The crypto world has had a banner year in recent years, with terms like Metaverse, NFT, DeFi, scaling solutions, and more. But it is not just the cryptographic vocabulary that has developed. Popular crypto assets have reached new heights, institutional investors have gone crazy, and governments have become more receptive to specific cryptos.
The People’s Bank of China, Beijing’s monetary authority, issued a statement on September 24 claiming that cryptocurrencies do not possess the same status as traditional monetary instruments. The notification, which was issued in conjunction with nine other government agencies including the Public Security Bureau, declared all related operations illegal and warned that bitcoin transactions originating outside of China would be treated as same way.
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Between 2019 and 2020, more than $50 billion worth of cryptocurrencies left accounts in East Asia to destinations outside the region, according to data platform Chainalysis Blockchain.
Because China has such a large presence in East Asian cryptocurrency exchanges, Chainalysis believes that much of the net cryptocurrency outflow was due to Chinese capital flight.
While Chainalysis doesn’t have a hard figure on how much money left China between 2019 and 2020, they believe it is in the $50 billion range.
China imposes an annual limit of $50,000 on foreign currency purchases as part of its strict capital controls. As a result, the capital flight enabled by bitcoin is particularly noteworthy.
Previously, wealthy Chinese circumvented capital regulations by buying overseas real estate, inventing new ways to charge for international trade, and even forcing their employees to transfer money to foreign bank accounts.
Residents in China have been able to buy foreign assets faster and without inspection from Chinese authorities thanks to Bitcoin.
Because Bitcoin and many other blockchain-based cryptocurrencies are decentralized, they can be used to circumvent capital controls much more easily than a traditional monetary transaction that relies on the banking system.
According to China’s official Xinhua news agency, cryptocurrencies have disrupted the financial systems of the regulated economy and contributed to crimes such as money laundering, which led to the ban.
Cryptocurrencies, or digital trading tools that are not tied to a central bank, made their debut in China around 2008. In 2013, Chinese banks began banning the use of digital currencies and the rules were changed. strengthened in 2016.
China was the largest bitcoin miner in the world and sponsored the largest bitcoin exchange by volume. According to numerous reports, many of the people who made millions when Bitcoin prices soared four years ago are in China.
In the race to limit but profit from cryptocurrencies, Australia has emerged as a possible “crypto-friendly” country. The Senate Select Committee on Australia as a Technology and Financial Center produced a report in October that endorsed cryptocurrencies.
It offers crypto exchange market licenses, simplified taxation, and a regulatory structure for “Decentralized Autonomous Organizations” or DAOs.
These operate similarly to decentralized cryptocurrency networks in terms of self-governance, with blockchain technology and cryptocurrency tokens being used to manage participation and enforce regulations.
Australia’s choice is to harness the immense economic potential of decentralized digital assets. It remains to be seen how this will affect the national economy. However, we can expect politics to impact results if history is any lesson to be learned.
When the physical real estate sector saw limited acceptance due to covid risks, a notion related to “Virtual Land” emerged. Blockchains like Decentraland and Sandbox have grown in popularity in 2021, allowing investors and participants to purchase virtual land, resources, digital assets, and other items using utility tokens like MANA and SAND .
For this reason, Metaverse, the most famous buzzword of 2021, has gained popularity.
Despite the fact that meme coins were famous in 2021, individuals have started looking at these trendy crypto readers with a critical eye. As one progresses to 2022, the relevant range for a meme coin or any other volatile crypto asset seems to be determined more by value criteria, such as trading volume, global market capitalization, etc
Additionally, with several tokens set to be seen as Web 3.0 crusaders in the coming years, the value versus hype scenario is likely to continue.
Despite releasing “Crypto Hype” behind the scenes in 2021, Elon Musk’s cryptic innuendos and tweets were unstoppable. However, in 2021, Tesla made a positive move by buying $1.5 billion worth of BTC, giving investors reason to be optimistic about the future of the biggest crypto player by market size. Microstrategy agreed with Tesla’s bold goal to put BTC on the balance sheet, making 2021 a great year for institutional buying.
In September 2021, Bitcoin was recognized as legal tender in El Salvador. While this is the most significant event in terms of establishing the legitimacy of crypto, other countries, such as Zimbabwe, may be urgently considering similar issues in 2022.
November’s high point was the overall crypto market capitalization, which overtook Apple and Microsoft with a value of over $3 trillion. In 2022, the market capitalization of cryptocurrencies could climb much further.
Cryptocurrency is gaining popularity as an economic asset class, technological infrastructure, and social experiment in non-state infrastructure.
As a result, crypto communities are becoming more influential in public policy discussions. Crypto proponents, for example, were able to derail a major federal infrastructure bill in the United States last year.
Different jurisdictions, however, take different paths in policy and regulation.
It is seen as a fiscal and ideological threat to national currencies by China and Russia, for example. Others see it as an opportunity for economic expansion, investment and innovation.
As various ideas emerge, 2022 could be a watershed moment for the crypto industry and those fighting to ban or welcome it.
Countries that encourage crypto networks have reaped economic benefits in the form of innovation, investment, jobs, and taxation in the past.
Access to new demographics and technological efficiency in cash management are two business benefits of adopting crypto as a digital asset.
At the same time, industry influence on policy and legislation shows that cryptocurrency is not a fully decentralized entity that only exists on the blockchain.
In previous years, these events had a significant impact on the popularity of cryptocurrency. And that’s exactly what’s keeping investors bullish into 2022.
While prices will continue to fluctuate due to diminishing buy-to-sell ratios, it will be the very value of the crypto market that will propel it forward. If you are interested in selling crypto, only use trusted places to do so.
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￼How Global Events Have Influenced The Price Of Cryptocurrency
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