Bitcoin Pump because of Chinese New Year: These 3 reasons speak against it

On Saturday, January 25, the twelfth moon in the Chinese calendar changes from a narrow crescent to a new moon. The year of the pig is over and the year of the rat begins. And so begin the speculations about a possible Bitcoin pump through the most important Chinese holiday. Could China once again provide a lot of movement in the crypto markets? In this article you will find three reasons why this is unlikely to happen.

 

Chinese see BTC & Crypto as a kind of gambling

Chinese investors are generally a little more risk averse than European investors and especially than Germans. Many small investors are therefore not only invested in the Chinese stock market, but also in crypto-currencies. In China, risky investments are regarded as a form of gambling, which is partly due to the very strict laws governing gambling. In the old Chinese tradition, luck is a very important aspect and factor in life, and so the Chinese continue to chase luck despite strict regulation.

In the land of the middle, even a slot machine with a gripping arm is forbidden because the profit is not guaranteed and in the Chinese socialist ideology gambling is considered diabolical and capitalistic. But since crypto-currencies like Bitcoin are declared as investments, many Chinese try their luck there. Although Bitcoin is not very popular with the Chinese government, BTC has not yet been banned. In addition, the Chinese government is working on a state cryptocurrency, but it is very different from Bitcoin.

 

Bitcoin Course: New Year – New Luck?

Indeed, important calendar events are sometimes a reason for a price increase, both in the crypto and stock markets. That’s why many Bitcoin fans are only too happy to get on the speculation steamer and see BTC rise to new heights today rather than tomorrow. The core of the theory here is that the huge Chinese market is investing in Bitcoin in the bliss of the new year. According to the motto ‘New Year, New Happiness’, 1.3 billion Chinese could buy Bitcoin and thus create a new momentum in the Bitcoin share price. However, this is actually very unlikely, as we will see from the following 3 reasons.

  1. Many Chinese have invested in Bitcoin, but are more likely to realize these gains in the New Year ergo sell or exchange into Fiat currency.
  2. due to government censorship and the danger of banning Bitcoin, the Chinese prefer to invest in local projects such as NEO or Tron
  3. In recent years, the Bitcoin price has suffered rather than benefited from the Chinese New Year

The statements made by President Xi Jin Ping last year also tend to diminish hopes of a Bitcoin increase by Chinese investors.

 

How did Bitcoin react to the last New Year’s celebrations?

The Bitcoin share price has reacted rather negatively to the Chinese New Year in recent years. It is much more likely that Chinese Bitcoin investors will realize their profits at the end of the year and swap BTCs back into Fiat, rather than investing even more. Thus, the Bitcoin share price has always recorded a small slump in recent years, most likely due to Chinese selling pressure. So in the short term there is not much positive price movement in BTC, at least if the history of the last years should repeat itself. We recommend: Don’t let speculation drive you crazy and invest your time and nerves rather in knowledge building.