The Economy of China & Digital Money | Cryptocurrencies

The Economy of China & Digital Money | Cryptocurrencies

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China the midd kingdom an economic world
power that presents itself not only
through its far-reaching culture but
also through his forward-looking
technology in many areas of Industry
China is one of the leading countries
but the country does not seem to be open
to all new technologies the crypto
industry with its miners seem to be a
thorn in the economic power side
China has banned all crypto transactions
and also announced that it will stop the
mining of digital assets the most severe
blow to the industry so
[Music]
far
[Laughter]
the People’s Republic of China is not
enthusiastic when it comes to the
cryptocurrency stars and especially the
number one Bitcoin has had a long
intense dispute with China since its
invention trading the world’s Odus
cryptocurrency is not welcome in the
People’s Republic of China after all it
was China that helped Bitcoin achieve
its current Fame finally it is thanks to
the numerous pioneers and miners from
China the countries like Salvador or
Venezuela offer Bitcoin as an
alternative means of
payment nevertheless the Chinese
government’s negative attitude towards
cryptocurrency has become increasingly
clear and incisive over
time but the Chinese authorities are
going even further in their efforts to
suppress crypto trading crypto
transactions are considered illegal
Financial activities including services
offered by offshore exchanges The
People’s Bank of China reported on his
website it added that cryptocurrencies
including Bitcoin and tether are not
real fiat currency and thus cannot be in
circulation Bitcoin crashed after the
announcement falling 8% to around
$43,000 fraud moneya laundering and
excessive energy use are all associated
with
cryptocurrencies the enormous energy
consumption of crypto mining is also a
reason why the entire crypto industry is
under
scrutiny the Chinese economic planning
Authority explained that it was their
job to take tough action and stop crypto
mining in order not to jeopardize the
government’s said climate
targets China is facing a severe energy
crisis that has already affected
Commodities such as aluminum and
steel the country hosts about 50% of the
world’s crypto Miners and had a 46%
share of the global hash rate a measure
of the computing power used in mining
and
processing will Bitcoin and the crypto
industry succeed without China what do
the analysis and crypto industry experts
have to say about the latest development
in
China let’s get back to China’s
increasing Crackdown on crypto it looks
like they’ve gone absolute at this point
saying on the pboc website they will ban
all transactions or that all crypto
transactions are illegal we do see um
bitcoin’s price falling down below 44
,000 down below 43,000 right now
42912 let’s get to Joanna ainger our
Asia crypto Zar for more on what this
actually means um Joanna it seems like
from now on everything that you want to
do besides simply holding crypto if you
already have it is illegal is that the
am I reading this
correctly hi Matt that’s kind of what it
looks like but the question always with
these things from China is what does it
mean in practice you know we’ve had the
crackdowns before over the years and
people have been able to do workarounds
and able to say keep exchanges going
even though they they crack on in
exchanges there are a lot of people who
still hold crypto um so you’ll see even
for Bitcoin and the crypto complex
generally the drop that we’ve seen is
actually not that big so it tells you
that it’s not that much of a surprise
but it’s definitely not being you know
it it’s definitely not increasing the
prices either
right so jna why are they doing this now
they’ve been wanting to do it do they
feel emboldened by everything else is it
a distraction because of what’s going on
with
evergrand it might be that they’re
they’re seeing you know the SEC in the
US is cracking down on things as well
they are seeing other Regulators taking
steps but you know China does things
when it does them right so it’s a little
bit hard to tell exactly it could be
that they’re concerned about something
with everr but it could just be that
they’re looking at crypto overall and
saying this is the time when we want to
take this step because they’ve been
going at it you know since before
evergrand was really getting people’s
attention yeah is there concern by the
way that um retail investors are going
to get burned speculating in this uh
asset or is there concern that wealthy
Chinese people are going to use it to
move um wealth offshore
there’s probably some of both in there
and again you know I I don’t have
firsthand knowledge of this but it there
is um speculation that it’s it’s both of
these things and actually one thing to
watch with this would be tether which is
seen as key in terms of flows into
crypto from China and recently I was
looking at prices it’s about 99.1 Cent
and it’s usually a dollar so that will
be interesting with insight and Analysis
let’s get straight to Eddie V Vault our
great crypto Crypt Watcher Bloomberg mli
strategist so Eddie good morning first
of all we’re trying to figure out
exactly how for how much further this
goes right they China had already
declared a war on bitcoin absolutely and
and this seems to be a step further in
trying to ban it completely look it does
feel like an escalation doesn’t it if
they are really saying no transactions I
would like to know exactly what that
means does that mean I cannot buy with
it or does it mean that I can’t transact
with you I cannot send you Bitcoin from
my phone to your phone in you know so so
that I can no longer trade it on an
exchange so I I’m I’m I’m still a little
bit vague on what it means uh what a
transaction is in this particular
circumstances and how strictly they’ll
enfor enforce it but it is confirmation
China doesn’t like this and Bitcoin at
the moment still needs China and Chinese
investors you know there’s a lot of
Chinese investors that have been long
Bitcoin and have been using it and have
been building it up so it’s an
escalation and and we shall see how much
you know crypto prices respond to to
it yeah I think it’s interesting um
Francine makes a good point that they’ve
incrementally been fighting again they
banned exchanges they banned mining but
it looks like what they’re saying is and
the emphasis is on the word all all
crypto related transactions are illegal
to me that means anytime you want to
trade it be it for goods and services or
trading with friends um any kind of
crypto related transactions are legal
and I mean just looking at the price it
doesn’t seem to have hit Bitcoin that
hard right now we’re looking at a drop
of 3% to still
43351 how important is the Chinese
market to
bitcoin the Chinese market is extremely
important and you know the question is
how how how well China will be able to
enforce this I do Wonder though Matt
whether this is whether we are talking
about a ban of transactions or a ban of
ownership because if we if we if
ownership is still legal then
effectively you will have to be able to
trade it somehow but if it’s about
transactions and I won’t be able to pay
for goods and services with it then it’s
an escalation but not as serious as it
as it had been right because then it is
no longer a financial instrument either
which it for the most part let’s face it
Bitcoin is not used that much for
transacting in the financial system it
is used as a financial asset as a store
of we Al it puts it it puts it really in
a area this is like in the US this was
the issue with marijuana a lot um in a
lot of States you could own it you could
hold it but you weren’t allowed to buy
it or sell it so the question was how do
I get it well um the law didn’t make
that clear they just said you cannot buy
it or sell it but you can hold it and
that may be the same uh case with
Bitcoin here well it’s clear it’s clear
which way the direction of travel is
here in China right I think that for me
is the message I we know that China is
not keen on cryptocurrencies in general
particularly ones that they don’t
control so you know a central bank
digital asset will be a completely
different thing but but but but for the
for the for the wide spectrum of
cryptocurrencies I don’t think that they
have made it clear that this is not
something that they like Eddie the
Crackdown in China is not unfortunately
limited to cryptocurrencies they’ve been
cracking down really as our Tom McKenzie
put it to us on risk across the board
and that includes in the property sector
