Here's What China Really Means For Bitcoin

It seems that the Chinese impact on bitcoin isn't going away anytime soon. Well, that's not technically true. From a fundamental buy and sell perspective, Chinese input is slated to almost completely disappear by September 30. However, the fallout from this is likely to last a little bit longer.

During the evening yesterday, we got a couple of Tweets from some pretty big names in the industry confirming Chinese action.

The first was from Simon Dixon, cofounder of BankToTheFuture, which is invested over $175 million in FinTech:

“I believe the next announcement is coming shortly with the other exchanges in China closing.” Simon Dixon (@SimonDixonTwitt)

The second came from Nejc Kodric, cofounder and CEO of Bitstamp:

“Highly likely that more exchanges will shut down in China. Possibly all of them.” Nejc Kodrič (@nejc_kodric)

Both seem to suggest the above-mentioned September 30 deadline and the price of bitcoin is sliding dramatically on the back of each development. At last close, we were sitting just above $3000 apiece.

So what does all this mean in the long run?

Well, if the Chinese market is removed from the equation, which is highly likely given that it will now become incredibly difficult for Chinese individuals to buy and sell bitcoin without exchange, it's also going to remove a large portion of the volatility associated with bitcoin right now. Longer-term, this is good thing. While the Chinese are exiting at the moment, it seems bad, but this is a temporary blip.

Also, consider if the Chinese government should stand mining operations. This will translate to an immediate supply constriction and should serve up some upside momentum. It could even be the catalyst that drives a recovery from current levels.

The bottom line here is that we are seeing markets panic but this is nothing that we haven't seen before. Anybody looking to pick up an exposure at a discount can do so in and around current levels, and while that may be further depreciation to come near term, a bottom will soon be found.