- Bitcoin’s price (BTC) fell below a long-term support level of $ 30,000 on Tuesday (June 22, 2021).
- The price of Ethererum (ETH) was also routed by over 22%
- The losses came after China’s central bank said it urged several banks and fintech firms to tighten their controls on cryptocurrency transactions
- A BTC bull believes the asset can still hit $ 100,000 per coin by the end of the year
- Meanwhile, a recent JPMorgan poll showed that nearly half of investors consider Bitcoin to be either “rat poison” or a “passing fad”.
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BTC, ETH price: what’s the latest?
Bitcoin fell below its support zone of $ 30,000 on Tuesday, a day after China’s central bank announced it had stepped up crackdown on cryptocurrency trading.
This was the lowest price level for the cryptocurrency since January of this year.
Meanwhile, Ethereum – the world’s second largest digital currency – fell as much as 22.5% in two days to a three-month low of $ 1,731.
This latest news from China also hit the stock prices of cryptocentric companies like Coinbase and Argo Blockchain, which have lost over 7% and 16% of their ratings, respectively, since Monday.
Cryptocurrencies have declined steadily over the past week despite positive forecast statements from analysts.
What caused the decline?
During a recent meeting, the People’s Bank of China (PBOC) urged several banks and payment platforms to tighten their controls on cryptocurrency transactions carried out on their channels, Reuters reported on Monday.
“The speculative trade in virtual currencies shakes the economic and financial order, creates the risks of criminal activities such as illegal asset transfers and money laundering, and endangers people’s wealth,” said a statement by the PBOC.
The PBOC had reportedly advised financial institutions like China Construction Bank, Industrial and Commercial Bank of China and Ant Group’s Alipay to conduct deeper investigations into customer accounts and freeze those involved in cryptocurrency transactions.
Authorities also closed over 90% of Bitcoin mines in the country on Sunday, according to local newspaper Global Times.
This latest development comes a month after the country’s cabinet, the State Council, announced it would tighten restrictions on bitcoin trading and mining.
In addition to warning investors against speculative crypto trading, the State Council also banned financial and payment institutions from providing cryptocurrency services.
What is the impact on Bitcoin, Ether and more?
One analyst regards the recent moves by the Chinese government as a well-known “regulatory muscle game”.
“China does this a lot,” Charles Hayter, CEO of crypto data company CryptoCompare, told CNBC.
“When China sneezes, Bitcoin catches a cold. But that muscle game is often just that – in the past eight years this story has skyrocketed at least three times. “
Wall Street strategist Tom Lee, a BTC bull, was unfazed by the recent crypto correction. He reiterated an earlier stance that Bitcoin could potentially still top $ 100,000 per token by the end of 2021.
He said that while the asset is in “a very difficult time” due to the recent spate of negative headlines he personally refers to as “noise”, it is also a “great buying opportunity” for investors looking to get into the market .
Lee believes Bitcoin could easily rebound to previous highs and even more so as it tends to make most of its profits over ten trading days a year.
That said, one in three investors polled in a recent JPMorgan survey considered cryptocurrency a “rat poison” and another 16% considered it a “passing fad”.
“Investors’ views on the future of cryptocurrency are very divided,” wrote JPMorgan analysts Marko Kolanovic and Dubravko Lakos-Bujas.
“Four out of five (81%) investors expect stricter regulations for cryptocurrencies, with almost all (95%) believing that fraud is somewhat or very widespread [the] Crypto world, ”they added.
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