which raises the ever Grand question we
have no idea what happened with the
dollar coupon Bond payment yesterday
whether or not they actually met that
deadline what happens in the next 24 48
hours from from China in general I I I
think we we we have to wait and see we
have to wait and see whether there is
any contagion that comes from this and
yes I think you know the Chinese system
it it it it’s it’s uncomfortable
bedfellows with uh with with capitalism
in general and therefore you know it’s
it’s a it’s a hard case for them to make
um in general that you know trading and
and and free markets and letting people
speculate as much as they want so so
some sort of Crackdown is is possible
but I but for the ever Grand Fallout I
think it is possible that you know that
China contains this it is not an it’s
not something that they can pre that
they cannot prevent the spillovers if
they wanted to so you know whether
whether particular Bond holders will
lose money that isn’t but one question
but they can stop the financial system
from seizing up China is well aware of
the potential of blockchain technology
and has even introduced its own digital
currency the digital Ren also the
Chinese company tensent had already
launched a program called qoin in 2007
which was used in its own messaging
service QQ and also opened its own
secondary
Market as a result in 2009 the Chinese
government banned the use of digital
currencies for the purchase of real
goods and services Bitcoin was one of
them but was not explicitly mentioned in
the ban
However the fact that the Chinese
population already has experience with
digital currencies worked in their
favor China has therefore became the
center of the young crypto industry over
the years meanwhile the Chinese
government decided to wait for the
development of digital coin which in
turn opened up opportunities for crypto
companies to explore in new
ways the first Chinese Bitcoin exchange
BTC China was founded in 2011 followed
by the crypto platforms H and bitmain in
2013 with companies such as by
immediately accepting Bitcoin
payments this in turn attracted the
attention of China’s currency Regulators
in December 2013 they announced that
Chinese financial institutions would no
longer be allowed to process Bitcoin
transactions they declar Bitcoin an
illegal means of payment this
announcement came at a time when Bitcoin
trading had already taken off
considerably and the Bitcoin price
exceeded the $1,000 Mark for the first
time almost 10 days before the ban after
the announcement bitcoin’s value on the
world’s largest Bitcoin exchange at the
time crashed by over
30% for crypto industry insiders China’s
crypto band did not come as a complete
surprise Bitcoin mining however was
excluded from the ban this was still
allowed and favorable conditions quickly
made China and El Dorado for Bitcoin
mining
companies although the regulator did not
prevent in uals from Trading Bitcoin
they advise those involved to be aware
of the associated
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risks we know that China has been taking
steps in this direction but this is
incredibly dramatic I mean what is your
take on this what does this mean for
even a company like Falcon
X sure so you know I think China has
been Banning cryptocurrency for a number
of years now first in 2013 2017 this is
not the first time they’ve done so this
year and for an authoritarian regime
that’s trying to promote their digital W
and keeping in mind that the China
national holiday is next week their
Crackdown on crypto is what I would
really align with senator Pat Tumi a big
opportunity for the United States and a
reminder of our structural advantage
over China in terms of you know just
what we’ve seen historically to what Ed
mentioned this definitely wasn’t as
large of a move as we’ve seen uh you
know prior times in Market movements we
see a red Candlestick down um and panic
initially uh followed by quick buyback
and Market recovery uh for BTC largely
buy side uh led by asab based hedge
funds and for us um institutions across
a number of personas and for eth we’re
seeing a much larger hit with a much
slower buyback uh driven by proprietary
funds who are the winners and losers
here and and if you could get into some
coin specifically you know that would
certainly help us better understand the
situation yeah that’s a really really
good question you know I think uh what
we were seeing it was you know a slower
last two months historically uh for us
on the volume side we saw seven times
more volume today um than we had seen
across you know a number of weeks where
we had a lot of conferences both in
traditional finance and cryptocurrency
uh layer ones are definitely top of mind
I know uh you have spoken um you know
about uh layer ones historically in the
past you know ethereum but also uh
things like Avalanche salon
Adam as well as Luna um in addition to
bitcoin uh and then some tokens outside
of that uh primarily looking at uh
renewed interest in some of the play to
earn tokens like a ygg or an axi
infinity and you know China is saying
they’re going to investigate anyone
working for overseas cryptocurrency
exchanges as well would any Falcon X
employees fall under that umbrella I
mean what does this mean for your
employees and the way that you operate
as a
company
yeah so Falcon X today uh we do have
offices uh in the US as well as our Asia
office uh in India so uh not a direct
impact to our business uh but I think
that’s definitely top of mind for for
any business uh that may have um any
employees sitting in in China as you
mentioned now if you know obviously this
is happening in Asia which which which
used to be sort of the center of crypto
Innovation we’re preparing for tougher
regulation here in the United States
we’re preparing for tougher regulation
on crypto in Europe if that’s the case
and you see a broad-base Crackdown then
where do you think the growth is going
to come
from yeah that’s a really good question
I think you know if we use just China
mining as an example of this uh we saw
China ban Mining and we actually saw a
number of those miners come to the
United States so hash rate is almost 70%
of what it was prior to the ban so we’ve
almost had a full comeback uh from that
and a lot of the miners today are in the
US and so uh we we really saw that
Innovation come to the United States and
again going back to that really an
opportunity for the US to show that
we’re at the Forefront of working uh
with this industry uh to spark
Innovation um I think across the board
everyone’s trying to protect consumers
that is top of mind for any company in
this space how do we do so without
stifling
innovation in 2015 Chinese Bitcoin
mining companies made up half of the
Bitcoin hash
rate the first additional
cryptocurrencies to be exchanged through
soall initial coin offerings Ico were
those of the digital
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currency in Autumn 2017 Chinese icos has
raised over $400 million alerting the
Chinese government in an attempt to
support the weakening Y and prevent the
illegal outflow of money from China the
country’s Central Bank began
investigating the activities of crypto
exchanges in January
2017 as a result the investigation
focused on the stock exchanges approach
to a foreign exchange management and
anti-money
laundering the pboc considered icos to
be an illegal fundraising mechanism it
banned Ico platforms from issuing Ico
tokens and ordered that the funds raised
through icos should be returned to
investors among other things the
regulator found that icos threaten the
stability of the country’s economy and
pose a risk of business failure the
order also stipulated that financial
institutions and non-bank payment
companies may not offer services that
support token-based fundraising
activities while China’s crypto
Community was still processing this new
reality Regulators issued another
directive only two weeks later crypto
exchanges that allowed the exchange of
Fiat to cryptocurrency were defended ly
banned as a result many Bitcoin
platforms moved their activities abroad
While others were forced to close their
platforms
completely what did you think when you
heard about China’s
move I think you know we’ve seen the
resiliency of the crypto markets uh to
sort of changing regulation uh and
specifically change of regulation in
China several times before uh it’s very
hard to eventually predict you know how
any change impacts the The Gatekeepers
or the various players in the market but
it’s very clear that it’s impossible to
regulate Bitcoin itself as the protocol
and people’s usage of sort of the
