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Bitcoin continues to fall, following China wake-up call

Bitcoin temporarily plunged 30% on Wednesday, very close to the symbolic $ 30,000 mark, after a wake-up call in China against cryptocurrencies that adds to Elon Musk’s negative comments last week.

Around 2:15 p.m. GMT (4:15 p.m. in Paris), the main cryptocurrency lost nearly 19% to $ 35,123. Around 1:10 p.m. GMT, she had touched $ 30,016.83, a price not seen since January 28.

At that low, bitcoin was losing nearly a third of its value from the start of the week and more than half from its all-time high hit just a month ago, on April 14, at 64,869.78. dollars.

“After Tesla’s about-face, China added salt to the injury by declaring that virtual currencies should not and cannot be used in the market because they are not real currencies,” commented Fawad Razaqzada, Thinkmarkets analyst.

Cryptocurrencies “are not real currencies”, indeed estimated Wednesday several benchmark Chinese banking federations, warning against “speculation” in a country which is also preparing its own digital currency.

China was once one of the strongholds of bitcoin, the most widespread of virtual currencies.

Beijing however took a radical turn in 2019 by making cryptocurrency payments illegal in the country, accused of being an instrument in the service of “criminal activities”.

The high volatility of virtual currencies “seriously undermines the security of people’s property and disrupts the world economic order”, criticized in a joint statement the National Federation of Internet Financing, the China Banking Federation and the Payment Federation. and compensation.


Tesla’s flip-flop

Interest in cryptocurrencies around the world has indeed jumped since the end of 2020. Driven by the interest of increasingly serious investors, from institutional banks on Wall Street to certain giants of Silicon Valley, the cryptocurrency market swelled to more than $ 2.5 trillion at its peak in mid-May, according to the Coinmarketcap site, which lists nearly 10,000 cryptocurrencies.

Over the current bitcoin price, more than $ 150 billion went up in smoke on Wednesday alone. Oanda analyst Edward Moya called the sudden low point of the day a “flash crash”, those stock market dips that occur in a matter of minutes.

The market suffers all the more from being let down last week by Elon Musk, the boss of electric vehicle maker Tesla and founder of Paypal, who vehemently defended bitcoin on social networks.

After announcing at the beginning of the year that it had invested part of Tesla’s cash in bitcoin, the very media multibillionaire decided in mid-May to refuse payments in bitcoin for his electric vehicles, citing in particular the environmental risk caused by the mining bitcoin.

The Chinese regulator is not alone in worrying about the soaring cryptocurrency market: its counterparts in Europe or the United States have called on investors to be cautious, without however prohibiting transactions.

China is also accelerating preparations to launch its own virtual currency, which will be issued and supervised by the central bank.

Chinese digital currency, the future means of electronic payment on smartphones to replace coins and banknotes, could make its debut in 2022 during the Beijing Winter Olympics.

The second largest cryptocurrency, ethereum, also unscrewed on Wednesday, dropping 44% for a while. It now costs just under $ 2,500.


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