The nature of government that differentiates the United States and China seems to give the Asian country more weight. Chinese miners feel the government will not change its position, which is why many of them have bet on the United States.
The United States and China are currently at the forefront of technology worldwide. An important achievement is the cryptocurrency market, in which important sectors of the economy move. Beijing seems to have more influence in this scenario, which allows questioning the preparedness of the United States to dominate that new financial world.
The North American country carries considerable weight in the field of digital currencies, especially regarding institutional investments. However, its influence is not as strong as people think, which is apparent in state decisions.
Regarding China’s announcements about Bitcoin, they shake that market. On the other hand, the US Infrastructure Law went unnoticed about its influence on the price and trading of digital currencies.
Will the Cryptocurrency Market Do What China Says?
Although China is now a cryptocurrency-free country, its word came to dominate the cryptocurrency market. When the state television of the Asian country praised cryptocurrencies, the price of Bitcoin would skyrocket. On the contrary, if an official referred to them in a derogatory way, its value would plummet.
All of that remained until the recent ban on mining in that country. Some measures caused the Bitcoin hash rate to drop but did not affect its price as expected. However, the leading economic power does not seem to have as much influence as the Asian country.
One of the clearest examples is the case of the US Infrastructure Law. Although it is theoretically a defeat for cryptocurrencies, it did not have the most feared impact. Bitcoin seeks to break the resistance at USD 50,000 and make the entire cryptocurrency market emerge.
China has more influence than the United States on the cryptocurrency market, but it is hard to explain the reasons. One of the most likely could be the nature of government that differentiates both countries.
The Rigidity of the Chinese Government about Bitcoin Mining
The democratic order can work in the United States thanks to the division of powers, at least in these cases. Defenders can appeal, lobby, and correct, which allows repealing laws in future terms.
In China, everything depends on the decisions by the Central Committee of the Communist Party on the cryptocurrency market. A few people introduce bills to the legislature for their approval, generally with all the votes.
Chinese miners have little hope of the government changing its position, which is why they quickly complied with the ban. Most of them disconnected and sold their machines while others migrated.
That contrasts with the existing alternation in the United States, where different representatives without a centralized ideology can be lobbying vehicles. That seems to have been the bet of the disadvantaged entrepreneurs in the cryptocurrency market.
Cryptocurrencies Should Not Depend on Any Power
The target of the cryptocurrency market is to be independent of China and the United States regardless of their influence. When China decentralized Bitcoin mining, it inadvertently did a favor to cryptocurrencies.
No government can threaten cryptocurrencies in that area, as the banning of mining in China nullifies the possibility of a 51% attack. In other words, cryptocurrencies are becoming immune after just a decade of existence, a trend that continues to strengthen.
By Alexander Salazar
