Bobby Lee on China's Crypto Ban: 'OTC Trading Will Close Down'
What is different? This time about this crypto ban in china, if theres anything at all, does this one have teeth so its its more of the same. So technically, it is a more severe crackdown. I closed the loopholes for the exchanges who were operating from abroad, offering services trading services to the chinese people on mainland china. As you know, the last ban in 2017 essentially forced all the exchanges to close down within china, and i myself would close down btc china operations, whereas our competitors nominally moved abroad, so they were, there was a loophole where they could sort of relocate abroad from a Jurisdiction perspective yet offer the same trading services to the same domestic chinese users. So this time the ban is explicit. It criminalizes the the service offerings from abroad to chinese mainland users, so this puts it. Sort of uh closes all off the buying and selling of transaction. The transactions that involve buying and selling of bitcoin – so i know in the media theyve talked about this bans all bitcoin transactions. I think thats a mistranslation its more about banning the buy sell transactions whereas, for example, traditional transfers. If i were to withdraw some coins from an exchange that is still legal and holding owning, holding and owning cryptocurrency and bitcoin, that is still legal, so its not the final nail in the coffin so bobby one of the one of the main ways that um cryptocurrency Traders are operating in china is through over the counter otc platforms and, and, as far as i know, those still exist right.
So these are not actually exchanges. These are more platforms that you know: kind of connect, buyers and sellers that to me seems like that would be a big nail in the coffin um. What do you see as the future of otc trading in china? So i think, otc platforms that are operated from the big exchanges, the hawaii and so on and binance they will, they will close down. They will stop offering their services to the chinese uh mainland users. So i think the last few days i think, theres still uh otc users. You know making transactions. I think that will just taper off, i think uh, i think whats happening is with capital controls and the strong sort of regulator. Pressure on bitcoin, i think bitcoin and crypto assets is – are going to become what we consider what we call foreign assets. Think of think of mainland chinese uh citizens who may own real estate property in another country, in australia, in canada, in the united states. So bitcoin becomes that kind of foreign asset where you cant sell that foreign property from within mainland china. But if one day you were to travel to that country for on vacation or for whatever work reason, then, when youre abroad, you can then take care of buying and selling these foreign assets. But while inside mainland china, you wont be able to do that. You just made a very bold statement that china is going to close down.
Otc trading thats been a major force for crypto trading in china. So how? What will happen to the the the traders, the mainland traders, because, as weve discussed before people in china generally are good at getting around these kinds of restrictions, theyve sort of navigated their way around restrictions for many years? Would this really shut down the cryptocurrency market in china, or would people just find another way and what would that way be? I think it will shut down the trading market for cryptocurrency, i think cryptocurrency. You know the mining aspect has already been shut down since earlier. This summer, uh, the trading aspect was partially shut down in september of 2017, but due to the workarounds and all the otc and all the underground money, changers and moving to usdt and all that sort of it still thrived in an underground fashion. In the in the past four years, i think this uh with this regulatory crackdown this past friday. I think that will sort of close off that loophole and officially make it a a criminal behavior activity to both for the companies abroad that offer the trading services and for the domestic users in china who do try to buy, sell through these platforms. So again, this is to further the objective for the regime, which is to control the finances, the economics and to not allow this sort of rogue trading of crypto asset thats outside of the framework of the of the prc.
So, in the end, what is chinas? Well, you mentioned chinas endgame is to control the financial system. Do you think they will actually succeed in that or will crypto find a way, because there are a lot of personalities in the crypto space who are saying? Well, you can try to ban bitcoin. You can try to ban uh decentralized cryptocurrencies, but it will always find a way of popping back up because you cant stamp out the internet. What are your thoughts on on that? Do you think crypto will find one? My thought is yeah on on earth. You know as as as a planet cryptocurrency will never get. Squashed. Bitcoin will always stay around and and thrive because all it takes is for two people for group of people to consider as valuable asset and people will start holding it hoarding it and trading it and making payments in it. Now, countries obviously have governments who can have the right to set the rules as they see fit. So if china wants to ban the trading or the transaction nature of cryptocurrency of bitcoin in china, china has every right to do so. However, bitcoin will continue to thrive and i think bitcoin is still the investment of our lifetime, so so bitcoin, you know in terms of its price, in terms of the value i dont think thats going to be affected, whether or not a single country will will uh. Stop using it so im sort of uh, i i see both sides.