decentralized protocol whether it’s
Bitcoin or others I think in general
there’s a lot of discussion about the
fact that you know in September
2017 there was also sort of a big China
ban on crypto on exchanges and after
that we we saw sort of the first big
crypto rally of 2017 of Bitcoin reaching
back then the records of uh uh
2017 uh I think you know sometimes when
you think about regulating Bitcoin it’s
like you know a multiple headed monster
you try to cut this head and then you
get five additional heads so it’s very
interesting to see that resiliency of
the protocol itself yeah you definitely
just called Bitcoin Hydra but that’s
cool we’ll just go with that um but to
your point that’s going to be the Bull’s
point that there’s going to be lots of
different Avenues and lots of different
people who want to wind up trading
Bitcoin if China really cracks down and
says you can’t own it which they didn’t
say but say they say you can’t own it
you can’t use it at all and you can’t
trade it how does that not have a
material impact on the price and the
volume that it can trade
with you know I think the global economy
as a global economy is much bigger than
any single state we’re seeing a
transition globally by the way in
capital markets as well from Capital
markets being hyperlocal where people
only trade locally to Capital markets
being Global and then obviously crypto
markets are hyper Global the opposite of
local Capital markets uh there’s
definitely you know there’s always going
to be impact of of various regulations
in the crypto Market but I think we’ll
also see again the resilience of a
global monetary decentralized system and
there’s going to be a shift that we
started seeing you know an exciting
shift this year more towards defi to
decentralized finance to various
protocols I think this will shift the
industry more towards
defi of course the the potential bigger
risk for cryptocurrencies uh and I think
me we may agree that other
cryptocurrencies are the bigger threat
to uh to central banks rather than
Bitcoin which is kind of in a class of
its own for better or worse but the risk
is the other central banks notably the
Federal Reserve uh and certainly the ECB
weighing in and actually deciding how
and when and in what form these things
can trade and whether the central banks
want their own fiat-based digital
currency which could happen how big a
risk is that and is that some of what
we’re seeing priced in here so you know
as always I’m an optimist so any risk is
an opportunity there’s no doubt we’re
seeing you know the the Genies out of
bottle we’re seeing the Dig digitization
of money we’re seeing digital
transformation happening to money which
is the biggest digital transformation of
everything and I think the blockchain
technology represents that shift Bitcoin
represents a new type of of global
commodity uh and Regulators uh will look
for ways to regulate and governments to
innovate uh I think we’ll see a lot of
central banks and governments launching
their own digital currencies I think
this will run in parallel to what we
call today the crypto markets at a
different it’s a different type of an
asset uh but I think you know this
process of moving the entire monetary
system into the digital realm is
definitely something sort of an arms
race between a lot of different
countries around the world y last
question here quickly um since China
made that announcement what kind of
trading have you seen on your
platform well we generally see uh
trading pattern sort of really reflect
with volatility so as volatility is
higher we see more trading activity uh
and as price goes up so you know we’ve
seen in May that correction that lowered
prices of Bitcoin from all-time high
after the mining ban then we’ve seen an
Awakening on a lot of the defi protocols
in the beginning of August which sort of
revived a lot of uh new protocols as
well as bitcoin price and E reaching
almost 4,000 again uh and I think now
with that correction we’re seeing
markets that are a bit softer than they
were a month ago as a result of such
developments some China based exchanges
relocated their operations to other
countries While others had to close
their businesses in April 2019 China’s
national development and Reform
Commission ndrc identified Bitcoin
mining as an undesirable industry in its
preliminary list of sectors that should
be promoted restricted or eliminated by
local governments Bitcoin mining a
computer intensive process of validating
Bitcoin transactions in order to receive
newly coined Bitcoin as a reward F into
the catalog of Industry that the agency
deemed particularly harmful to the
environment as might be expected this
move caused some Panic given that a
significant percentage of Bitcoin mining
rigs were made in China moreover more
than half of the world’s Bitcoin mining
power was located in China as operators
there had access to cheap electricity
although the ND RC eventually dropped
Bitcoin mining from his final draft
after much deliberation the whole
episode was an initial step of what was
to come talk us through some of these
these latest lines coming out from China
how is this different why do you think
the market was quick to shrug it off
yeah good morning Ivon so good to be
back the the latest ban is just an
extension of further tightening of the
crypto policies in China uh this has
been rumored since the summertime that
China will eventually get cut off in
terms of the crypto exchanges Market as
people may know four years ago the pboc
and The Regulators banned domestic
exchanges in China and then what
happened was many of the exchanges just
moved offshore but yet we’re still
servicing people within mainland China
by requiring them to go through VPN
access and so on so this ban when you
talk about crypto transactions I think
there’s a slight mistranslation it’s
really emphasized about crypto buying
and selling the crypto purchasing the
crypto exchange transactions that happen
on the exchange platforms so I believe
that private exchanges private buy cells
are still allowed it’s just that the
Enterprise Le exchanges that action is
now deemed um you know illegal and they
were prosecute so this is why the
recently in the recent last two days the
major exchange platforms around China
have all announced the stopping of
registration of of Chinese
users
why do you think China continues to
double down on this Bobby is it still
concerns about money laundering and and
what you know crypto can actually the
risk that it could bring or is it more
broaden now is it is it about energy
consumption or even the threat of a
digital a threat to the digital REM andb
what do you think is motivating Beijing
yeah I think it has to do with the
controlled currency as you know you know
in a in a in a controlled regime with uh
with Forex uh you know controlled
foreign currencies they really don’t
want any loopholes where people can use
a digital currency vehicle to move
assets abroad so I think that’s the main
reason is is just to retain the control
over the economy the control over the
finances uh and the outflow of money the
inflow and outflow of money but in the
end it’s not it’s not about energy I
think they banned the mining of crypto
earlier this year for the purpose of
alignment with all of the crypto the
tightening ban but as I’ve said before
this is actually not the F final nail in
the coffin which would be the so-called
making crypto assets illegal to hold as
well so that clearly has not happened
yet we’ve reported for for weeks and
months now about miners in China that
are just packing up their bags and going
are you able to track I mean you’re
you’re on the ground in Shanghai how
much activity has actually shifted out
of the country
now so much of the traditional what they
call proof of power power uh
cryptocurrency mining that has moved
abroad so this would be like the Bitcoin
the Litecoin and the ethereum uh there’s
a new category of mining where it
involves proof of stake where it
involves like storage uh the likes of
file coin and other
derivatives uh those are still happening
in China because it’s much harder to
detect these are machines that are
regular computers with uh storage you
know solid state drives and so on and a
lot of that act it is still happening in
China but it’s hard to really classify
that as traditional proof of power proof
of work uh
mining so Bobby just talk us through in
terms of what your outlook is right now
you talked about you know similar
crackdowns we’ve seen from from Beijing
has led to a boom when it comes to to
bitcoin prices is this time very much
the same you think yeah it’s it’s kind
