos have taken its toll in many cryptocurrency investors. The market lackluster performance in 2018 pales in comparison to its stellar thousand-percent gains in 2017.
What has happened?
Since 2013, the Chinese government have taken measures to regulate cryptocurrency, but nothing compared to what was enforced in 2017. (Check out this article for a detailed analysis of the official notice issued by the Chinese government)
2017 was a banner year for the cryptocurrency market with all the attention and growth it has achieved. The extreme price volatility forced the Central bank to adopt more extreme measures, including the ban of initial coin offerings (ICOs) and clampdowns on domestic cryptocurrency exchanges. Soon after, mining factories in China were forced to close down, citing excessive electricity consumption. Many exchanges and factories have relocated overseas to avoid regulations but remained accessible to Chinese investors. Nonetheless, they still fail to escape the claws of the Chinese Dragon.
In the latest series of government-led efforts to monitor and ban cryptocurrency trading among Chinese investors, China extended its “Eagle Eye” to monitor foreign cryptocurrency exchanges. Companies and bank accounts suspected of carrying out transactions with foreign crypto-exchanges and related activities are subjected to measures from limiting withdrawal limits to freezing of accounts. There have even been ongoing rumors among the Chinese community of more extreme measures to be enforced on foreign platforms that allow trading among Chinese investors.