Bitcoin suddenly dropped $3,000 in a matter of hours on Sept. 24 as old news over a Chinese regulatory crackdown hit social media, causing panic and disarray in the crypto markets. The traditional financial media repeated the claims without verifying the information.
The knee-jerk reaction came after a memo dating back to September 3rd was recirculated by regime’s central bank, the PBOC. As commentators noted, the original post is old new, and has no bearing on the current stance China has on bitcoin and cryptocurrencies.
Traditional Financial Media Spread Fake News
Recycled news from China has become a classic source of BTC price pressure, with the market reacting negatively to the disinformation campaign. The fake news was also picked up by Western financial media like Bloomberg, which conducted zero due diligence on the rehashed claims and provided no sources to the story.
Per the above article, Bloomberg said that “the Chinese central bank says all cryptocurrency-related transactions are illegal“, without linking to a source.
This is plainly false information, as the central bank has reiterated the same thing it has said in 2017.
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Published on September 15, the PBOC said:
“Virtual currency-related business activities are illegal financial activities. Carrying out legal currency and virtual currency exchange business, exchange business between virtual currencies, buying and selling virtual currencies as a central counterparty, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, virtual currency derivatives transactions and other virtual currency related Business activities suspected of illegal sale of tokens and tickets, unauthorized public issuance of securities, illegal operation of futures business, illegal fund-raising and other illegal financial activities are strictly prohibited and resolutely banned in accordance with the law. Those who carry out related illegal financial activities constitute a crime shall be investigated for criminal responsibility in accordance with the law.”
This has been the central bank’s position for 5 years. Since then, China has cracked down on Chinese citizens who aid crypto companies to provide services to Chinese looking to escape the regime’s ailing economy, propped up by infinite money printing and debasement of currency.
China keeps banning bitcoin to no avail
Notably, the regime has banned bitcoin many times over, yet this hasn’t stopped Chinese people from trying to escape their financial woes caused by the Communist dictatorship.
As reported by Trustnodes, the PBOC has printed about $100 billion this week alone. $10 billion were minted today and another $71 billion in the last give days with more to come in the days ahead.
This comes after the Evergrande insolvency crisis has an ongoing rippling effect in the wider Chinese and global markets.
As the inherent flaws in the legacy financial system come to the surface, the Chinese Communist party might be attempting to dissuade its people from escaping to safe haven, fixed supply assets like Bitcoin. The goal is for financial media sites like Bloomberg to interpret the announcement as breaking news, causing further panic among Western investors in turn.
While one can expect disinformation campaigns coming out of China, the same cannot be said for Western financial media, which is now in the habit of spreading false information about bitcoin and cryptocurrencies. Bloomberg also spread fake news about Litecoin and Walmart not long ago, stating that the retail giant adopted the crypto as a payment method due to a false press release.
For legacy financial media outlets, it is becoming clear that click-bait is more important than verifying a story.
Regardless, the PBOC knows that bitcoin and crypto adoption is on the rise in China. The Evergrande property crisis, which has been building for decades due to the proliferation of ghost cities in the country, means that Chinese money is not safe in legacy financial markets.
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