of like you know when the rumor when the
rumor is uh so what is it sell on rumor
Buy on news that’s kind of what’s
happening right now the rumor has been
in the works for several months now that
China will have a very tight Crackdown
on bitcoin this year and the you know
the hammer finally dropped uh the timing
is is reminiscent of what happened in
2017 when the Crackdown came in
September in early September and then of
course we knew that the Bitcoin prices
rallied to a multi-year high uh at the
end of
2017 and this year no different that
uh with the Crackdown now announced sort
of the bad news is that out of the way
uh the market is reacting and processing
digesting that information and I think I
I’m very bullish on bitcoin especially
for endof year rally a FAL rally this
year so I expect Bitcoin prices to break
out again uh in the next few weeks and
months all right we’re still hovering
around that 43,000 level we Tumbl below
that kind of level there over the
weekend it was only the all yeah I’m
just wondering what what you know we’re
still far from that all-time high around
60 63,000 I mean what do you think
prices are really going to go if you’re
talking about yearend rallies now so I
uh I think you’ll easily go over
$100,000 and then depending on how sharp
the rally is it’s also likely to even
touch 200 or even go above that now
obviously going above $200 $200,000 is a
huge milestone so there’ll be a lot of
uh media coverage
that’s what leads to a what they call
fear of missing out rally so generally
that happens every few years and I think
uh you know FAL rally for Bitcoin has
been due for a long time
now I mean we we Bobby maybe just as to
end we we’ve seen this regulatory
Crackdown in China from everything from
fintech to cryptos does it change in any
way how you operate now uh and your
business with
ballet yeah my business is selling
Hardware wallets so we are not impacted
by this and also you know for this being
my second startup from the outset I knew
to position our business to not rely on
the China market so after the earlier
Crackdown our sales in China have indeed
come down but for me it’s not a big
issue because we’ve always relied on the
international Global Market for
cryptocurrency so for for wallet makers
and other businesses that don’t
concentrate their activity in China this
Crackdown doesn’t make a difference
however for those companies that are
focused on the China Market I think this
is tougher for
them following the state council’s
declaration provincial governments began
taking proactive measures to stop crypto
mining The Regulators Justified the new
action mainly on the grounds that
Bitcoin is very energy intensive and
poses a threat to the country’s
environmental goals the fact that the
crypto industry is intensively searching
for a more environmentally friendly
version of Bitcoin has already been Pres
presented with the China Green token
project Chia has been dubbed the green
altcoin how exactly is it greener than
Bitcoin well first of all instead of
relying on uh electricity and uh custom
Hardware to prove that you’re correctly
validating the chain we instead rely on
unused hard drive space and what you do
is you fill your space with what is the
equivalent of a bingo card and you just
store it on your drive until you happen
to win that Challenge and get the chance
to validate a transaction and hard
drives use significantly less power um
if all the hard drives that were going
to ship this year a whole zetabyte worth
uh we compared to just say ethereum
that’s like on10th the total energy
usage per year so if Chia really takes
off though then doesn’t that create a
need for more storage a need for more
hard drives which ultimately creates
more waste and then that’s another
problem for the environment well look
there’s two things that are important
here thing one is you know better than
what what you know a bicycle is much
more efficient than a Tesla but that
doesn’t mean that we don’t want Teslas
to compete with SUVs um we are a much
Greener alternative with more Security
in fact than both Bitcoin and ethereum
we have about 500,000 nodes compared to
bitcoin’s 40,000 nodes but actually what
we’re doing is we’re putting used hard
drives back in service when Facebook or
box uh gets to the fouryear end of life
of those drives they get sold to
recyclers and what’s been happening is
far Farmers been buying those and inad
of them going to a landfill or farming
them so you just announced plans to go
public and as I understand it the plan
is to become an exchange a broader
payment system can you talk to us about
what the overall Ambitions are yeah we
believe that blockchain should have
gotten product Market fit in 2017 but
there were regulatory problems and the
functionality that was available on most
chains really wasn’t yet ready for
Enterprise or government adoption our
new onchain programming environment
chisp is very much designed to support
things like Central Bank digital
currencies uh distributed exchanges so
things like carbon credit markets later
equities and one of the things we did
very differently is we’ve taken the
company form to you know Drive the
adoption of a blockchain uh we expect to
build kind of a red hat business where
we’re supporting the adoption of
blockchain infrastructure for the people
who need it and our strategy to go
public is very much a product strategy
for for a lot of companies going public
is an exit for us it actually uh helps
clarify the regulations it kind of makes
it more clear that this is our Equity
versus these are our coins which are a
commodity and it also uh allows our
users to for example use our Equity to
uh Shield themselves from some of the
coin volatility that these coins often
have now there’s been some backlash
against Chia for being a for-profit
company backlash around the timing of
the IPO um chia’s founder Bram Cohen
also the inventor of bit torrent
recently tweeted I’d like to emphasize
we aren’t selling any tokens have raised
money under normal investment terms and
chia is not a security some community
members are being obnoxiously entitled
and should knock it off what’s your
response to the push back well we are
trying we are trying to build a real
community of Civility and actual
interest in the technology you know this
is a 30 plus year opportunity and we’re
no rush to try to be there first what we
want to do is to actually go and solve
the real problems people have things
like being able to transfer money
between banks in two different countries
uh things like sending money home to
Guatemala you know these things should
be easier to do than cash they should be
cheaper than they currently are and
those are the things we’re really
focused on you know there certainly is a
bit of a a gold rush effect where people
want to get in and get in early for Chia
farming and chia farming is very
approachable it’s not super easy not yet
I we’ll make it easier but I think
there’s some frustration and especially
around uh detail which is pooling
allowing people to kind of share their
rewards but we’re going to have that for
people very shortly you say it’s greener
than Bitcoin is it greener than ethereum
to so the thing about ethereum 2 is that
well it’s going to be available in three
months for the last two years uh we
don’t think proof of stake is actually
secure when you start talking about
inter-government kind of uh competitions
uh proof of stake has all sorts of
problems that really Nakamoto consensus
which is what Bitcoin is and which we
are evolved from really fixed um you
know there are problems like every proof
of stake chain is available for 50 .1%
of the value of the chain and if you
were to buy it you own it for the future
uh where like Bitcoin or Chia can
recover from a 51% attack and keep
going now obviously there’s been a lot
of volatility in the crypto Market in
general but there’s the Chia coin itself
has been super volatile since launch
what do you make of that well I think it
was trying to find a price uh and you
know I think it has now found a price if
you kind of look at over the last two
weeks it’s been in a call it $600 to
$1,100 range in crypto that’s a narrow
range for other folks that’s not as
usual a range that they’re used
to so I I do want to ask you one last
question about Elon Musk you mentioned
Tesla earlier and obviously Elon Musk
has had a lot of influence on price
fluctuations over the last several weeks
do you think that’s a good thing or that
is that
unhealthy well you know I think at least
Elon was looking at the right issues
which are that cryptocurrency is uh the
way of the future but that there are
