Posted 2 years ago | by Ben Armstrong
China Allows News About Ethereum on State Television – Does Beijing Need Crypto?
In a recent coverage by the CCP state media, Ethereum DeFi was featured as one of the main reasons for the rush higher in Bitcoin prices after the early crash in 2020.
Talk about crypto also went out on social media about the news – although many don't understand the risks that surround fiar currency – especially in China where food inflation is running hot.
A twitter user under the handle of @OmniscientAsian summed up the entire report as:
“Bitcoin and cryptocurrencies are the best performing asset this year (bullish). However, due to its speculative nature, the uncertainty remains significantly high (bearish).”
加密货币 on CCTV2 cryptocurrencies on China state television pic.twitter.com/IEysx8rasL
— Matthew Graham (@mattysino) September 25, 2020
The user also explained that even though the rise in gold prices is noteworthy, from an investment standpoint, cryptos are among the best assets due to their phenomenal performance.
China Might be on The Cusp of an Economic Breakdown
The Chinese media outlet compared the growth between difference crypto assets value in comparison to gold.
The value of gold rose up to 20% during this year, but a basket of tokens has risen by as much as 70% over the same time period. Bitcoin saw over 49.48% growth and the most important contributing factor was the bullish 169.4% increase in value of Ethereum thanks to the DeFi craze.
According to historical data, at the beginning of 2020, Ethereum was trading at around $130 – and it is sitting more than $200 higher at the time of writing. That is amazing performance – and it could go much higher in the coming years.
Is the CCP Pushing Crypto?
We know that historically the CCP has not been the greatest advocate to cryptocurrencies. However – China may see that a major currency crisis is near – and it wants its citizens to buy alternative assets – crypto included.
A part of this ploy may be to draw the attention of Chinese investors to digital currency. This could be leverage for an easier sell of their up-coming central bank digital currency (CBDC) to the masses – as most people don't understand the nuances of digital assets.
This also comes at a time when most of the large central banks are developing a CBDC of some kind – so it would fiat that China would do what it can to make digital assets seem as attractive as possible.
That said – crypto is essentially illegal in China – even though the nation remains a huge Bitcoin miner.
You Can't Eat Gold or Crypto
Sound forms of money are great – and they are likely to appreciate further when measured by fiat currency. Unlike the USA and Russia – China doesn't make nearly enough food for its population – and many of the reserves it has are likely rotten.
For the moment China has been able to offset its crop failures and poor reserve storage protocols via purchases from the USA and South America – but those supply lines are long and subject to any number of issues.
China's government might be waking up to the fact that brute force, repression, and propaganda can't actually feed its population – which leaves it in a tricky situation should tensions with the US escalate.
Convoy raiding in WW2 wasn't difficult – today – precision strike missiles and GPS make hunting grain carriers at sea very, very easy. China needs to rethink its global ambitions, as its navy can't protect the supply lines that keep the nation fed.
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