The warning came from the Official Chinese national news media outlet that Bitcoin could go to zero value in order to discourage the investors from investing in and using cryptocurrency.
The Chinese government has exploited the violent recession in the crypto market to warn crypto investors that Bitcoin prices are “heading to zero.”
According to The South China Morning Post on June 22, the Chinese national news media agency Economic Daily issued a warning about the largest cryptocurrency by market cap to further discourage citizens from accepting the use of crypto.
The Economic Daily report is blamed for creating a highly-leveraged market that is “full of manipulation and pseudo-technology concepts” which it claimed was an “important external factor” that affects Bitcoin’s volatility.
The newspaper said, “Bitcoin is nothing more than a string of digital codes, and its returns mainly come from buying low and selling high”.
“In the future, once investors’ confidence collapses or when sovereign countries declare Bitcoin illegal, it will return to its original value, which is utterly worthless.”
Last July the Chinese government banned Bitcoin mining and has grand plans to launch CBDC, its central bank digital currency called the digital Chinese yuan (e-CNY) nationwide. All cryptocurrency transactions were banned last September, while the foreign crypto exchanges were banned from operating within the country in 2018.
The Chinese Government isn’t the only one evaluating it with predictions about where they see Bitcoin’s price going.
Tom DeMark, founder and CEO of market analysis firm DeMark Analytics told Marketwatch on Monday that he believes the crypto market is in line for prolonged price reductions because BTC has fallen below 50% from its November peak of $69,000,
“Such breakdowns bespeak a high probability that recovery to the all-time Bitcoin highs will require many years, if not decades, to accomplish.”
Nevertheless, there is still a chance for it to bounce back into the $40,000 range within the next few months as he said.
“This does not negate the prospect of up to 50-56% recovery over upcoming months which implies bitcoin rally back to $40,000-$45,000.”
Instead of Beijing’s warnings, the Bank of England (BOE) has begun to see the benefit of building wealth in the crypto space during a bear market.
On June 22, the Deputy Governor for the BOE Jon Cunliffe told Bloomberg that the crypto firms that succeed to stay afloat during the current recession could be the “dominant players” in the industry when things turn around.
“Whatever happens over the next few months to crypto-assets, I expect crypto technology and finance to continue. It has the possibility of huge efficiencies and changes in market structure.”
Meanwhile, on June 19, El Salvador’s President Nayib Bukele addressed the Bitcoin world in regards to the slumping of BTC prices. He tweeted that people should “stop looking at the graph and enjoy life,” because he is confident that prices will recover.
President Bukele has been accused of investing in the cryptocurrency and sustaining tens of millions in losses so far but Minister of Finance Alejandro Zelaya has claimed that they are not losses “because we have not sold the coins.”
BTC is trading at $20,386, 71% down from its high and 0.7% down over the past 24 hours according to CoinGecko as of the time of this write-up.
Leave a Reply