real concerns around the carbon
footprint that ethereum Bitcoin have
today um but you know I will say it this
way celebrities will be celebrities you
know we’re very much more focused on
actually getting this blockchain adopted
by real users so you think he’s just a
celebrity well certainly not in the
rocket business or in the car business
or the solar business but in the
blockchain space uh you know uh I lik
the joke uh he once tweeted that uh he
wanted blockchains to be 10 times faster
and 10 times cheaper and I’m hoping that
my plaid Model S is going to be 10 times
cheaper
too but the answer to the question of
environmental sustainability is not the
only key to success China keeps
providing environmental reasons to
introduce more
regulations and above all which
countries are leading in this
respect is finding an answer to the
environmental sustainability part of the
piece really crucial
here good morning thanks for having me
on the show it’s great to be here honey
and you know I think this is a really
important question for for all
Industries uh and and you know crypto is
no uh is not excluded from that Set uh
you know we don’t stand alone so you
know I think the the really interesting
thing about crypto is that it’s a it’s
an almost kind of um marginal efficiency
uh maximalist so it is seeking the
lowest sources of power and and we know
that Renewables are so you know the
latest stats that I’ve seen of that um
crypto miners uh in particular Bitcoin
mining which has the most impost um is
is in the 50 to 60% range for use of
Renewables which is well above you know
industry averages that being said it’s
is a long way to go there and and I
think it is a key part of the story for
crypto because you know this latest uh
band from China which you mentioned one
of several that we’ve seen um it’s you
know that’s driven I think from from
maybe they’re tied up but I think you
know the the China van is is it’s part
of a bigger story uh for China in
general and and it’s something that
we’re you know obviously not happy to
see but but from the energy point of
view um what that has meant and the
previous bands in China for mining you
know earlier this year has meant that
mining has moved offshore it it’s now
you know accounts for only 45% of mining
is is in China and that will likely uh
likely reduce over time and and the more
that mining moves offshore out of China
and the more that it moves into places
where there’s faster and faster uptake
of Renewables uh and uh that the US is
is one of those locals uh we’ll see that
that Energy Mix Change for for crypto uh
and the last thing I’ll say on this is
that um the the different blockchains
that exist out there you know Bitcoin is
one of them um you might have heard of
ethereum I’m sure um these are they’re
looking at alternative ways to uh secure
the network and and so proof of stake
which is a it’s a different method for
for uh securing these transactions and
securing the distributed Ledger it a lot
of new technologies new coins and
existing coins are transitioning to this
type of methodology and I think that
will have an
impact yeah I was going to ask you about
proof of stake because even with the
proof of stake blockchains they’re not
created equally right ethereum actually
ranks pretty poorly out of some of the
others is it really kind of the
environmental savior
here it’s part of the story I think the
main uh that the the the Savior here is
is uh generation needs to change to
Renewables and and uh crypto will move
uh even faster because we know that you
know renewable energy is the cheapest
source of energy now and and every new
project in fact there are some
Australian projects that that are really
quite interesting modular mining
projects they’re part of the they can
actually empower the energy transition I
think you know crypto being something
that uh can be located crypto miners
that is can be um located on site uh
we’re seeing projects that are you know
uh setting up on site dealing with
access access Supply you know we’ve got
access supply issues in Australia when
it comes to Peak Peak solar in the
middle of the day and you can um
leverage some modular consumption here
so so bitcoin’s not not just the enemy
it’s part of it’s part of a transition
and it’s quite an interesting tool in
that but the real issue is Generation
and we’re seeing that change and I think
crypto will follow we have seen this new
experiment of uh crossborder uh digital
currency by the bank of international
settlements not to mention the monetary
authorities of China and Hong Kong what
will digital currencies do to other
crypto
assets it’s a really interesting
question because you know we’ve we’ve
seen the announcement recently that you
know uh platforms like Twitter uh have
have added crypto to their to their to
their Network um you can tip tip people
on on the platform using using Bitcoin
uh and there was some really interesting
videos showing showing people uh tipping
uh cross border so all of a sudden you
know Twitter is now a a a crossborder uh
payments platform as well as a social
media Network and and that’s the power
of of blockchain and and crypto it’s
native to the internet and it can plug
into any app so I think that the rise of
Central Bank digital currencies is also
that something interesting that but what
what has been proven over the last 12 to
24 months um by the rise of uh stable
coins and the use of crypto and crossb
flows is that it’s it’s a superior form
of money it it it works better in that
in that context and so you’re going to
see uh central banks take use make use
of that technology you know uh it’s a
new internet it’s a new rail so so these
things will coexist unfortunately in a
place like China they’re trying to
enforce uh one one type of currency
we’ve SE we’ve seen the attitudes to
Tech in general and that’s unfortunate
thing for I think for emerging
businesses and and the Chinese Community
there who are who are so quick to
embrace new technology right so you know
crypto and and and Central Bank digital
currencies will coexist in the future
when it comes to embracing new
technologies uh developing their digital
currencies and perhaps the development
of regulations as well which countries
are
leading uh I mean look we we’re a
kraken’s a really proud us doy business
and we have a a footprint here in
Australia we’ve got a local footprint
here and in many other countries and and
different countries have different
flavors and the regulatory framework is
is something that’s um that chips and
changes and and so and that and that has
a big part to play in terms of adoption
right now if you’re GNA if you going to
tell me who who the most um uh Advanced
uh crypto bit uh countries are you you
can’t not mention um countries that have
adopted it as legal tender like El
Salvador but you know there’s there’s so
much Innovation coming out of of Europe
coming out um of Switzerland where
there’s a lot of uh domiciled
foundations for some of the the the most
interesting Technologies the US has a
huge amount of vibrant and exciting
projects it it’s a it’s a global
technology and and and where the people
are where the people are is what matters
and interestingly there’s some
fascinating projects coming out of
Australia as well for most of 2020 the
Chinese government was tightening its
grip on cryptocurrency Exchange
activities within its border as part of
an ongoing campaign to fight money
laundering and fraud in August the pboc
announced its intention to block over
100 foreign websites offering crypto
exchanges the problem facing China’s
crypto industry in 2021 began in May
when the state Council doubled down on
previous crypto policies by calling for
restrictions on crypto Mining and
trading previously provincial
authorities in the inner Mongolia Shing
Jang and suan provinces all of which
were major Bitcoin mining hubs had begun
to introduce measures restricting the
operation of Bitcoin miners similar to
the prosecution of crypto Exchange in
2017 Bitcoin miners were forced to
either permanently stop operating or
relocate to other crypto friendly
countries since around 50% of the
world’s Bitcoin mining output was
generated in China before the ban the
global Bitcoin economy filled the impact
of China’s Bitcoin mining ban as
expected just give us your take about
Beijing walking away from crypto
assets well good morning and thank you
very much for having me well even if you
take it aside from the whole crypto
issue I think as a soft power move this
may perhaps be a misstep from China um
as countries uh you know that are trying
to be within its sphere of influence if
