Friday, February 3, 2023

Gong Xi Fa Cai! Bitcoin Tops $10k Again as Chinese Year of the Dog Begins

Gong Xi Fa Cai! Bitcoin Tops $10k Again as Chinese Year of the Dog Begins

It’s like December 2017 all over again as the bitcoin price climbed back over $10,000 USD after a deep slump over the (Western) new year period. Does the boost — coincidentally on Chinese/Lunar New Year — signal a recovery as millions of East Asian investors get back to business once more?

Also see: Automata Podcast: Why Bitcoin Philanthropy Is Still Challenging, With Connie Gallippi of BitGive

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Chinese Year of the Dog Begins With a Bitcoin Bump

At press time, BTC sat at $10,183 USD on Coinbase and $10,244.85 on the Bitsonline/BitKan price index.

Bitsonline Bitcoin Price Index chart

It’s been a dark month for bitcoin, and cryptocurrencies in general. After shocking even the wildest optimists with a rise from $9,000 to $19,900 in December 2017, BTC retraced almost as rapidly, before crashing further still and threatening to fall below $6,000 in the first week of February.

Other cryptocurrencies were affected almost as badly, suggesting the panic selling wasn’t due to any technological issue. Even traditional investments took a surprising dive, falling 1,175 points (the biggest one-day point drop in history), almost exactly the same time as bitcoin hit the floor.

Chinese New Year Sydney

What Role Did China Play, and Can It Drive the Recovery?

Analysts pointed their fingers at China — as they’ve tended to do since 2013 — to explain the sudden shift. Some said it was a trading lull in the lead-up to Chinese New Year (Friday February 16th) as millions of Chinese head to their hometowns to celebrate, and commerce can grind to a halt.

Others said it was the Chinese government’s increased hostility towards any kind of bitcoin trading in the country. Local exchanges were all closed for business after October 2017. Although several reopened offshore, there are now frequent rumors that China will attempt to stop its residents accessing those sites too.

Whether they’re successful at doing so or not, trading cryptocurrencies from China is now difficult for all but the most determined and technologically capable. There’s likely no growing amateur FX trading market like Japan’s.

(For the record, Japan started its own Year of the Dog on January 1st, and February 16th is just a regular working day.)

By sheer numbers though, those determined traders might be enough. There are still several incentives to trade cryptocurrencies over “traditional” investments in China and elsewhere — including volatility, the chance of massive percentage gains, and a continuing global mistrust in other asset classes after the past decade.

Is the recovery for real, and is it Chinese? Let’s hear your thoughts in the comments.

Images via Pixabay,

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