Recent developments in the world of cryptocurrency indicate a seismic shift that is bound to send ripples across the global landscape. The hub of this seismic activity? None other than the world’s most populated nation – China. China’s decision to crack down on all cryptocurrency-related activities has already sent a wave of uncertainty and apprehension among Bitcoin enthusiasts, investors, miners, and traders. That’s not all; another sector that seems to be bracing for the impact is Bitcoin gambling.
The nexus between Bitcoin and online gambling is not a novel concept. In fact, Bitcoin gambling constitutes a significant portion of all online betting sites, with bitcoingambling.org being one of the leading platforms. As we delve into this issue, it becomes essential to understand China’s role in both these sectors – cryptocurrency and online gambling.
To fully comprehend this situation, we need to go back to September 2017, an eerie month for all Bitcoin aficionados. China declared all Initial Coin Offerings (ICOs) illegal and imposed an immediate ban [1]. This move by the Chinese government rattled the global cryptocurrency market and caused massive fluctuations in cryptocurrency prices. This unexpected move was just the harbinger of measures to come.
Fast forward to 2021 when China has once again proven its strict stance against cryptocurrencies. The Asian giant has now extended its crackdown on Bitcoin mining and trading, leaving many in dire straits. This move by China has dealt a significant blow to global Bitcoin activities. According to the Cambridge Center for Alternative Finance, nearly 65% of the global Bitcoin mining took place in China as of April 2020 [2].
This clampdown has gradually started to impact places beyond China’s borders. The ‘ripple effect’ is being felt across one sector that somewhat thrived amidst the pandemic-induced lockdowns – the online gambling industry. Bitcoin, with its decentralized nature, anonymity, and quick transaction times, became the chosen cryptocurrency for many gambling enthusiasts.
China’s crackdown means that there are now fewer Bitcoins in circulation, leading to deflation. This, in turn, leads to an increase in Bitcoin’s value, which could be good news for Bitcoin gamblers. They suddenly find their Bitcoin holdings increasing in value. For online platforms like bitcoingambling.org and others, this may translate into more gambling activities, albeit with higher stakes.
However, on the flip side, increased Bitcoin value could also result in traders withholding their Bitcoins, anticipating further increases. This reluctance to part with their Bitcoins could lead to a drop in the volume of Bitcoin transactions within the gambling sector.
As Bitcoin supply decreases and value increases, another potential issue emerges. The price volatility of Bitcoin could impact the steady supply of Bitcoin in the gambling sector, potentially leading to liquidity issues. An increase in Bitcoin’s price can also exacerbate the existing problem of high transaction fees associated with Bitcoin transfers.
In conclusion, the ripple effect of China’s cryptocurrency crackdown is visible in the global Bitcoin gambling scene and will continue to send ripples across the market.
While the crackdown has served as a significant disrupting force, the world of Bitcoin is notorious for its volatile nature. As the influence of Bitcoin continues to infiltrate various sectors, including gambling, this latest development in China will undoubtedly evolve into a pivotal chapter in the chronicles of cryptocurrency.
[1] South China Morning Post, “China’s ICO ban makes more sense in light of its history with fintech”, 13 September 2017
[2] Cambridge Centre for Alternative Finance, “2nd Global Cryptoasset Benchmarking Study”, 2020
