The Impact of China's Decisions on Bitcoin

The U.S. national debt has surpassed $35 trillion. Faced with such a huge burden, the U.S. must take measures to alleviate economic pressure. Bitcoin, with its limited supply, has become a “safe-haven asset” in the eyes of many investors. It is well-known that Bitcoin's supply is fixed, which is one of the reasons it is considered rarer than gold.

Cryptocurrency is not limited to Bitcoin. If you think Bitcoin is the only “scarce asset,” you are mistaken. Currently, there are over 20,000 types of cryptocurrencies globally, including various coins like Ethereum and Dogecoin. Although Bitcoin currently dominates the market, this does not mean it is the only truly limited currency. The cryptocurrency market is full of bubbles, and this bubble continues to expand, attracting a large number of speculators into the market. However, in this process, many people do not realize they may be the ones ultimately “cut down.”

The value of Bitcoin comes not only from its limited quantity but also from the support and endorsements of many “wealthy individuals.” The influx of capital into the market has caused Bitcoin's price to rise continuously in the short term. Ordinary investors who wish to profit from this actually rely on the actions of these “rich people.” Once these large funds start selling Bitcoin or conducting large-scale conversion operations, the market is likely to experience a significant crash, even leading to a “halving” phenomenon. Capitalists may seek financing again, pushing prices up and attracting a new round of investors, continuing to expand the bubble.

If one day China suddenly decides to completely ban Bitcoin trading or shut down the Bitcoin trading network, it would severely impact the market. This is because China has always been an important player in global Bitcoin trading and mining.

The Bitcoin market is not as simple as the outside world claims. Its value largely depends on market enthusiasm and the support of wealthy investors, rather than mere scarcity. Moreover, China's attitude and actions can influence Bitcoin's fluctuations.