Crypto Suddenly Braced for a ‘Very Important’ China Flip After Wild Bitcoin, Ethereum, and XRP Price Swings

Bitcoin, along with other major cryptocurrencies Ethereum and XRP, have swung wildly as “extreme fear” risks crashing the market further. The bitcoin price has lost almost 20% over the last month, crashing back from its recent highs of over $70,000 per bitcoin as Federal Reserve chair Jerome Powell issues a “critical” warning.

Bitcoin price crash

Now, after a tech billionaire sparked wild speculation he could follow MicroStrategy and Elon Musk’s Tesla into bitcoin, crypto entrepreneur Justin Sun has said China is poised to flip on bitcoin and crypto, calling his recent legal victory in China “very important.”

“I think the mainland China legal battle win is very important because a lot of the rumors spread on the misunderstanding of the mainland China legal policy interpretation,” Sun, who founded the Tron blockchain and cryptocurrency, told The Block.

 Justin Sun

Last week, Sun took out a paid ad in the crypto industry publication Blockworks to spread the news of his legal victory.

“This is a big win for not only for me but for the industry itself because cryptocurrency has been long been seen as a grey area in China,” Sun said, adding the court in China has given some legitimacy to crypto.

China’s 2021 bitcoin ban that made the trading and mining of cryptocurrencies including Ethereum and XRP illegal, triggered a sudden bitcoin price crash at the time.

 China Bitcoin Ban

Last month, bitcoin and crypto investor Brock Pierce predicted it’s only a matter of time before China reopens its digital doors to crypto.

“Is China going to open up [to crypto]? … I’d say it’s inevitable,” Pierce, a former child actor who cofounded the USDT dollar-pegged stablecoin issuer Tether in Hong Kong a decade ago, told the South China Morning Post. “The question is not so much if, it’s a matter of when.”

 Brock Pierce

Meanwhile, the drop in Bitcoin mining difficulty has been compared to the FTX collapse, with miners’ daily revenues falling from $78 million pre-halving to $26 million currently.

“Network hashrate has experienced a 7.8% drawdown, which is comparable to post FTX collapse on December 2022,” CryptoQuant head of research Julio Moreno, told CoinDesk in a Telegram message. “Miners’ profitability has been hit as the daily revenues fell from $78 million pre-halving to $26 million currently.”

 Bitcoin Mining Difficulty

The downward adjustment in mining difficulty can benefit smaller miners and potentially lead to profits for mining farms.

 Bitcoin Mining

In other news, selling pressure from Mt. Gox customers and the German government may be seen as a buying opportunity, according to digital asset manager CoinShares, which said global digital asset investment products saw $441 million of inflows last week.

 Mt. Gox

Ether (ETH) is also experiencing a potential liquidation of a large holder in the form of Ethereum-based decentralized application Golem, which raised more than 800,000 ether in an initial coin offering in 2016.

 Golem

According to Arkham Intelligence, Golem has already sent more than $100 million worth of ether to exchanges over the past 30 days, and the project still has roughly $388 million worth of ether at its disposal.

 Ether Price