Why Are Governments Suspicious of Cryptocurrency

A few weeks ago, when Russia announced that it is considering banning cryptocurrency mining, investing, and trading in the country, it sent a tremor in the cryptocurrency market resulting in the market crash. After China banned Cryptocurrency in 2021, a lot of mining operations were moved to Russia but when the country actually bans crypto, it will be a huge blow to the crypto community.

Russia is not the only country, that has brought the crypto market to a standstill. Last year, China caused a lot of uproars.

When China banned crypto in 2021, the market crashed. However, that was not the first time when Chinese policy influenced the cryptocurrency market negatively.  In 2013, bitcoin was steadily going up, however, suddenly out of nowhere China banned bitcoin. The price of bitcoin went down to $400 from $1100. It took almost 4 years to reach that value again. From $64 thousand to below $30 thousand, bitcon went too low in 2021. Currently, is it floating around $37 thousand (because of Russia’s possible ban). It might take a long time to go back to all-time high prices again.

Why China Banned Cryptocurrency?

There is one simple reason why China banned crypto currency. It has launched its own digital currency which is a digital version of fiat currency Yuan.  China wants to promote its own digital currency. China has a population of 1.44 billion, which is 18 percent of world’s population. China gives financial assistance as well as has numerous mining and business operation in numerous African countries as well as in Pakistan, Sri Lanka, Myanmar, etc. Therefore, China has a huge influence in these countries.

Alibaba is world’s biggest B2B marketplace selling world wide

You can just imagine the market size of China.

Will India Ban Cryptocurrency?

When China banned crypto currency transaction and even cracked down on Bitcoin mining operation, lot of people believe that India will also ultimately ban crypto currency.

India has banned crypto currency in the past and the government might again try to ban crypto currency. Sometime back even news was flouting in the media that Indian government will again ban crypto currency.

When India banned crypto currency for the first time, government’s decision was challenged in the court and court lifted the ban. In case the government tries to ban again, it will be again challenged in court and once again ban might be lifted.

However, people need to understand one basic thing about India. China’s is authoritarian regime, once the communist party and the government decides something, the decision cannot be over turned even if it means bulldozing people. However, India is a democratic country, government’s decision is never final, and it can be challenged in court. The common people decide the fate. 

Cryptocurrency Market in India

Crypto currency market is booming in India. WazirX, one of the popular crypto exchange platforms is based in India.

Polygon Matic, one of the emerging crypto currencies, was conceptualized by Indian. 

It is believed that even Indian Government is working on Central Bank Digital Currency.

Crypto currency market in India worth billions of dollars. 

One of the reasons why Indian government is worried about booming crypto currency market is because it is afraid that crypto currency might be used to fund community terrorism and Islamic terrorism in the country. The reason seems valid as it is easy to move funds through crypto currency without any trace. This is a problem in a country threatened by communist terrorism and Islamic terrorism. 

The volatility of Crypto Market

One of the reasons why the governments are suspicious of crypto currency is because of the volatility of the market.

What is the Biggest Issue With Crypto Currency Price?

Do you know what the biggest issue with cryptocurrency is? Well, it is the manipulation of the market. The Whales easily manipulate the price.

Yes, you read this right.

If people decide to pull down Bitcoin down to $10K, they can do it just in a couple of weeks. If they decide to push it to $100K, they can do it in a couple of weeks.

The price of crypto currency is depended on demand and supply. The price goes up when there is demand but not much supply, and the price goes down when there is no demand but a lot of supply. In other words, when people start buying crypto currencies and start investing a lot of money, the price will go high (because there is demand). However, when people start selling crypto assets, the price will go down (because there is a lot of supply).

Let say, you have billions of dollars, don’t you think you can easily create more demand or more supply?

First published on Forum Coin, in author's name