I understand that china can put an effective ban to the transactions to the trading buying selling of bitcoin. You know china has long since banned the leverage trading, the the futures trading contracts and stuff like that of bitcoin and cryptocurrency. So now the otc stuff will get stopped as well. Um yeah, so so theres two sides to it bobby. Thus far, at least what were seeing over the past few days, your thesis is completely right in the sense that china has sort of amped up this crackdown and it hasnt affected bitcoins price, very much at all, at least not not in a significant way. In fact, its its been going up um, but you know theres a lot more to come like for example, you know, huawei has basically said that you know existing users need to sort of get off by the end of the year um. As you said, theres a the chance that they could shut down otc trading. If these two things happening happen, a lot of people are going to be selling um cryptocurrency and probably putting it back into into chinese currency right. So is there like a major price movement that could come in the next few months because it seems like china is still theres a lot of people holding crypto there. It seems right so when these two events happening, you know hawaii, basically closing the doors and also otc potentially shutting down. Are we gon na? Is there a potential bitcoin crash uh that would follow yeah its an interesting question? I im.
I take the optimistic side of that and heres. Why so, when it comes to bad news, like rumors of bad news, uh its always sell on the rumor buy on the news, what that means is when the rumors of it, you know theres pricing pressure on the underlying asset. In this case, bitcoin theres been rumors. All summer that china will take a harder stance, harder crackdown on bitcoin and the reason this time when the news did come out this friday. As you know, the document was dated september 15th, so it took another. You know eight ten days for the news to get out uh to be officially published by the pboc. So in the interim, the the the sort was sort of priced into to the news sort of price in to the price of bitcoin. And when the news came out, it was a relief that it wasnt worse than people, thought it was and thats why. It was very small correction and now its already practically recovered to where it was on thursday friday morning, before the most part, though, its just sort of theres a little bit of a distinction here, though, because were not talking about news im talking about like a lot Of people in china actually having to sell because these these platforms will close right yeah. Let me talk about that so yeah, but but the reality is because the trading has already been stopped, so its its kind of like the chinese people have no way to sell it anymore for all practical purposes, theres, no longer a mad rush at the gate, because You cant youre not allowed to rush out youre not allowed to sell or buy for that matter.
So i think its gon na its gon na freeze, like the people who have crypto, will have to withdraw it onto a cold wallet. You know we as maker ballet. We see a huge rise, we saw a huge rise in orders over the weekend and i think thats whats going to happen. I think the remaining people some people are panicking. They dont know what to do, but the people who are panicking they dont really have a way to sell their coins anymore, so its just gon na sort of stay put for the next few months and years and in reality, what i see is actually a very Bullish q4 for this year, i still stand by my prediction that bitcoin prices will go way above 100, 000 – maybe even over 200 thousand dollars this year by end of this year in november december time frame – and i think, with this sort of bad news out of The way, the the reason why the market price recovers is because once the bad news so to speak, is in the past, thats already come out its now part of our history and no longer something that we have to worry about as a market thats when the Prices can recover and start climbing back up again and thats what were seeing the last 48 hours uh. Is there another catalyst youre seeing that will drive up the price of cryptocurrency? You said a hundred over a hundred thousand for bitcoin and but also.
Secondly, you know: are people? Are chinese people dealing with crypto putting themselves at risk? Then um? I i dont think chinese people ill answer. The second question: i dont think chinese people are putting themselves at risk. I again im a very bullish. You know bitcoin bullish on bitcoin and crypto, so when people own it think of it as a treat as a foreign asset, its treated as if you owned a piece of real estate in hawaii or in some foreign country. So the fact you cant buy, sell doesnt mean that its worthless, in fact, if anything, the price can still continue to go up over the next few years and you just dont have a way to sell it uh in the in the interim. So, for all you know the positive way to see it is for all the amount of bitcoin equipment thats held in china that cannot be bought or sold as the prices go up. Maybe theres theres less selling pressure if anything right now, certainly theres less buying uh theres less buying volume, because chinese cannot easily buy it, but but thats not going to stop the success of cryptocurrency right. So bitcoin wasnt born uh to to succeed, because china is around right. If china is not here, bitcoin can still succeed and will continue to succeed.