you look at that of El Salvador if you
look at La if you look at Afghanistan
those are all countries that are moving
towards the use of cryptocurrency just
as China is pulling back now where
that’s concerning for the Chinese is
that they’ve put so much effort into
their soft Powers um you know their
Outreach that they’ve been conducting
globally particularly if you look at
their efforts that they’ve done in Latin
America and as they’re pulling back and
these countries and regions are moving
in that’s going to cause a problem for
them down the line yeah we have seen
even FTX exchange uh decision to move
its headquarters from Hong Kong to the
Bahamas uh those moves to Lam as you
mentioned what does this mean
practically speaking for all of these
companies that have relations with China
Chinese users as well well that’s true
if you look at um both HBY and okx OK
exchange to well-known behemoths from
China that trade in crypto we saw the
impact on their token in trading over
the weekend both experienced
considerable drops in value
and and certainly for companies that
have that exposure to China with Chinese
clients we’ll be scrambling over the
weekend and onwards to try and withdraw
their positions it is of deep concern
for anyone with that level of exposure
but I think what’s important is to frame
it within the crypto industry itself the
industry has proven its robustness time
and again this is the second time this
year that China has effectively tried to
ban crypto and the fourth time since
2013 yes absolutely the industry saw a
drop off in bitcoin price in June when
the last uh ban came through but we can
see what happened in the months
subsequent and if you look at trading
over the course of the weekend in
Bitcoin yes there was an impact as you
would expect but we’re also reading off
the back of what’s happening with evergr
and The Wider um implications there what
instead this tells us is further proof
of the robustness when it comes to
cryptocurrency particularly as it takes
its place on the global stage so I think
that um for us we’re looking at what
happens in China with great interest but
equally and with certain measure we’re
looking at what’s happening out of the
US and where they’re taking their
regulation particularly considering how
you the pivot that we’ve seen over the
course of this year Westward towards
Bitcoin mining and regulation overall so
yes absolutely if I was a company that
had exposure to China and I was related
to to cryptocurrency I would be
concerned however for the rest of us
Wier industry we’re rolling with the
punches and Caroline you take a look at
the long-term uh Trend Direction when it
comes to bitcoin right we’re still
pretty far off the all-time high of
above
60,000 uh do you see that market
recovery and how much of it has really
priced in the news out of China given
yes it is more severe but we have been
hearing variations of this sentiment
since about
2019 yeah absolutely I think you I think
the price dip that we saw is probably
indicative I mean there was it was less
than 10% I think I think between five to
7% drop off over the weekend in the
price but counted that then with the
other news that came out with regards to
Twitter where has said it will now allow
its users to send and receive Bitcoin so
while you’ve got the negative coming out
of China you also on the other hand have
got 330 million Twitter users who will
now be able to use Bitcoin um as part of
their social media transactions so it’s
certainly you know kind of climbing it
in its ascendancy do I think we’re going
to see the $60,000 Price Point again the
trend would suggest that that’s a
direction that we’re heading in do I
think over the longer term that we’re
going to see the use case for Bitcoin
absolutely but I think anyone would be
um rather fool Hardy to say that this is
it this is the one and only I think that
time has shown Us in history and human
civilization has shown us that we like
to change what we use as a method of
value exchange and certainly I would
imagine that for Bitcoin there’s going
to be many Pretenders to its
Crown so when it comes to Australia of
course there’s been lots of criticisms
from within the crypto industry that
regulation or I guess a nurturing
ecosystem has fallen behind compared to
other places like Singapore or even
parts of the Middle East right do you
expect there to be a more fruitful
conversation about cryptocurrency or is
there a chance that we’ll see some of
these jurisdictions taking China’s
lead well this is the real opportunity
for Australia and this is certainly a
message that the industry has been
trying to deliver to both government and
Regulators um and we wait with interest
to see the report that’s due to come out
from the Senate um this month actually
sorry in October next month this is the
real opportunity with China retreating
from the field there is a chance now for
countries such as Australia to really
step forward we’ve also got the
opportunity when it comes to kind of the
green um mining of Bitcoin with all the
green Energy Solutions that are
available here if you look at the
opportunity for example that Iran has
taken it now contributes 4.5% of Bitcoin
mining globally according to figures
reliefed from litic that shows the
opportunity that is there that other
nations are stepping forward but we then
have to ask ourselves do we want this uh
to come out of countries such as Iran El
Salvador Etc or do we feel as though
there’s an opportunity for Australia to
step forward particularly when you look
at other um local countries to us here
in Asia Pacific you look at where
Singapore has been going um in
particular which has been very much a
beacon for the industry I think there’s
there’s opportunity for greater
partnership collaboration and supposed
to find the Australian way forward with
this um and certainly you know that’s
something that industry is very strongly
pushing forward China also trying to
hammer down on some of the crypto mining
How do prices
respond um it has been an incredibly
volle week for for Bitcoin and this
latest news from China just really
hammered it again um it’s the second
time this week that news out of China
has really impacted the
cryptocurrency um first with it saying
that it um wouldn’t allow financial
institutions to to use it and we’re
going to crack down on it more and now
with this latest news about cracking
down on mining and it’s it’s really
thrown the cryptocurrency for another
loop yeah I mean this is testing a lot
of folks out there uh and good thing
crypto doesn’t trade on weekends
right trick question it’s a trick
question I wish that go
ahead oh just I I wish that uh that
cryptocurrency um took a break on the
weekends but yeah it’s uh continuous to
trade and so this weekend we might even
see um more volatile moves just given
that usually on weekends um there is
lighter volumes and so sometimes we see
even more volatility then Claire we love
though that it trades on weekends that
means that you as a reporter have a job
on Saturday and Sunday which we know
that you love talk to us though about
just in terms of how we think about this
going forward when you get comments from
China any little pause really makes the
currency or the crypto space so volatile
what does this mean really going
forward well it seems like the only
thing that’s certain is that you know
volatility probably will continue for
Bitcoin um from what I’ve heard talking
with investors is that around these
movements with Bitcoin it it does impact
the broader Market in a way obviously
not the main factor but I think it’s
hard for um investors trading stocks and
bonds to see how Wild Things Are with
Bitcoin and not be impacted somehow and
so we have seen a bit of a um riskof
mood sometimes when Bitcoin is getting
hammered um and that could continue I I
am curious though we I mean we have seen
the correlations particularly this week
and last week are really sort of move in
lock step with regards to crypto and
then some of the other risk assets like
equities here and there are a lot of
people that used to talk about how
crypto could sort of be a hedge to some
of the normal Equity Market volatility
here if this cor if this correlation
sort of persist here is that going to
create maybe a little bit further of a
ShakeOut is anyone talking about that
yet a little bit I think the the main
thing people are focused on is inflation
and are very much looking at signs of
that and you know there’s a question of
how does Bitcoin react when we see
further inflation um obviously we know
that Tech doesn’t like measures of
inflation
Rising um but it’s I I think the idea of
