After Elon Musk announced that Tesla had invested $ 1.5 billion in the purchase of Bitcoin, markets began to run through the roof and everything began to fall apart again when Musk announced that Tesla would no longer accept Bitcoin because it was harmful to the environment.
Bitcoin and other cryptocurrencies fell further on Wednesday after Chinese regulators stepped up efforts to restrict financial institutions providing cryptocurrencies.
The decline has become a hot topic for many investors – while some bitcoin enthusiasts are still convinced that cryptocurrencies are not just to stay, but that their value could rise to hundreds of thousands of dollars , others are worried that investors may be on the brink of cryptography. Some fear 2017. The recurrence of the events of November and December, when digital assets began to rise sharply, began a long-term decline and a recession that only ended around 2019-2020.
The billionaire and the CEO of Tesla have tweeted a lot about crypto, sending the price of bitcoin with less than 280 characters – but also dogecoin – up and down.
Muski’s tweets, which may not appear for his own financial gain, can have a big impact on cryptocurrency investors. They also raise questions about market strength, which can be so easily shaken, especially as retail investors increasingly accumulate in cryptocurrencies.
Musk’s tweets over the last few weeks have had a big impact on bitcoin. Last Wednesday, Musk tweeted that Tesla would no longer accept bitcoin as a payment due to environmental concerns related to its high energy consumption. As a result, the price of bitcoin fell by about 15 percent.
This raises concerns about cryptocurrencies and the markets in which they are traded.
In a joint statement issued on China Bank’s WeChat account, banking and Internet industry associations said that financial institutions should not accept cryptocurrencies as payment or provide related services.
“Recently, cryptocurrency prices have risen and fallen, and speculative trade in cryptocurrencies has revived, seriously undermining the security of people’s property and disrupting normal economic and financial order,” it said.
It added that cryptocurrency is not a real currency and should not and should not be used as a currency in the market.
This step comes now that China is preparing to adopt its digital currency. Many see the reduction of existing cryptocurrencies as an attempt to restrict competition.
The Chinese government plans to create a digital renminbi that would allow the central bank to monitor all transactions as they take place.
Henri Arslanian, global head of the cryptography industry for PwC consultants, told the Financial Times that other regulators could follow in China’s footsteps and be just as tough on cryptographic markets.
“I wouldn’t be surprised to see other regulators and policymakers do the same in the coming weeks and warn investors of the dangers of speculative trading or cryptographic market volatility,” he said.
“The reality is that we’re seeing institutional players and institutional investors keep entering this space, and it’s unlikely to slow down any time soon.”
Cryptographic money is known to fluctuate, making it almost impossible to predict long-term trends. Their volatility makes them a risky investment. You should only invest what you are willing to lose. Despite the recent crash, the start of Bitcoin in 2021 was still very strong. It is about 35 percent higher than at the beginning of the year and worth four times more than in October.