Things are once again looking quite bad for the cryptocurrency sector as a whole. All currencies have taken yet another hit in terms of value, and it does not appear this situation will change over the next few hours. The Bitcoin price lost another 5.58% overnight, although no one knows for sure why this is happening exactly.
What is Going on With the Bitcoin Price?
It is evident the Bitcoin price is still in a very volatile phase right now. Despite some big gains earlier this week, things are slowly heading back in the wrong direction again. Although the Bitcoin price is still holding its own around the US$3,500 mark for the time being, it is evident things may head toward US$3,000 in the coming days. That would be a rather unfortunate turn of events, especially considering there is no valid reason for the Bitcoin price to go down in the first place.
More specifically, the news coming out of China should, in theory, only affect Chinese Bitcoin users. Just because the country’s main exchanges are halting trading at the end of October – which is still six weeks away, mind you – doesn’t mean Bitcoin itself has suddenly become worthless. Moreover, China only represents 12% of all Bitcoin trading volume, making it a blip on the radar when looking at the bigger picture.
It is true that the Bitcoin price initially relied on Chinese traders first and foremost. However, that situation changed quite a bit when the PBoC introduced new anti-money laundering requirements for all exchanges earlier this year. All companies complied with those demands, even though they were forced to suspend withdrawals for weeks on end. Even then, the Bitcoin price only budged briefly and quickly returned to its original value soon afterward.
It is during times like these that a lot of people forget that Bitcoin is a global cryptocurrency and not a token used by China first and foremost. The situation affecting Chinese Bitcoin exchanges has nothing to do with the Bitcoin protocol whatsoever. Moreover, the rest of the world shouldn’t care about what is happening in China, as that country will always do its own thing regardless of what the rest of the world would prefer. This is also not a precedent whatsoever, and it will most likely turn out to be a temporary situation in the end.
If more people kept this information in mind, the Bitcoin price wouldn’t be going through another bearish period right now. Unfortunately, it is what we must deal with regardless. With the Bitcoin price losing another 5.38% in value overnight, it is evident things are not evolving in the right direction. Despite US$1.5 billion in 24-hour trading volume, it appears to be a matter of time until the price drops below US$3,500 once again. Whether or not next week will bring any improvement remains to be seen.
What is rather interesting is how the Bitcoin price is still hovering around US$3,000 in China for the time being. This shows that the local users are not giving up on Bitcoin just yet, despite some major selling pressure on OKCoin and Huobi right now. Bitfinex, Bitstamp, and bitFlyer are all generating a lot more volume and value Bitcoin at US$3,500 to US$3,540. There is no reason to push the Bitcoin price down any further whatsoever, as China’s trading volume is all but drying up. It is now time for the rest of the world to determine the proper Bitcoin value, without being weighed down by the Chinese government in any noteworthy capacity.