Melting of the Bitcoin market gives a new warning in China that the value of the world’s leading cryptocurrency may fall to zero
The recent meltdown of the global cryptocurrency industry has led to a new warning in China that the value of bitcoin may fall much further and be worthless, as Beijing renewed its efforts to dissuade Chinese investors from all cryptocurrency-related activities.
An article published on Wednesday by Economic daily newspaperA newspaper directly under the Central Committee of the ruling Chinese Communist Party said investors should beware of the risk of bitcoin prices “heading towards zero” in the midst of the recent downturn in the world’s first and leading cryptocurrency.
“Bitcoin is nothing more than a series of digital codes, and the return comes mainly from buying low and selling high,” the newspaper said. “In the future, when investor confidence collapses or when sovereign countries declare bitcoin illegal, it will return to its original value, which is completely worthless.”
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The Economic daily newspaperThe latest recipe comes a month after it used, for example, the collapse of stablecoins terraUSD and luna to justify China’s ban on cryptocurrency trading.
Bitcoin signage will be displayed at the CoinDesk 2022 Consensus Festival in Austin, Texas, June 9, 2022. The festival showcased the activities of the cryptocurrency, blockchain, NFT and Web3 ecosystems. Photo: Bloomberg alt = Bitcoin signage displayed at CoinDesk 2022 Consensus Festival in Austin, Texas, June 9, 2022. The festival showcased the activities of the cryptocurrency, blockchain, NFT and Web3 ecosystems. Photo: Bloomberg>
The lack of regulation in Western countries, such as the United States, helped create a highly leveraged market that is “full of manipulation and pseudotechnological concepts,” the newspaper said. It described it as an “important external factor”, which has contributed to the volatility of bitcoin.
The recent state media warning reflects Beijing’s firm stance on all cryptocurrency activities banned by the government – including trade, collection and mining – as the global market saw popular digital tokens lose more than half of their value.
Bitcoin resumed the slump on Wednesday, moving in line with weakened stocks amid growing concerns about a global recession. It fell as much as 2.9 percent to $ 20,244. Ether, the world’s second leading digital token, fell 3.3 percent to $ 1,084.80.
The price of bitcoin fell to a new low this year of 17,958.05 dollars over the weekend, but showed a mild rise to over 20,000 dollars on Monday. Bitcoin prices have fallen more than 50 percent since the beginning of this year, while ether has fallen in value by over 70 percent.
The tightening of monetary policy in Western economies has led to a global sale of a number of risky assets, including cryptocurrencies, while a growing number of cryptocurrency lending platforms, hedge funds and stablecoin issuers are now stuck in financial distress.
In a separate warning, the Financial Regulatory Bureau of Shenzhen said in a statement on Tuesday that trading in cryptocurrencies and speculation puts people’s “property security in serious danger”, breeds criminal activity and disrupts financial order. It warned investors to be involved in illegal economic activities and to avoid being scammed.
The agency quoted a statement issued in September last year by China’s central bank, which declared all cryptocurrency transactions illegal, identified offshore exchanges targeting mainland Chinese users and promised to take action against citizens marketing such illegal services.
Nevertheless, enthusiasts across the country are known for finding solutions to skirt restrictions and staying active underground. Last week, it prompted the southern province of Guangdong to promise more action against covert crypto-related activities.
On OKX, one of the world’s largest cryptocurrency exchanges by trading volume, more than 9 percent of computer traffic came from China on Wednesday, according to data from the online analysis company SimilarWeb.
Topics related to cryptocurrencies, including bitcoin, have repeatedly become popular searches on the Chinese microblogging service Weibo every time large price falls occur.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice that has reported on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit SCMP’s Facebook and Twitter sides. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.
