The Subsequent Wave: China’s curious crypto crackdown

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$3 million. 13 deals.

MAY 23, 2021


This newsletter is a weekly in-depth analysis of tech and innovation in Africa that will serve as a put up-pandemic handbook. Subscribe here to win it on to your inbox every Sunday at 3 pm WAT

Good day,

On Would possibly per chance 19, Bitcoin sank to $32,000, Ethereum $2,000 and Dogecoin $0.22. It used to be the low point of a flow that started ten days earlier. Cue the anxious tweets in the cryptoverse.


No sell-off dread followed, alternatively. By now, crypto holders know that a dip – steep loss in price – is a section. Prices have ticked upwards and nerves are calmer.


One person has asked me if BTC will now tempo as a lot as $70ample – this expectation has been existing since March. But the more pertinent ask is that this: how soon have to holders prepare to relive that weary Wednesday? 

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Now, let’s dive in.

Bitcoin used to be designed to obey the wisdom of the crowd. 

Coded by its creators to have a keep volume and be printed at a definite tempo, it’d be free from the stress of central banks and governments. Being decentralized, it’d be more accurate than executive-issued currencies, at final turning into adopted for witness-to-witness transactions in each place.

But the 12-twelve months history of Bitcoin has been about how holders navigate stunning highs and depressing lows, no longer the transactions they uncover with it. 

On the first of January 2017, BTC used to be price $998. By December 17, it shot as a lot as nearly $20,000. Five days later, it dipped beneath $12,000. Between February and March 2020, BTC swung from a 5-month high of $10,500 to a $3,850 low.

Boluwatife Sanwo/TC Insights

But some factors – in conjunction with the Federal Reserve’s COVID-led to printing of greenbacks – fuelled an all-time height of $28,000 by December 2020. As countries (love Nigeria, South Africa and Turkey) with weaker currencies copied the Fed’s money printing, Bitcoin surged in 2021: crossing $30,000 in January, $50,000 in February and $60,000 in March.


African investors and traders welcomed this upward push as a hedge against resources depreciating in local currencies and buck inflation. But final week equipped a actuality take a look at on that expectation: crypto can be weak to winds that affect fiat money.


The dip morphed into a shatter after China’s Stammer Council signalled a crackdown on Bitcoin mining and shopping and selling. China is the 2nd most piquant economy on this planet, with unrivalled cultural and political energy to march their 1.4 billion residents in instruct and swing international markets. Also, most Bitcoin has been mined in China for the final four years


To uncover definite, China desires to harness blockchain abilities. They’re piloting a digital currency that they hope will likely be the potential forward for money. But they’re actively opposed to crypto for reasons that will likely be familiar to Kenyans, Nigerians and others in Africa whose central banks have opposed crypto: the order of affairs of transactions no longer being traceable.


Over the arrival weeks and months, we are able to know precisely what China will fabricate to stifle crypto.


“The case for Bitcoin hasn’t changed,” Eloho Omame, co-founding father of FirstCheck Africa, a Nigerian startup funding firm, told TechCabal in the wake of the contemporary shatter.

“Crypto markets were at all times unstable. So actually it’s no longer stress-free, but it’s no longer unexpected. Future, I’m bullish. So it doesn’t in actuality matter what occurs on the present time.”

But the warning is definite: the crypto crowd would be confident in regards to the lengthy creep, but stress from curious actors love China will have fundamental sway.  

PARTNER MESSAGE

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Theme: The Innovators’ Accelerate

Date: 29th of Would possibly per chance, 2021 

Venue: Iganmu, Lagos Nigeria.


Time: 10am

Confirmed company consist of the CEO of Flutterwave, VFD Bank as well to Co-founders of Kuda, Cowrywise and Tremendoc.

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Look you there!

Devour a large week


Thank you for reading the Subsequent Wave on the present time. Retain safe at the same time as you could perchance perchance be out in public places – protect others by carrying your hide and sanitizing your hands.

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– Alexander O. Onukwue, Staff Creator, TechCabal

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