It is quite well-known that the government of China does not have a favorable view of Bitcoin, or the rest of the cryptocurrency market. The ongoing turmoil in the crypto space has provided the Chinese government with more ammunition to attack the market and criticize it. The government recently warned the citizens that they could be in for massive losses because the price of Bitcoin would eventually hit zero.
Bitcoin to Become Worthless
On June 22nd, a report from the South China Post disclosed that a warning had been issued by Chinese state media about crypto investments. According to the warning, the market capitalization of the world’s largest cryptocurrency will reduce to zero. Therefore, the government urged people to not make investments in the crypto space because it is extremely volatile.
Economic Daily also published a report, which put the blame on Western countries for the crash in the crypto market. According to the report, a highly-leveraged market had been created by these nations, which had become easy to manipulate because of its reliance on pseudo technologies. The report claimed that these were the factors that had added to the volatility of bitcoin.
The report further asserted that Bitcoin is just a series of digital codes and the only way for people to make money through it is to buy it low and then sell it high. It said that Bitcoin would become utterly worthless in the future, after investors lose their confidence and when the world’s first cryptocurrency is declared illegal by sovereign countries.
Crypto Market in China
In the past year, the Chinese government has launched a severe crackdown against the crypto market in the country. Bitcoin trading and mining was banned and foreign companies were also ordered to shut down. However, this has not stopped crypto activities in the country completely, as a recent report showed that China still has the second-highest hash rate for bitcoin mining.
Moreover, it should be noted that it is not just cryptocurrencies that have gained popularity in China. Non-fungible tokens (NFTs) have also seen their demand go up, as statistics show that the number of NFT companies in the country has gone up by five times this year since February and has gone past 500.
BoE Sees Potential in the Crypto Space
Even though the crypto market is currently bearish, the Bank of England believes that focusing on the space can offer a lot of benefits. The BoE’s deputy governor, Jon Cunliffe said that crypto companies that are able to pull through the bearish market would be the ones that will dominate the industry. He said that crypto finance and technology is not going anywhere, regardless of what happens in the next few months.
The governor said that there would be changes in market structure and huge efficiencies would be seen. The remarks from China come when the crypto space has lost almost $2 trillion of its market value and Bitcoin has also come down to its lowest value since December 2020.