Investment Risk Warning

[sylvaC]

As a currency or an investment category, the greatest risk to Bitcoin's future success may be regulatory risk. For example, if China decided to ban its citizens from holding bitcoin, the digital currency would collapse in price. China is currently the largest market for bitcoin transactions, with more than 90% of Bitcoin transactions occurring in China. Therefore, any adverse regulatory changes will have a direct impact on Bitcoin investment in the world.

The same is true for major bitcoin startup centers like the United States and the United Kingdom, whose prices collapse and are unlikely to recover if any of the big economies bar Bitcoin.

In the first week of this year, we witnessed the price of bitcoin breaking the $ 1,000 mark and approaching the highest point in history. However, after the People's Bank of China issued a warning to its citizens to warn investors of the risks of investing in bitcoin, the price dropped more than 20% in just 24 hours after careful investment was required. As China is the largest market for bitcoin, any announcement or action by Chinese authorities will have a significant impact on global bitcoin prices. This adjustment frightened a lot of investors just follow the trend of investment.

This sudden adjustment of 20% reminds people that bitcoin is still a very unstable asset and is only suitable for adventurous investors. If you want to find a stable value or a steady price increase over a specific period of time, Bitcoin is not for you. However, if you are looking for a potential that could double or triple your investment and potentially potentially huge losses, investing some of your investment in bitcoin may be the right choice.

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[Hydrogen]

if China decided to ban its citizens from holding bitcoin, the digital currency would collapse in price. China is currently the largest market for bitcoin transactions, with more than 90% of Bitcoin transactions occurring in China. Therefore, any adverse regulatory changes will have a direct impact on Bitcoin investment in the world.

Here are a few interesting news stories for you.   

Today, China's exchanges report 98% of global volume, a figure that would suggest a huge dominance by its markets.

Unfortunately, we know that most of this volume is fake.

Unlike the rest of the world, China-based exchanges are unique in that they do not charge fees on bitcoin trades. Instead they make money via withdrawal charges out of the exchange. Further, these fees reduce as your trading volume increases, so this incentivizes traders to bolster this figure by buying and selling from themselves at zero cost.

https://www.coindesk.com/estimating-data-china-real-bitcoin-trading-volumes/

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China Is Said to Ban Bitcoin Exchanges While Allowing OTC

September 10, 2017

China plans to ban trading of bitcoin and other virtual currencies on domestic exchanges, dealing another blow to the $150 billion cryptocurrency market after the country outlawed initial coin offerings last week.

The ban will only apply to trading of cryptocurrencies on exchanges, according to people familiar with the matter, who asked not to be named because the information is private. Authorities don’t have plans to stop over-the-counter transactions, the people said. China’s central bank said it couldn’t immediately comment.

https://www.bloomberg.com/news/articles/2017-09-11/china-is-said-to-ban-bitcoin-exchanges-while-allowing-otc-trades-j7fofh20

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There's a question as to whether china banning citizens from holding bitcoin would have more of an effect than china attempting to ban exchanges. Also there's a question as to whether bitcoin has become decentralized enough for china not to factor heavily into bitcoin's price. After exchanges were banned earlier this year in china there wasn't much of a price shift.

Some polls claim 2% of americans have used crypto currencies which factors out to around 6+ million people.

Maybe in 2014 bitcoin would have been centralized heavily enough in china for exchange bans or outright bans to have a huge difference in price but since then it seems bitcoin has become decentralized and distributed throughout enough countries for it to not be as much of an issue.

[jseverson]

I personally think we've already survived the worst out of China, save for a complete ban. An exchange ban is just about the 2nd worst thing that your country could possibly enforce, because Bitcoins are going to be that much harder to liquidate. There was also a lot of speculation then that China was moving for a complete ban, causing a nearly 40% dip. There's no way China can do anything to top that short of a ban.

That being said, why would China ban Bitcoin anyway? They have no incentive of doing so. All they wanted to accomplish was to stop capital outflows, and I'm assuming they've curbed that with the exchange ban.

[BarbusseH]

Many Chinese are passion (gambling, excitement) people. The Chinese government is concerned that they may lose significant amounts of money by investing in a crypto currency.