The Chinese government has taken advantage of the violent cryptocurrency market crash to warn crypto investors that bitcoin (BTC) prices are “heading for zero.”
The South China Morning Post reported on Wednesday that the Chinese national news agency Economic Daily had issued a warning about the largest cryptocurrency by market capitalization to further deter citizens from adopting the use of cryptocurrencies.
The Economic Daily report said that the West is to blame for creating a highly leveraged market that is “riddled with manipulation and pseudo-tech concepts,” which it said was a “major external factor” contributing to bitcoin’s volatility.
“Bitcoin is nothing more than a chain of digital codes, and its returns come mainly from buying low and selling high,” the newspaper states:
“In the future, when investor confidence collapses or when sovereign countries make Bitcoin illegal, it will return to its original value, which is zero.”
The Chinese government banned Bitcoin mining last July and has big plans to launch its central bank digital currency (CBDC) called the Chinese digital yuan (e-CNY) across the country. It banned all crypto transactions last September and infamously banned foreign crypto exchanges from operating within the country in 2018.
The Chinese government is not the only one weighing in with predictions about where they see the price of bitcoin.
On Monday, the founder and CEO of market analysis firm DeMark Analytics, Tom DeMark, told Marketwatch that he thinks the cryptocurrency market will go into a prolonged price pullback because BTC has fallen below 50% since its November peak of $69,000:
“Such declines denote a high probability that bitcoin’s recovery from all-time highs will take many years, if not decades, to achieve.”
However, there is still a chance that it could bounce back to the $40,000 range in the coming months.said:
“This does not negate the prospect of a recovery of up to 50-56% in the coming months, which implies that bitcoin goes back up to $40,000-45,000.”
In contrast to Beijing’s warnings, The Bank of England has started to see the upside of wealth creation in the cryptocurrency space during a bear market.
The Deputy Governor of the Bank of England, Jon Cunliffe told Bloomberg on Wednesday that crypto firms that manage to stay afloat during the current downturn could be the “dominant players” in the industry when things turn:
“Whatever happens in the next few months with crypto assets, I expect crypto technology and finance to continue. It has the potential to generate huge efficiencies and changes in the structure of the market.”
Meanwhile, the president of El Salvador, Nayib Bukele, spoke about the world of bitcoin on Saturday in relation to the fall in BTC prices. He tweeted that people should “stop looking at the chart and enjoy life,” because he is confident prices will bounce back.
I see that some people are worried or anxious about the #bitcoin market price.
My advice: stop looking at the graph and enjoy life. If you invest in #BTC your investment is safe and its value will grow immensely after the bear market.
Patience is the key.
– Nayib Bukele (@nayibbukele) June 19, 2022
I see that some people are concerned or anxious about the market price of bitcoin. My advice is this: stop looking at the chart and enjoy life. If you have invested in BTC, your investment is safe and its value will grow immensely after the bear market. Patience is the key.
President Bukele has been criticized for having invested in cryptocurrency and sustaining tens of millions in losses so far, but Finance Minister Alejandro Zelaya has argued that they are not losses “because we have not sold the coins.”
At the time of writing, BTC is trading at $20,386, down 71% from its high and down 0.7% in the last 24 hours, according to CoinGecko.
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