Will China be able to resist Cryptocurrency for Long?

China has banned all kinds of cryptocurrencies, alleging that crypto is facilitating the Capita flight out of the country.  As the cryptocurrency is not centralized and is not controlled by any of the government, therefore it is being used in criminal activities such as fraud and illegal assets transfers.

Since 2019 china has issued a crackdown on all kinds of cryptocurrencies and their mining sites. In late 2021 china announced that it will start issuing its centralized digital currency, which will be called digital yuan. Though digital yuan will be owned by the government and will be controlled by the central bank of China.

India has followed China’s footsteps too by announcing the launch of the digital rupee by the end of 2022. Are all these indicators to tackle the crypto market? Or blockchain and a decentralized currency is the future of the world’s economy?

There is no doubt that the volatility of the cryptocurrencies such as bitcoin makes it one of the riskiest investments, hence creating a lot of speculations in the minds of the investors and financial experts. If we look at the size of the growth of digital currency, it is quite surprising. It touched the US three trillion dollars last November. But at the same time, it lost half of that at the beginning of 2022, when bitcoin and all the other currencies dropped in value by 50%. Bitcoin touched an all-time high in late last year, which was $69k and now it is trading at $35k.

In contrast, the currencies which are regulated by the governments and are controlled by the central banks have rarely been through such huge fluctuations. If we look at the US dollar, it remained steady throughout the year, making it more steady and safe to retain or invest.

There has been a period in the near past when bitcoin lost %80 per cent of its worth and the expert is predicting the same again. It happens then will be a major blow for the blockchain currency. It will send a  tremor to the investors, investing in the volatile assets.

As the value of the crypto is unpredictable so is its future. With all the crackdown that is going on in China, we can say predict that Blockchain technology will stay. The future of cryptocurrencies is unpredictable, it can go either way. Only time can tell, there are a lot of governments who have accepted between coins and legalized its operation.