There are reports out today China wants to ban cryptocurrency mining. The open question is what does this mean for the price of bitcoin. Spoiler alert: I don’t know. But I think it’s worth examining, nonetheless.
When there is a drought, crop prices soar. But guess what happens to cattle prices when there is a rogue “pink-slime” scare. Whether there’s a drought or pink slime, in theory, you reduce supply. Prices jump in the former; but collapse on the latter. Why. Well, because regardless of the supply function emanating from the meat scare, there’s another effect which is more profound: demand plummets as consumers say: “I’ll have the tuna.”
Now what, if anything, does this mean for btc mining in China. Again, we don’t know for sure. I did see reports that basically said “crypto ban…another crypto negative.” I dunno. Are you sure. The China stance is laughable, of course, because it’s couched in the “too much energy” vein, when everyone knows it really is a case of “Do not compete with the yuan”, that’s driving the discussion. Could crypto be banned in the US? Nah. I mean, it could. But come now, in order for there to be a ban Congress would need to have some kind of clue on the topic. And I don’t really think anyone in DC is remotely interested in crypto mining at present.