China bans Bitcoin again: 3% drop followed by 10% rebound

China bans Bitcoin and markets react with a 10% rally

Can a government ban Bitcoin? China tries every few months, and the market’s response is always the same: a brief scare trinc by days of gains. Last time, Bitcoin dropped more than 3% in 24 hours to $42,239, while Ethereum fell 7% to $2,860, according to Coin Metrics. A week later, it rose another 3%, and the next day, more than 10%.

This seems like a contradiction, but it isn’t. What was banned was not ownership, the network, or the global market. It was the usual target: the part Beijing believes it can control. The rest continued operating at its own pace.

How many times has China banned Bitcoin?

The market itself has lost count. The circulating figure is eight, nine, nobody knows anymore, and the tone resembles Groundhog Day: announcement, brief plunge, sensational headlines, and recovery. The prevailing feeling is that announcements come when convenient, are dosed out, and repeated, and no longer fool anyone.

There is a more prosaic explanation. A ban announced repeatedly loses its shock value: the market discounts it before publication. Years ago, such news might have caused a 50% correction; now it stays within a single-digit move and a week of patience. As one market phrase goes: an 8% drop is a quiet day at the office; alert us when it reaches 60%.

Evergrande and Bitcoin: the correlation no one asked for

Alongside the Chinese announcement, media focus shifted to Evergrande: accounts abroad with no bond payments, according to Bloomberg. The timing coincidence fueled the smokescreen theory: the real estate crisis of a Chinese developer distracting attention from cryptocurrencies.

The argument holds poorly. They are two distinct fronts, with different calendars and responsible parties, yet they appeared attached to the same headline. This is the underlying problem: in a 24-hour market reacting to everything, two simultaneous news items become one cause. Correlation forms automatically.

Will other countries trinc China?

The reasonable doubt was whether other governments would copy the script. The answer came on October 1, 2021: Jerome Powell, Chair of the US Federal Reserve (the central bank), testified before the House Financial Services Committee and expressed support for regulating the cryptocurrency market, not banning it. Bitcoin surged more than 10% that day.

This detail undermines the narrative of a global ban. Regulating and banning are opposites, and the leading financial power chose regulation. As several participants note, with major firms holding Bitcoin positions, a coordinated veto is hard to sustain: those banning themselves are excluded from a market others continue to trade.

The practical aspect remains. Mining migrates: there are always jurisdictions willing to host computing farms, and the hash rate relocates within weeks. What is lost in one place is installed in another. China does not shut down the network; it simply steps away from the business.

Bitcoin holdings no one declares

The most uncomfortable piece of the puzzle is silent holdings. Bulgaria appears with 200,000 bitcoins and does not even appear in standard lists. Michael Saylor holds more than 120,000 and is pointed to as the hidden American holder. From there, speculation begins: if the asset is a geostrategic point, it makes sense to have infrastructure ready before water arrives.

This reading fits the hypothesis of a cleared private market to later introduce a state digital currency. Without official confirmation, it aligns with the pattern of secrecy and two-track games. The complete inventory of who holds how much, with names and amounts, circulates in more detail than fits here.

What data from that week says and hides

The episode’s balance leaves three contradictory figures: a 3% drop in Bitcoin, a 7% drop in Ethereum, and a 9% to 10.5% rebound in just days. The range around $40,000 held throughout, with the sense that interests existed to prevent it from breaking either up or down.

Meanwhile, the underlying reading remains divided between those seeing prior accumulation before a year-end bullish cycle and those arguing each scare is a buying opportunity. The most optimistic predictions speak of $100,000 by Christmas, and the most exaggerated of $400,000.

---

The prevailing conclusion is as unepic as the episode itself: the country that has announced Bitcoin bans for years still cannot stop it, the market that scared for hours ended up celebrating the Federal Reserve’s intervention, and the only undisputed figure is that of the neighbor who has been saying for years this was going nowhere. Still waiting.]