China's influence on the crypto market is significant due to its position as one of the world's largest economies. The country has a complex history with cryptocurrencies, including a ban on financial institutions transacting in virtual currencies since 2013.
In 2021, China implemented its most severe measures against crypto, including a ban on all trading and transactions, citing concerns over scams, money laundering, and environmental impact.
While there are indications that China may be changing its stance towards crypto, the specifics of this change are unclear. If the ban is lifted, it could have a major impact on the global crypto market, but regulatory challenges and increased volatility could arise. It is important to note that even if restrictions are eased, the sector will remain tightly regulated.