Bitcoin as a hedge is still sort of
evolving and people are trying to figure
out um what its price movement is
correlated with most
[Music]
often as if banning Bitcoin mining
wasn’t enough Chinese Regulators decided
to ban crypto trading completely in
September unlike previous bans on crypto
transactions the country’s Central Bank
in cooperation with nine other
government agencies including the police
and the the Supreme Court eliminated all
doubts about the country’s attitude to
cryptocurrencies leaving absolutely
nothing for
misinterpretation The Regulators have
classified all crypto transactions both
from crypto to crypto and vice versa
trading and Investments as illegal
regardless of whether they were
conducted through local or foreign
platforms this includes all Bitcoin
ethereum and tether transactions Chinese
Nationals working in marketing or
technical support for foreign exchange
may now phas prosecution the ndrc has
outlined plans to exit crypto mining
completely by seizing investment in the
sector increasing electricity costs and
denying new companies access to the
industry as Katie mentioned we’ve seen
this story play out somewhat before not
too big of a surprise still is this a is
a pretty big setback for the crypto
Community you’re right and thank you so
much for having me on this is not the
first time that Chinese Regulators have
made such a statement previous attempts
to Outlaw crypto really went nowhere I
do think that it’s notable because it
comes not long after the miners fled
inner Mongolia so there’s a bit more
Dynamics at play I think in regards to
price action and some of the the deeply
rooted fundamentals regarding the mining
and so Stefan I’m curious if you look at
the price action today you saw Bitcoin
drop close to 9% but you saw other coins
really drop a lot more I mean if I look
at ether I think it got close to around
11% or so I’m curious why Bitcoin was
the relative outperformer this morning
is it somewhat of a Haven at this
point I think it’s very reasonable to
think that uh that Bitcoin is is a Haven
I also think that uh you know there’s
much more of a fundamental thesis around
Bitcoin it’s more mature asset so to see
it find kind of fundamental support you
know is more is more understandable
people do have Financial metric sorry
fundamental metrics they apply to
bitcoin so they have their levels much
more so than I think they do in some of
these altcoins that are a lot newer you
know they’re based on you know highly
speculative use cases etc etc so I I
think it makes sense in these sell-offs
that uh you know BTC which is uh you
know which I think you could make a lot
more fundamental Arguments for fines
support sooner and so Leah just again
focusing on the price action so even
though this wasn’t new news you did see
Bitcoin and other cryptocurrencies react
we are heading into the weekend and we
know that the crypto markets are wide
open during the weekends and that it
tends to be a volatile time what are you
expecting what could we be uh waking up
to on on Monday
morning yeah absolutely well assets
appear to have found a floor but as you
mentioned weekends tend to be volatile
and how they react is definitely
anyone’s guess but you know to your
point you know Bitcoin did drop about
10% before finding resistance at about
40,000 recovering to about 41,000
as mentioned each sold off about 10% as
well remains well below 3,000 and those
other old coins are down even more
however cardano did seem to Surge higher
on the news which is quite interesting
so I I think that it’s it’s maybe
anybody’s guess but we’ll have a fun
weekend for sure savan I’m I’m wondering
about what this means for the
opportunity that other countries have if
China’s cracking down could this be a
good thing for other
countries yeah I mean I think that there
was I think one of the confusions around
the Chinese crypto Crackdown is that a
lot of you know about a year ago there
were a wave of crypto proponents that
suggested due to China’s move into the
digital Yuan and the fact that they move
that ahead very quickly that they were
Pro crypto I mean I really don’t believe
that that’s ever been the case I mean as
as we know China’s been trying to crack
on in crypto since 2013 they’re a
country with strict foreign exchange
controls and for an asset class like
cryptocurrency which is promising more
Financial Freedom you know they’ve
always disliked it so you know I don’t
think that this I I really don’t think
this is an incremental shift in terms of
the opportunity set because China’s
never wanted to be in crypto but perhaps
it’ll change the perception in the US as
you mentioned earlier that hey you know
this is something we can get ahead of
China in and maybe that will be
something that uh that that pushes
Regulators to have you know more
favorable regulation towards the crypto
companies um but yeah I don’t think that
I really think that this is a rehash of
Prior of Prior statement regulations you
know as Leah suggested so I I I’m I’m
not seeing this is changing the
opportunity set and in fact you know I
think the bigger news of the day was
probably positive which was uh which was
the Twitter launch well yeah go go ahead
ktie no Tim you go ahead why why Stefan
talk a little bit about that this idea
that you can actually tip using Bitcoin
and through through your Twitter account
yeah well I mean I’ll think if you if
you came yesterday we should know yeah
and exactly within last kind of 24 hours
it’s been enabled I mean you’re talking
about if you’re we’re thinking about
fundamental incremental increases in in
Bitcoin usage right so we’re saying that
you know people in China who have been
finding ways to use Bitcoin haven’t been
allowed to so call that flat no change
there and now we’ve got this uh you know
this very well-known high profile firm
that’s you that’s applying Bitcoin for a
real use case I mean it’s it’s
definitely incremental to its utility
value as somewhat of and in addition to
that you know there’s the there’s so
many different Arguments for Bitcoin the
store the store value payment mechanism
this is kind of a you know A New Concept
and uh I think it’s very interesting and
and you know as leam mention as leam
mentioned we we seem you finding some
support here and perhaps you know those
those positive thoughts will prevail and
Leah speaking of use cases speaking of
other countries I want to quickly get
your thoughts on El Salvador because
Bitcoin is actually legal tender in El
Salvador and I’m curious if you have
countries such as China really trying to
ban crypto entirely it’s another
country’s legal tender how how is that
going to
work yeah very nuanced indeed I I will
just note Stefan I agree with you I
think it’s very exciting indeed that uh
that Twitter integrated not only just
Bitcoin tipping but also lightning um to
your point Katie this is interesting I
think because the saber rattling from
China comes at a time when the digital
wand is starting to gain Traction in
regards to what you’re saying about El
Salvador and why that matters um again
the problem with declaring Bitcoin
illegal is that it’s El Salvador’s
National currency and people who conduct
business between the two countries may
be doing so in Bitcoin um so I think
that following El Salvador’s move to
make Bitcoin its National currency a
number of other nations including Costa
Rica have been making similar moves and
statements uh a number of other
countries including Ukraine and Cuba
have either passed crypto regulations or
in the case of Panama and the US are
signaling that those rules are soon to
arrive so you know I think what it comes
down to is markets have been made and
there are profits to be had I think it’s
very hard to Outlaw cryptocurrencies on
a global
scale despite China’s severe Crackdown
the country has remained an important
Global crypto Market Chinese crypto
wallets have received coins worth around
$150 million so far this means China
remains second in the ranking following
the US according to a report by
analytics provider China
analysis Henry arsenian crypto leader at
PWC said most crypto exchanges overseas
still do not accept customers from the
US now exactly the same exchanges may
have to ban customers based in China as
well for most Global crypto exchanges
accepting customers from China has
always been a great market now that
ambiguity has been
[Music]
eliminated but even if large exchanges
are forbidden to China based Traders the
decentralized structure of the exchanges
makes it very difficult to stop people
from holding anything in any country
Arslanian said the pboc is also
preparing to launch an official digital
