Christopher Wood believes China’s crypto in 2021

Christopher Wood believes China’s crypto crackdown has a major silver lining:

Unlike China’s authoritarian model, the U.S. regulatory response to cryptocurrencies is likely to be milder given the rapid deterioration of U.S.-China relations, according to Christopher Wood, head of Jefferies’ global equity strategy.

Despite China’s suppression, the crucial question remains what the regulatory stance on cryptography will be in the Western world, particularly America, Wood said.

US President The Securities and Exchange Commission (SEC) Gary Gensler announced last month that the Commission would introduce a regulatory framework for cryptography next year, signaling that Bitcoin should not be banned overnight.

Greed and Fear, Wood’s weekly research article, assumes that Gensler wants to come up with a definitive normative roadmap.

It will be very positive because bitcoin or other cryptocurrencies cannot really realize their network potential in terms of mass adoption until they become part of the system, Wood told Greed and Fear.

In the past two weeks, Chinese institutions have stepped up their fight against bitcoin mining after the People’s Bank of China (PBOC) reminded the country’s banks not to engage in crypto activities.

According to the Chinese central bank, speculative trading in virtual currencies will disrupt the normal functioning of the economy and the financial market.

According to industry estimates, more than 90% of bitcoin mining in China is closed, which is about a third of the processing power of the global cryptocurrency network.

According to Wood, this is a big deal because the message is that China doesn’t want its citizens to own crypto assets. This is partly due to the clear possibility of using so-called stable jackets, such as Tether, to circumvent the closed capital account. And, above all, China does not want the competition to adopt the digital renminbi nationwide, probably in the fourth quarter of this year. years, Wood said.

The digital currency of the Chinese Central Bank (CBDC) is expected to give the government full transparency about the savings and consumption habits of its citizens.

The decentralized aspect of blockchain technology, which is so appealing to libertarians who see fiat currencies as state monopolies, is the opposite of the Chinese collective system. The People’s Republic of China clearly understands this. This is certainly something much more important. a problem for Beijing regarding the carbon-generating aspects of bitcoin mining, Wood wrote.

Jefferies, who added Bitcoin to his recommended portfolio for a $ 22,779 pension fund in December, maintained a 5% stake in the portfolio.

Thanks to institutional demand from companies like Tesla and MicroStrategy, Bitcoin hit a new high of $ 64,804.72 on April 14. However, concerns about the environmental impact of bitcoin mining and the regulatory collapse in China, the world’s largest cryptocurrency, have dropped nearly 50% from their daily high.

The digital asset was trading at $ 34,950, up 5.5% as of 2:30 pm, according to CoinGecko.

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