A Chinese state-run newspaper has published an article warning that bitcoin’s price will fall to zero during the crypto market selloff. Meanwhile, financial regulators in Shenzhen have issued a new warning about cryptocurrency.
The state newspaper warns that Bitcoin will become worthless
China’s state-run Economic Daily newspaper published an article warning about bitcoin on Wednesday, according to SCMP. The nationwide newspaper is directly under the control of the Central Committee of the ruling Chinese Communist Party.
The article warned that investors should beware of the risk of bitcoin prices “heading towards zero” amid the recent crypto market selloff.
“Bitcoin is nothing more than a series of digital codes, and returns come mainly from buying low and selling high,” the paper says, adding:
In the future, when investor confidence collapses or when sovereign countries declare bitcoin illegal, it will return to its original value, which is completely worthless.
The paper describes that the lack of regulation in Western countries, such as the United States, helped create a highly leveraged market that is “full of manipulation and pseudo-technological concepts.” The article describes it as an “important external factor” that contributes to bitcoin’s volatility.
The warning from the state media reflects Beijing’s firm stance against cryptocurrency and related activities that the government has banned.
New crypto warning from Chinese regulators
Also on Tuesday, Shenzhen Financial Regulatory Bureau, Shenzhen Central Sub-branch of People’s Bank of China and Shenzhen Development and Reform Commission jointly issued a warning that investors should be wary of illegal financial activities related to crypto and how to avoid being scammed.
The warning states that virtual currency trading and speculation “sees serious danger” to the security of people’s property and breeds gambling, illegal fundraising, fraud, pyramid schemes, money laundering and other illegal and criminal activities. It also claims that they disrupt the country’s economic and financial order.
The financial authorities cited a statement published last September by China’s central bank, the People’s Bank of China (PBOC), and 10 ministries and commissions declaring that virtual currency is not legal tender and related activities are illegal financial activities.
What do you think about the state newspaper publishing a warning about bitcoin’s price falling to zero and the Chinese regulators warning about illegal crypto activities? Let us know in the comments section below.
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