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Why does any China regulation news tank the market so hard so fast?

Sorry for the newb post, I don’t have a whole lot of education in global economics. I understand China is obviously a massive part of the global economy, so I definitely get that negative moves they make would create big fluctuations but it still seems weird to be that every single time the China makes it to a crypto news headline, the entire market just takes an incredibly swift nosedive.
This is obviously oversimplified, but hypothetically speaking, what would China somehow banned residents from buying, selling, mining crypto, etc. while other major economic entities adopted crypto to some degree? I don’t even really see how they could achieve banning everyone in China from holding something that only exists digitally. With the consistent reaction of the market, it seems like the takeaway is if China doesn’t get on board, we all might as well pack up and head home. That’s just confusing to me.
Genuinely asking for the sake of learning.

What do you think?

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20 Comments

  1. China contributes to almost 70% of the total mining. That’s a huge proportion, which obviously will impact the volatile market.

    That said, people accustomed to bitcoin already know that it is customary for the People’s Bank of China to ban bitcoin at least once in a bull cycle.

  2. Because it causes a lot of people and miners in China to sell. Also it will spook a certain amount of people outside of China. This all creates a lot of sell pressure on the exchanges casing the price to fall.

  3. people are very reactive to what they perceive as bad news. china plays a huge role in crypto through mining facilities and manufacturing of the miners themselves. so when you make an abrupt change to that, you produce a lot of uncertainty and if enough people think it’s bad they panel sell.

  4. The projections are saying that China is going to be the biggest economy in the world in the next 10 years. So if you add that to the mining capacity they have a pretty big impact in the market.

  5. Their action is unified. The rest of the world has not taken a governmental position and is instead allowing the financial markets to establish their stake in crypto at the lowest cost and maintaining the biggest gain. They use the fluctuations to their benefits only making anything China does to better command their immediate position. They are simultaneously buying, selling, shorting, lobbying and the like. I see the only eventual stabilization will be after there is a significant amount invested calling for a bailout after a crash of some kind. The problem is is that the rest of the players (everyone who is not a corporation connected to the financial markets) are not allowing it to crash. It is handling the situation. The housing market was not a free market. Crypto is. Legislation will change this over time protecting larger interests and perhaps individuals as well but will limit the short terms gains. This is why/how tokens will become more popular and function a lot like penny stocks.

  6. BTC miners getting kicked out of China was really bad news. It was not an opportunity. It was just bad.

    The whole point of China is, you get things done cheaply. China has subsidised electricity in many areas. It’s cheap to operate there, plus it’s very loosely regulated. The downside, of course, is that it’s all managed at the whim of the Chinese government.

    Now that BTC miners have to find other places, it’s a problem. BTC miners going to America will be stymied by hyped up and vastly overblown “environmental” concerns. It’s the same everywhere else. There is too much “democracy” (and by democracy I don’t mean democracy in the real sense but the availability of power to private interest groups and lobbies). The net is tightening.

    China matters a lot. In this world there are a few big players and they are one of them.

  7. I may get banned for this but it is true . united States President Franklin D. Roosevelt signed his infamous Executive Order 6102 on April 5, 1933.
    FDR’s gold confiscation meant private owners were obliged to take their coins, bars or gold certificates to a bank, and exchange them for dollars at the prevailing rate of $20.67 per ounce. Over the next year, the president then raised his official gold price to $35 per ounce, effectively cutting 40% off the dollar in a bid to stoke inflation and spur the economy.

    Think of the wealth created by this simple act. China and crypto is no different they are making it illegal for its subject to own, When the price is low enough ( yes no doubt they are going to be driving it lower) The Chinese government will buy into crypto drive the price way up amassing trillions of dollars in assets and control watch

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