Why China’s cryptocurrency ban is an opportunity for India?

But then, as puzzling as this may sound, the cryptocurrency market is expected to continue its bullish breadth, and nearly all players, including Bitcoin, Ethereum, and more, are expected to emerge unscathed. Despite the ban emerging at least three weeks before this discussion, Bitcoin sits comfortably at over $ 68,000, as we speak, bracing for the next upward move.

Let's Track China's Cryptocurrency Elimination Timeline
As a strong economy, China began imposing restrictions on crypto transactions dating back to 2013, when the PBOC (People's Bank of China) prevented banks from sanctioning and even engaging in Bitcoin transactions.

Four years later, payment gateways that allowed crypto transactions were banned, and even speculative trading underwent prying scan. Yet 2021, so far, appears to be the most restrictive year for cryptocurrencies in China, as the country banned cryptocurrency mining in June, sent ominous signals in July, and eventually subjected the entire space to something akin to a total ban. , restricting all activities, within or even outside its borders, as long as they serve the Chinese population.

It's already November, and while the global crypto space appears to be reveling in the glory of the $ 3 trillion market cap, China-based crypto exchanges are shedding their digital assets. What irony, right?

But why is China hell-bent on putting cryptocurrencies on the ground?

Isn't it a calculated strategy to deflate the prices of cryptocurrencies and then buy them on the drop? As much as this sounds remotely possible, there is something else.

The growing ban on cryptocurrencies in China can be attributed to a number of reasons. In short, China wants to eliminate any competition to its regulated, monitored and blatantly centralized Digital Yuan. But the jarring announcement on September 24, 2021 seemed like a desperate move to do away with anything decentralized and transparent.

But that's just being proactive, right! For now, China is justifying its stance of curbing the increasing consumption of electricity resulting from crypto mining. Surprisingly, the reason seems justified enough as in 2019, with China alone contributing nearly 75 percent of Bitcoin's total energy consumption. The number fell to 41% in 2021 and is expected to drop further.

Still, this justification hardly seems persistent enough, as various green cryptocurrencies like Chia, IOTA, and Cardano are slowly emerging, with lower specific energy demands. Added to this is the new concept of 'green Bitcoin mining', which suggests that 56 percent of the world's mining energy in the first quarter of 2021 was derived from renewable sources.

Well, this makes all the specific electricity uplift in China nothing, right?

Evidently, China's coordinated attack on the crypto market is supported less by facts and more by a willingness to exercise complete control over financial activities. Furthermore, the timing of this ban could not have been better now that the country is already doing its best to unseat Bitcoin with its government-backed internal digital currency, eCNY.

How will these restrictions benefit India?

To be honest, the only way India benefits from China's crackdown on crypto is by being progressive. Encouraging crypto transactions, mining, NFT adoption, and even ICOs will play a critical role in driving the crypto craze in the country.

Also, by the time you read this, NFTs from a leading Indian tea maker and Megastar Amitabh Bacchan will be available. If that's not encouraging, we don't know what is.

Furthermore, China's stern stance towards cryptocurrencies proved quite gratifying to Indian or global investors, giving them multiple buying opportunities. And with top crypto players creating new ATHs, things have never been more encouraging.

Furthermore, the intensification of China's crackdown pushed the prices of Altcoins like Litecoin lower by a significant margin in September, offering Indian investors several value buying opportunities. But that's just scratching the surface!

The basic set of benefits is much more pronounced and requires foresight. China, which bans digital assets, has already forced several miners to move to other countries. And with major crypto exchanges like Huobi having to abandon Chinese users, the Asian crypto giant will inadvertently head towards India.

As long as India softens its stance towards cryptocurrencies and becomes more accommodating to miners, we could see an influx of crypto-minded nerds and colossal gamers in the country.

The influx of miners followed by sentiment-driven price drops is expected to do well for major crypto exchanges, and traders and investors find this scenario timely enough to enter Bitcoin or Altcoins in the long term.

In hindsight, India has the potential to become a crypto magnet, and this latest move from China is the main precursor to growth, jobs, and financial opportunities.

ET Spotlight Special

But what about panic sales?
Like any other asset class, even Bitcoins and Altcoins saw massive sales once China's point of view came to light. There were quite a few Indian investors hastily squared profitable positions in Altcoins. However, that passing scare wasn't serious because the crypto market is already valued at $ 3 trillion.

Therefore, the sell-off was actually a way to liquidate cash reserves and generalize crypto investments. This is exactly what we expect even in the coming months, which could be instrumental in fueling the cryptocurrency renaissance in India.

Furthermore, China's position would fade over time.
Honestly, it is difficult to regulate something as innovative as cryptocurrencies. Furthermore, since the internet is the breeding ground for cryptocurrencies, China will have to do much more than label it illegal to deter domestic investors.

And what is encouraging to see is that as China continues to chain cryptocurrencies through the distribution of censored bans, the popularity of this decentralized, transparent and immutable concept is increasing around the world at an incredible rate, escalating far beyond the momentary FUD. (Fear-Uncertainty -Doubt).

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