China warns Bitcoin is heading to zero but BoE looks on the bright side

Published at: June 23, 2022

The Chinese government has capitalized on the violent downturn in the crypto market by warning crypto investors that Bitcoin (BTC) prices are “heading to zero.” 

The South China Morning Post reported on Wednesday that the Chinese national news media agency Economic Daily had issued a warning about the largest cryptocurrency by market cap to further dissuade citizens from adopting the use of crypto.

The Economic Daily report says the west is to blame for creating a highly-leveraged market that is “full of manipulation and pseudo-technology concepts,” which it said was an “important external factor” which contributes to Bitcoin’s volatility.

“Bitcoin is nothing more than a string of digital codes, and its returns mainly come from buying low and selling high,” said the newspaper:

“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.”

The Chinese government banned Bitcoin mining last July and has grand plans to launch its central bank digital currency (CBDC) called the digital Chinese yuan (e-CNY) nationwide. It banned all cryptocurrency transactions last September and infamously banned foreign crypto exchanges from operating within the country in 2018.

The Chinese Government isn’t the only one weighing in with predictions about where they see Bitcoin’s price going.

On Monday, founder and CEO of market analysis firm DeMark Analytics Tom DeMark told Marketwatch 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.”

However, there is still a chance for it to bounce back into the $40,000 range within the next few months 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.”

In contrast to Beijing’s warnings, the Bank of England (BOE) has begun to see the upside potential of building wealth in the crypto space during a bear market.

Deputy Governor for the BOE Jon Cunliffe told Bloomberg on Wednesday that the crypto firms that manage to stay afloat during the current downturn 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, El Salvador’s President Nayib Bukele addressed the Bitcoin world on Saturday in regard to the slumping BTC prices. He tweeted that people should “stop looking at the graph and enjoy life,” because he is confident that prices will recover.

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 invested in #BTC your investment is safe and its value will immensely grow after the bear market.Patience is the key.

— Nayib Bukele (@nayibbukele) June 19, 2022

President Bukele has come under fire for investing in the cryptocurrency and sustaining tens of millions in losses so far, but Minister of Finance Alejandro Zelaya has argued that they are not losses “because we have not sold the coins.”

Related: Friday’s $2.25B Bitcoin options expiry might prove that $17.6K wasn’t BTC’s bottom

As of the time of writing, BTC is trading at $20,386, 71% down from its high and 0.7% down over the past 24 hours, according to CoinGecko.

Tags
Adoption
Bitcoin
Bitcoin Price
China
Bank Of England
Related Posts
On the fence: If this is a crypto bear market, how long can it last?
It has now been three months since Bitcoin’s price peaked at an all-time high just shy of $65,000. For most of the last two months, Bitcoin (BTC) has been trading in the $30,000–$40,000 range, as much as 54% lower than its peak The downturn came at a time when many analysts were predicting exactly the opposite — a bull cycle set to run to new record highs within months — with some even speculating that a six-figure BTC price would materialize this year. So, what’s going on? Is the current market downturn just a blip on an otherwise upward trajectory, …
Adoption / July 17, 2021
Susquehanna’s Digital Asset Head Bart Smith: Bitcoin Is Certainly Speculative and Risky
The head of digital assets at Susquehanna, a leading global privately held financial institutional firm, said that bitcoin (BTC) investment is “certainly speculative.” Susquehanna’s Bart Smith discussed the major cryptocurrency’s most recent moves in an episode of CNBC’s "Squawk Box" on May 30. Addressing the basic question of bitcoin’s high volatility, which some consider prevent it from being considered as a store of value or a reliable medium of exchange, Smith argued that bitcoin investments are speculative and risky. In the CNBC interview, the crypto expert looked at major factors that may have caused the recent bull move on the …
Adoption / May 30, 2019
Resistance is futile! 3 reasons why Bitcoin mining will never go away
In the summer of 2021, the Chinese government banned Bitcoin (BTC) mining and cited the typical concerns of harmful environmental effects and money laundering. Now, the Chinese government is working toward establishing its own digital yuan currency. This raises the question as to whether the original reasoning was merely a Trojan horse. This ban could easily have been a huge blow to Bitcoin’s momentum. After all, close to 75% of all Bitcoin mining had been conducted in China by late 2019, according to Cambridge Alternative Finance Benchmarks. If the network teetered under the weight of China’s nationwide ban, other governments …
Adoption / June 16, 2022
Bitcoin’s current setup creates an interesting risk-reward situation for bulls
The Bitcoin (BTC) chart has formed a symmetrical triangle, which currently holds a tight range from $28,900 to $30,900. This pattern has been holding for nearly two weeks and could potentially extend for another two weeks before price makes a more decisive movement. For those unfamiliar with technical analysis, a symmetrical triangle can be either bullish or bearish. In that sense, the price converges in a series of lower peaks and higher lows. The decisive moment is the support or resistance breakthrough when the market finally decides on a new trend. Thus, the price could break out in either direction. …
Bitcoin / May 23, 2022
El Salvador's Bitcoin decision: Tracking adoption a year later
El Salvador, the small Central American nation that made history just over a year ago when it made Bitcoin (BTC), recently marked its first year of BTC adoption. The Salvadoran government touted BTC as a tool to attract foreign investment, create new jobs and cut reliance on the United States dollar in the country’s economy at the time of adoption. Many BTC proponents and the libertarian community rallied behind the small nation despite mounting pressure from global organizations such as the World Bank and International Monetary Fund (IMF) to remove BTC as a legal tender. A lot has changed over …
Adoption / Sept. 23, 2022