Michael Saylor of MicroStrategy fame is convinced that China is making a huge mistake by not allowing bitcoin operations to continue within its borders.
Michael Saylor Is Critical of China’s Decisions
Over the past few days, bitcoin has experienced something of a surge. It was trading for about $29,500 just over a week ago, and yet today, the currency has risen to roughly $36,000. While this is by no means a heavy boom, the currency is doing considerably better, and the asset appears to be slowly getting back on track.
Despite this, China is moving forward with its bitcoin ban. The country is stopping all miners from operating on its turf, and it is also disallowing all banks and standard financial institutions from offering their services to bitcoin and blockchain firms. Saylor is convinced that this move is going to be very costly and that it will relieve China of trillions of dollars. In a recent interview, he states:
I think, given the bitcoin growth rate, this will prove to be a trillion-dollar mistake for China… It is a tragedy for Chinese miners [and] it is a geopolitical mistake for China the country, but I suppose they could afford to make a trillion-dollar mistake.
At one point, it was widely believed that China played host to anywhere between 65 and 75 percent of the world’s bitcoin and cryptocurrency mining operations, though it looks like that is going to end in the coming weeks. China is moving fast, having recently shuttered as much as 90 percent of the bitcoin mining operations stationed within the Sichuan province, which is what allegedly caused the BTC price to sink to new lows last week.
It is a nuisance and a dislocation for bitcoin in the near term. You can see the trading volatility. A lot of Chinese had to sell bitcoin under forced liquidations and with a timeframe because they had to get out of the country and all their loans got pulled, so that has been a big opportunity for western investors.
If anything, Saylor is convinced that this move will be great for North America, as many of the operations that were formerly stationed in China are now looking at regions of the western continent to set up their companies. He says:
It is a great windfall for North American bitcoin miners whose costs are the same and they are going to generate 50 or 75 percent more revenue for a while because the China business has been taken offline.
A Major Buyer
MicroStrategy is arguably bitcoin’s biggest institutional supporter, having purchased more than $2 million worth of the asset at press time. Saylor mentioned:
Companies like mine bought bitcoin in the $30,000 range. We would have paid double or even triple that if it had not been for the China exodus.