The Impact of China's Virtual Currency Policy on the Bitcoin Market

Abstract

This thesis aims to understand and analyze the impact of China's virtual currency policy on the Bitcoin market. This paper will summarize the impact of digital technology on cryptocurrencies, including the development path, technological development, process, and regulation through literature search, data analysis, and government policies to comprehensively analyze the impact of the virtual currency policy on cryptocurrency circulation. Regulators and governments must formulate appropriate policies and measures to ensure compliance and stability in the cryptocurrency market. This paper analyzes the Bitcoin market as an example by using a mathematical model to reflect the trend and direction of the market before and after the release of the policy and using the model to predict future changes in the Bitcoin market. The Chinese government's regulatory measures have led to the closure of several Bitcoin miners, which has affected Bitcoin mining activity. Second, the decline in liquidity in the Chinese market has led to short-term volatility in the price of bitcoin. In addition, some investors may view Bitcoin as a safe-haven asset against an uncertain policy environment. Overall, China's virtual currency policies have had a multifaceted impact on the Bitcoin market, and these impacts are still evolving to some extent. This research provides valuable insights into the dynamics of the global Bitcoin market and the impact of virtual currency regulation.