China warns that Bitcoin is heading towards zero but the BoE is looking on the bright side


The Chinese government has capitalized on the severe downturn in the crypto market by warning crypto investors that Bitcoin prices are “heading towards zero.”

The South China Morning Post reported on June 22 that China’s national news agency Economic Daily issued the warning about the largest cryptocurrency by market capitalization to further deter citizens from adopting the use of crypto.

The Economic Daily report says the West is responsible for creating a highly leveraged market that is “full of manipulative concepts and pseudo-technology” which it said was a “significant external factor” that contributes to the volatility of Bitcoin.

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

“In the future, once investor confidence plummets or when sovereign countries declare Bitcoin illegal, it will revert to its original value, which is completely worthless.”

The Chinese government banned Bitcoin mining last July and has big 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 notoriously banned foreign crypto exchanges from operating in the country in 2018.

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The Chinese government isn’t the only one weighing in with predictions about where Bitcoin’s price will go.

On Monday, the founder and CEO of market analytics firm DeMark Analytics, Tom DeMark, told Marketwatch that he believes the crypto market is in line for prolonged price cuts as BTC fell below 50% from its November peak of $69,000,

“Such outages indicate a strong likelihood that recovery to Bitcoin’s all-time highs will take many years, if not decades, to accomplish.”

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

“This does not negate the prospect of a recovery of up to 50-56% over the next few months, implying bitcoin’s return to $40,000-$45,000.”

Contrary to warnings from Beijing, the Bank of England (BOE) has started to see the growth potential of wealth creation in the crypto space during a bear market.

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BOE Deputy Governor Jon Cunliffe told Bloomberg on June 22 that crypto companies 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. There is room for huge efficiencies and changes in market structure. .

Meanwhile, Salvadoran President Nayib Bukele addressed the Bitcoin world on June 19 about the BTC price crash. He tweeted that people should “stop staring at the chart and enjoy life” as he is confident prices will recover.

President Bukele has been criticized for investing in cryptocurrency and suffering tens of millions in losses so far, but Finance Minister Alejandro Zelaya argued that these were not losses “because we did not sell the parts”.

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At the time of writing, BTC is trading at $20,386, which is 71% lower than its peak and 0.7% lower in the past 24 hours according to CoinGecko.