As the cryptocurrency market drops below $ 1.000 trillion, China capitalizes on its anti-Bitcoin stance. China's state-run Economic Daily recently stated that Bitcoin investors should remain cautious, predicting the world's largest cryptocurrency is "heading towards zero."
Does Beijing Hate Cryptocurrencies?
This is part of Beijing's ongoing efforts to dissuade its citizens from participating in cryptocurrencies. Interestingly, Chinese state media blame the West for creating a highly leveraged market "full of manipulations and pseudo-technological concepts". The Economic Daily noted that this is an "important external factor" contributing to the volatility of Bitcoin's price. As reported by the South China Morning Post (SCMP), the Chinese media stated:
Bitcoin is nothing more than a string of digital codes and its returns come mainly from buying down and selling up. In the future, when investor confidence collapses or when sovereign countries declare Bitcoin illegal, it will revert to its original value, which is completely worthless.
China has completely outlawed any type of cryptocurrency-related activity taking place in the country. This includes banning cryptocurrency trading, mining, fundraising, and more.
Earlier this week, in a separate notice, the Shenzhen Financial Regulatory Bureau said that cryptocurrencies can seriously endanger people's "security of property". According to the Office, cryptocurrencies can foster criminal activity and upset the financial order.
Last weekend, the price of Bitcoin dropped below $ 18.000 due to strong miners' capitulation. Bitcoin miners sold their BTC stocks in large numbers to cover operating costs. Additionally, Google searches for "Bitcoin Dead" hit an all-time high.
Bitcoin optimism in the West
Although China has pushed its anti-Bitcoin stance, not all market players have lost hope for Bitcoin. The Bank of England (BoE) sees upside potential and an opportunity to build wealth in the bear market. Speaking with Bloomberg on Wednesday, BOE Deputy Governor Jon Cunliffe shared some positive views.
He said cryptocurrency companies that managed to weather the current crisis could emerge as "dominant players" in the industry. Cunliffe added:
Whatever happens to crypto assets in the coming months, I expect crypto technology and finance to continue. It has the potential to create huge efficiencies and changes in the market structure.
The price of Bitcoin continues to fluctuate around $ 20.000 and could enter a long phase of consolidation. Analysts are wondering if the formation of the Bitcoin fund has already taken place. However, some believe that Bitcoin may drop further due to the uncertainties of the global macro situation.
Absolute Strategy Research CEO Ian Harnett expects Bitcoin to bottom out at around $ 13.000. Billionaire investor Mark Mobisu is also expecting a further drop in the price of BTC. Speaking to Bloomberg, he stated that: Bitcoin investors “still talk about buying on the downside, which means there is a feeling of hope. This also means that we have not reached the bottom of a bear market ”.