Bitcoin price has now tanked by more than 50% from top to bottom, assuming that the bottom is in. The storm of pain for investors has come due to a series of FUD, capped off by China’s strictest stance against crypto yet.
A high ranking member of the People’s Republic of China has proposed a crackdown on mining in the region, which has sent prices tumbling and miners scrambling for a new home. Here’s why this storm of bad news is actually incredibly bullish for Bitcoin, even though at the moment it is causing a correction across the market.
Bitcoin Crashes Over Continued Energy And Environmental Crisis
Only a month ago, Bitcoin price was trading at more than $60,000 per coin. This past week the top cryptocurrency per market cap crashed abruptly to half of that. Thus far the halfway point, a key Fibonacci retracement level, has been holding.
The sell pressure is coming due to the cryptocurrency’s potentially harmful impact on the environment. The concept was only recently brought to the forefront of discussion by Elon Musk.
Related Reading | Elon Musk Doubles Down On Bitcoin Energy Concerns
The CEO cited it as the reason Tesla would drop supporting BTC as a payment for EVs, only one full month after introducing the support.
Energy FUD only got worse from there, as the Chinese government is planning to crack down on miners in the country – a region where its said the majority of Bitcoin mining is centralized.
The top crypto by market cap plummeted as environmental concerns spread | BTCUSD on TradingView.com
How The China Crypto Crackdown Will Benefit BTC In The Future
The situation has caused miners to sell coins to fund a potential move to other, more supportive countries, or revamp operations entirely. Selling and uncertainty could stick around for some time, but according to VP of Global Business Development at Bixin Mustafa Yilham, it shouldn’t deter crypto.
Instead, he claims this is a “massive opportunity” to decentralize Bitcoin mining further, and nothing about the cryptocurrency fundamentally has changed.
Related Reading | Why Bitcoin Is No Longer For Everyone
One of the biggest arguments against Bitcoin and considered a potential threat to the network, was the fact that so much of mining operations globally were centralized in the communist country.
Bitcoin mining becoming more decentralized strengthens the network for all participants, and if anything will improve the cryptocurrency’s fundamental strength. It might just suffer some more growing pains before new growth is ready.
The fear, uncertainty, and doubt might hang around for a lot longer than investors would like. However, the more governments try to crack down on crypto, the more decentralized it becomes and with that, the more difficult it is for governments to derail it.
Featured image from iStockPhoto, Charts from TradingView.com
