Last month China's central banking company, the People's Bank of China (PBoC), published a memo criminalizing practically all cryptocurrency activeness. When the memo started circulating online, Bitcoin'southward (BTC) price dropped over 6.5%. Soon afterward, nevertheless, industry experts suggested that the news may have been the ultimate dip-buying opportunity.

China's crackdown on crypto started years agone, to the point that Bitcoin suffered its biggest mining difficulty drib of nigh 28% in July of this yr as miners started migrating out of Cathay after the government tightened its grip on bitcoin mining and trading. The crackdown saw the computing power securing the Bitcoin network — its hash rate — drop by virtually 50%. The PBoC's contempo memo meant every remaining mining operation and commutation had to close down.

Fast forward to October, and Bitcoin mining operations announced to exist recovering. According to on-chain analytics provider Glassnode, BTC's hash rate has largely recovered from the slump caused by Red china's crackdown.

The business firm's "Calendar week On-chain" report antiseptic that both BTC'southward hash charge per unit and mining difficulty, which measures competition among miners securing the network, were both on a "consequent path to recovery." Data shows Bitcoin's hash rate is now shut to its pre-exodus levels while maintaining an upward trajectory.

Sacha Ghebali, director of business and strategy at cryptocurrency data provider TheTie, talked to Cointelegraph almost the quick recovery:

"A lot of miners have been buying hash charge per unit from Chinese miners following the ban, which together with the rise of U.S. institutional mining activity may account for the hash rate recovery."

Ghebali added that the "quick crypto market recovery has been generally fueled past the prospects of a futures ETF finally coming to the marketplace," which would generate "intense buying pressure."

Bitcoin's cost is believed to take risen earlier this month in response to increased speculation that such an ETF would be approved past the United States Securities and Exchange Commission (SEC). Bloomberg senior analyst Eric Balchunas has said he is 75% sure approval is imminent. China'south crackdown seemingly weighed less on the marketplace than the prospect of a Bitcoin ETF in the U.Southward.

Bitcoin whales purchase the dip

Blockchain data shows that large players took advantage of Bitcoin'southward price drop from the PBoC's memo to purchase the dip and add more BTC to their stashes. Ki Immature Ju, CEO of crypto analytics firm CryptoQuant, flagged on Twitter that someone bought "up to $1.6 billion worth of BTC via market orders" in just five minutes on a centralized exchange.

Speaking to Cointelegraph, Pete Humiston, manager at Kraken Intelligence — a partitioning at the pop exchange that analyzes on-chain data — dismissed China's ban, saying:

"Final month was the fourteenth fourth dimension in the past decade when Chinese authorities accept croaky down on the crypto industry. It is possible that markets have at present fully priced in a China crackdown, with each subsequent announcement having less of an impact on spot prices."

Humiston stated that long-term holders joined whales in taking reward of the news, adding that the proportion of Bitcoin held past whales, defined equally wallets with more than than 100 BTC, reached a new all-time high of eleven.88 million BTC in mid-September.

The analyst noted that those wallets represent more than one-half of the total BTC supply, adding that consistent aggregating placed pressure on BTC'south marketable supply, "making the asset subject to a jump in volatility amid growing need." According to Humiston, this helps explain the surge to a higher place $50,000.

He added that Kraken Intelligence has found that, while markets initially sell-off in response to negative headlines from Red china, historically, BTC "went on to rally more +50% in the 90 days that followed."

Whales and long-term holders may not take been the only ones accumulating BTC after the ban, every bit information from Glassnode shows the number of BTC addresses belongings over ane coin reached a 4-calendar month high this week.

Marie Tatibouet, chief marketing officer at cryptocurrency substitution Gate.io, told Cointelegraph that Federal Reserve Chairman Jerome Powell'south statement that the Fed has no intention of banning Bitcoin could besides have led to the accumulation.

Unique Bitcoin addresses

While Bitcoin's toll recovery may be explained by other factors such as the U.S. response to China's cryptocurrency ban, the number of unique Bitcoin addresses being used on the blockchain has likewise been ticking upwardly.

It's impossible to accurately tell how many people use Bitcoin, equally whatsoever entity tin can create hundreds if non thousands of addresses. Unique accost numbers are often used to guess user levels on the blockchain because most users stick to ane or two active addresses.

Speaking to Cointelegraph, Nick Jones, CEO and co-founder of cryptocurrency wallet and exchange Zumo, suggested that unique address usage may be increased as marketplace participants are now more than certain of what'due south ahead:

"Markets like certainty. China banning crypto has been a recurring headline for so many years now that making a clean break brings much-needed clarity and is easily absorbed in the longer-term, just like nosotros saw with the forced relocation of mining infrastructure out of China earlier in the year."

The entrepreneur added that information technology's no coincidence that China is pushing out its own central bank digital currency, suggesting that the move wasn't "any fundamental statement on crypto or the blockchain," but instead came to eternalize the adoption of its own digital currency.

Jack McDonald, CEO of crypto-asset custodian Standard Custody and Trust, said Prc's ban is a "skillful affair for confidence in crypto," but suggested marketplace activeness has been going upwardly equally cryptocurrency markets historically trend up during the last quarter of the year.

Nevertheless, McDonald offered another explanation for the growing number of unique addresses:

"Information technology'due south moves like these that inspired Satoshi to create Bitcoin in the outset place as an culling to authorities-issued and controlled fiat currencies. Mainland china has always had strict capital controls on its citizens, so information technology makes sense that they would ban crypto, which has been a common mode for its citizens to escape capital controls."

Whether cryptocurrency market participants gained conviction from China'southward all-out ban, simply ignored it and are expecting up momentum in Q4, or adopted crypto to escape capital controls, one thing is certain: The market place has been recovering over the final few months.