In a classic case of how rumors and speculation can still have a strong role to play on Bitcoin and the related cryptocurrency market, the price of Bitcoin tanked on false rumors. Bitcoin is hovering around $7,500. It started dropping when it was feared that offices of Binance, in Shanghai, had been raided.
This rumor turned out not only to be false but impossible. Speaking with Cointelegraph, a spokesperson from Binance refuted the claims and explained why this would never happen.
“The Binance team is a global movement consisting of people working in a decentralized manner wherever they are in the world. Binance has no fixed offices in Shanghai or China, so it makes no sense that police raided on any offices and shut them down,” they said.
Once that had been pretty much cleared up, a new rumor sprang forth from Shanghai that exclaimed the shut down was actually South Korean Exchange Bithumb and its offices in the Chinese city.
Still, this is apparently not true either as a spokesperson from that exchange quashed the rumors, stating: “We have one of our blockchain technology research and development teams based in Shanghai and the projects are continuing steadily without pause,” a Bithumb spokesperson told The Block.
While these claims are now proven to be false, one has to wonder if there is any fire behind this smoke. China has become more amenable to cryptocurrency in recent times, although it has never openly accepted them.
In fact, the Chinese government has been scrutinizing crypto businesses with the People’s Bank of China (PBOC) and the Shanghai Municipal Financial Regulatory Bureau ordering agencies in the city to investigate cryptocurrency-related activities.
Perhaps there is some activity in the People’s Republic, but in the Western World, the reporting on such events seems to be convoluted and confused. While this is understandable, but not excusable, it also points out the damage that can be done with a lack of true information on a nascent Bitcoin market.
No doubt, this miscommunication, fear, speculation, and threat of intervention by the Chinese government will play its part on the sentiment around the cryptocurrency space. The ecosystem is still fighting to be legitimized and normalized, but these instances are black marks in the eyes of regulators.