An article in a Chinese state newspaper warned that bitcoin’s value could fall to zero due to the sell-off in crypto markets. Financial regulators in Shenzhen issued a new warning regarding cryptocurrency.
According to SCMP, China’s state newspaper Economic Daily published an article about bitcoin Wednesday. The Central Committee of China’s ruling Communist Party directly controls the newspaper.
Investors should be aware of the possibility of bitcoin prices “heading towards zero” in the wake of the recent sell-off in the crypto market.
The newspaper explains that Bitcoin is just a collection of digital codes. Its returns are mainly derived from selling high and buying low.
Bitcoin will soon return to its original value, even if investors lose confidence or if sovereign countries declare it illegal.
According to the newspaper, the lack of regulation in Western nations, like the United States, has led to a highly-leveraged marketplace that is “full” of manipulation and pseudotechnology concepts. This article explains that it is an “important external factor” that contributed to bitcoin’s volatility.
The state-run media warned that Beijing is against cryptocurrency and other related activities, which the government has outlawed.
Chinese Regulators Issue New Warning about Crypto
Tuesday saw the Financial Regulatory Bureau of Shenzhen and the Shenzhen Central Subbranch of China’s People’s Bank of China jointly issue a warning to investors about illegal financial activities relating crypto and how to avoid getting scammed.
It states that speculation and virtual currency trading “seriously threaten” people’s safety and encourage gambling, illegal fundraising, fraud and pyramid schemes. They also threaten the country’s financial and economic order.
Financial authorities cited a September 2013 statement by China’s People’s Bank of China (PBOC) and 10 ministries and committees declaring that virtual currencies are not legal tender and associated activities were illegal financial activities.