remb making it a Pioneer in this
[Music]
field the currency is to be launched in
a trial run during the 2022 Winter
Olympics Jason Guri head of digital
Investments at asset manager wisdom Tre
in Europe said China’s attempt to ban
cryptocurrencies is just a continuation
of a trend but there are intensif buying
the rhetoric ahead of the launch of the
digital reming
[Music]
B eth Yung a partner at raise Capital
talks to Bloomberg Technologies Emily
Chen about future strategies for
investing in China as the country faces
turbulence and how the recent Crackdown
can be a good thing for the crypto
ecosystem in the long-term
[Music]
perspective I’m curious for you as an
investor how this China check Crackdown
is impacting your strategy and where
you’re putting your
money well personally I take a very
long-term view on on China and obviously
new hearing all these crack Down News
China on a daily basis almost but I do
want all investors to keep in mind that
China is the second still like the
second largest biggest Market in the
world over 1.4 billion people 15
trillion GDP um especially what I focus
on in the Venture space just look at
sequa China they did 96 deals in the
last last 90 days so things definitely
are not slowing down per se but having
said that of course everyone in China
needs to play by the rules doesn’t
really matter that you Alibaba mwan or
DD or even the bboc or the cic um no one
can really outsmart outplay Chinese
government but having said that
particular on spack and exit um really
great to learn what’s the latest going
going on with SPC um actually one of my
portfolio company called DayDay cook um
mainly operates sort of The Taste mate
of China um they are actually going um
on a spec on NASDAQ very very soon merg
with Ace Global um that is still
happening so in in some sense I think go
ahead would you say would you say have
you changed your strategy at all given
the China Crackdown are you putting in
just as much money as you would have or
are you changing where that money
goes um I really want to go back to
China because of Co I’ve been here for
two years now and not able to go back
really makes it really really tough for
me to invest in China um mostly from a
raise Capital strategy is to focus on
early stage put in early and support on
infrastructure software um right now the
world is so big and everybody really
work distributed and remotely so it
doesn’t really matter they in China or
not but I have to say that most of our
reinvestment lately has been mostly in
Silicon Valley we invested in uh data
bricks we invested in FTX those are all
super Global and go to market in both
World well it’s interesting that you
mentioned FTX because they recently
moved their headquarters from Hong Kong
to the Bahamas in part because of this
Crackdown and so I guess I’m curious
over the long term how do you see this
playing out in China I mean do you see
the Chinese government easing up on some
of these restrictions or um if this is
you know
longterm strategy how do you think that
impacts the tech ecosystem there long
term I think Tech ecosystem need to play
by the rules it doesn’t really matter
how big you are you have to comply by
Chinese law and especially recently with
this year the data privacy Protection
Law is key key thing I think as an
investor you need to be aware of that I
don’t think we should drift our
investment strategy just because what’s
happening in China but it’s something
that we have to keep in mind there is
certainly still tons of upside because
the market is so big but then at the
same time there could be some ceiling
because what’s going on um I do think
that there’s certain industries
particular more more interesting for
Venture particular on the S conductor
and health care because it’s not really
as close to data um consumer data which
is very very sensitive in China so
therefore um being an investor you just
we just need to super Nimble and pay
attention to what’s going on in China
and what about crypto in particular I
mean you know trading mining in China
has become illegal so is crypto a more
extreme example how do you see the
Crackdown there in impacting the broader
landscape and
investing so China always have a love
hay relationship with crypto um and in
2008 um that’s when I was still going
back to China food FL for Force China
was the number one in terms of crypto
Mining and was the number one in terms
of crypto trading and since 2018 uh 2017
they banned Ico 2018 they B banned Fiat
to crypto um trading which then then you
started to see binance crypto to crypto
trading in 2019 until today um crypto
mining is all banned so in that sense
the biggest differ I do wanted to point
out is that when the first correct end
happened it really impacted Bitcoin
prices to about 3,000 today according to
um you know coin gecko it’s about
$555,000 of equivalent for Bitcoin so I
think the the Crackdown in China on
crypto in some sense is rebalancing the
crypto ecosystem and longer term is
actually a good thing um for the
blockchain ecosystem because now China
influence is actually getting less and
less
in recent years it has become clear how
resolutely China is acting against
Bitcoin and other
cryptocurrencies while the policy of the
People’s Republic with regard to BTC was
characterized by waiting and watching in
the first few years the negative
attitude seems to be manifesting itself
more and more due to the increasing
popularity of crypto numerous sources
point out that this could have something
to do with fighting possible capital
inflow
in addition it has been known for a long
time that China is working on its own
digital currency which is centrally in
the hands of the authorities and is
supposed to function in principle like
conventional Fiat money only
electronically as a news agency DPA
reports the digital uren is far advanced
in its development and is already being
used in some areas it is therefore not
surprising that the Chinese government
is doing everything it can to ban crypto
competition
even during the pandemic of Corona virus
the Chinese government continue its
opposition to bitcoin and other
cryptocurrencies and intensified its
Crackdown on illegal crypto
activities it has always claimed the
fight against fraud and moneya
laundering as the reason for its intense
action more and more foreign websites
have been blocked by crypto exchanges to
prevent domestic investors from Trading
cryptocurrencies and thus protect them
from the risks of unregulated trading in
cyber
currencies even though crypto currencies
always react to every event described
here with strong price fluctuations
bitcoin’s Rising Trend seems to be
unbroken we will have to wait and see
whether it continues to do
[Music]
so

The Economy of China & Digital Money – China declares all transactions with cryptocurrencies illegal.

The Economy of China & Digital Money (2022)
Genre: Documentary
Running time: 69 min
Release date: 2022

Synopsis:
In many areas of industry, China is one of the leading countries. However, the country does not seem to be open to all new technologies. The crypto industry with its miners is a thorn in the side of the economic power. China has banned all crypto transactions and also announced to stop mining of digital assets – the hardest blow against the industry so far. Moconomy analyzes and discusses what this means for Bitcoin and for the whole crypto industry with industry experts like FalconX, eToro, and Kraken.

Chapters:
00:00 – China bans cryptocurrencies.
03:10 – What happened and how bad is it! Eddie van der Walt an initial analysis.
12:39 – FalconX – How badly are ICO’s affected?
18:10 – Yoni Assia, Founder of eToro. Crypto cannot be regulated as it is global.
24:04 – Bobby Lee, CEO Ballet. How much is crypto hardware, such as wallets affected?
31:02 – Chia Green Token, Can an environmentally friendly token save crypto?
35:32 – Jonathon Miller – Kraken, Are renewable energy sources the key to success?
42:53 – Caroline Bowler – Where do we go from here? How will the market evolve?
Leah Wald (CEO, Valkyrie Investments) and Stephane Ouelette (CEO, FRNT Financial) – Will Bitcoin and China survive the technology battle?
01:01:11 – How are Chinese companies dealing with the ban?

Music:
Finding Movement – Kevin MacLeod
Future Rennaisance – Godmode
Ishikari Lore – Kevin MacLeod
Sao Meo – Doug Maxwell_ Zac Zinger
Spring Thaw – Asher Fulero

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► Crypto: https://bit.ly/3ncUdtn
► Bitcoin: https://bit.ly/3h9ok0W
► All Playlists: https://bit.ly/3zSmUis

#cryptonews #blockchain #bitcoin

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