Bitcoin cultists who believed they had discovered a perpetual money generation shortcut that bypassed the laws of economic reality are suddenly shocked to discover that governments can regulate Bitcoin out of existence. In fact, it looks like China is beginning to accomplish exactly that.
Shanghai-based bitcoin exchange BTCC has announced it will be closing down its China-facing trading operations effective September 30.
In statements on Twitter and on China-language social media, the oldest cryptocurrency exchange platform in the world’s largest market said it would immediately stop onboarding new users, but that its mining pools and international exchange would continue to operate normally.
At press time, the statement is the latest to seemingly confirm China may be on the verge of a broader effort to curb domestic cryptocurrency activity, following yet another report by a local financial news source indicating that regulators are preparing a formal ban on domestic bitcoin exchanges.
Bitcoin prices, of course, plunged yet again, now dropping 25% from its recent high. As MarketWatch reports, $23 billion in Bitcoin valuation just evaporated in mere hours.
One of the most persistent myths about Bitcoin was that it couldn’t be regulated by governments or central banks. Yet this news demonstrates without question that governments can and do regulate Bitcoin exchanges, and they can outlaw them, driving Bitcoin out of the realm of everyday citizens and into the fringe underground where it has much less appeal. So much for the idea that Bitcoin bypasses all government control, eh?
Make no mistake: Governments and central banks are gunning for Bitcoin. They will actively work to discredit it and destroy it.
In fact, the day is coming when a false flag terrorist attack is staged in the United States to establish that it was funded by Bitcoin. The attack could be a dirty bomb, a building explosion, the chemical poisoning of the water supply or something similar. Bitcoin will be framed as the funding source for the terrorists, and from that, the U.S. government will label Bitcoin a “criminal” money system. There are already efforts to brand Bitcoin a money laundering system.
From there, it’s an easy step for Bitcoin exchanges in the U.S. to be shut down. Online wallets like Coinbase — already a criminal organization engaged in routine fraud and theft of user accounts — will of course be shut down while its principals might face arrests and indictments for money laundering.
In fact, every myth about Bitcoin has been unraveling recently: Bitcoin isn’t anonymous. Bitcoin isn’t immune from government regulation. Bitcoin isn’t scalable. Bitcoin isn’t backed by anything (it’s digital fiat currency). One by one, all the promises and hype behind Bitcoin keep falling apart.
Although I’m a supporter of the idea of a decentralized money supply — and I agree that the world’s central banks are fraudulent money monopolists — I was one of the first prominent libertarian-leaning analysts to denounce Bitcoin as an obvious Ponzi scheme fraud that would eventually collapse.
Wise people will sell Bitcoin and buy gold. Bitcoin isn’t even real… it’s a digital fiat currency backed by nothing. As Steve Quayle accurately states, “If you can’t touch it, you don’t own it.”