Concise insights on global finance.
DEVOUTLY TO BE WISH’D. Beijing is reviving its distrust of cryptocurrencies. In 2017 it shut down domestic exchanges, but stopped short of making it illegal to own bitcoin and left miners alone. Now they too are being forced to shut down read more , partly because bitcoin production consumes 128 terawatt hours of energy per year. Chinese regulators with experience fighting speculation in exotic assets like egg futures and ornamental walnuts are also trying to stop financial institutions from dabbling in crypto assets, which are particularly risky as they evade capital controls. As with the prior crackdown, decision-makers in Beijing have set off a double-digit drop in bitcoin’s value .
Suspicions about crypto-currencies’ economic utility look validated read more . It’s unclear how long it will take to migrate the 65% of production capacity currently in China to other locations, so the market could remain unstable. Yet those who like trading them might appreciate how decoupling bitcoin from Beijing’s whims will reduce volatility. For fans and critics alike, there’s plenty of upside to this crash. (By Pete Sweeney)
On Twitter http://twitter.com/breakingviews
Earlier in Capital Calls:
Congress seems relaxed over SPACs read more
“Friends” reunion bookends AT&T too read more
Latest shale deal worse than none read more
Total makes good amuse-bouche for governance rejig read more
Greek bank relaunch relies on same old fuel source read more
Reuters Breakingviews is the world’s leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.