The latest statements by the Chinese authorities and the media regarding possible restrictions on mining and trading in cryptocurrencies have caused a certain stir in the market, but they are not globally able to influence the price of bitcoin, experts say.
According to the head of the Six Nines data center, Sergei Troshin, although China is the largest Asian country, it is one of the few that followed the path of bans.
“China’s decision will affect the development of cryptocurrencies locally rather than globally. These decisions cannot radically change the world’s attitude to cryptocurrencies overnight and strongly affect bitcoin in the long term, ”Troshin is convinced.
The current correction in the cryptocurrency market has followed extremely strong growth.
“In such a situation, any event can cause a butterfly effect. Recently, not one, but several events have superimposed, so you should not blame China for everything, ”he added.
The most serious blow, according to the expert, was inflicted on mining. The BTC.TOP service has already stopped providing joint mining services. The company is working to relocate capacity to North America. Mining pool Huobi began to refuse service to residents of the PRC.
“It is not yet clear what will happen to the equipment if production stops, how the capacities will be distributed around the world. China accounts for about 60% of the hash rate, and such a shake-up will definitely have a short-term impact on the price, ”explained Sergei Troshin.
As a rule, margin traders and newcomers to the market pay attention to the news noise from the Middle Kingdom, continued the founder of the STASIS stable cryptocurrency platform Grigory Klumov. Similar information attacks on digital assets have already occurred in 2014 and 2017.
“The bans will indeed lead to consequences for market participants breaking the laws in the jurisdictions where they are located. But in the long term, this will only enhance the quality of development of the cryptocurrency industry and lay the foundation for future growth in market capitalization, ”Klumov said.
The main allies of bitcoin are always time and halving, said Janis Kivkulis, lead strategist at Exante.
“Interest in the cryptocurrency market is quite cyclical, but each time it is a movement to new heights, followed by a prolonged pullback of both the price and the general excitement. Given the existing information background, as well as taking into account the obvious overheating of the market, new historical highs should be expected sooner rather than earlier, ”the expert says.
In his opinion, the recent collapse shook out the most aggressive speculators from the market. It can now touch on those who choose to use the recent flop as a time machine to shop at January 2021 prices.
“You should be prepared that the tendency of buying on a downturn will be replaced by selling on an increase. We saw the first signs of this in the inability to return above $ 60,000 in early May, ”Kivkulis said.
He called the repetition of the situation in 2014 and 2018 the most negative scenario. Then the rapid collapse was followed by a rebound, which attracted new sellers, which ended in a long disappointment.
“The worst thing for the crypto market right now is to disappoint the optimists that it could launch a new“ crypto winter ”. This time, the circle of victims will be wider, and this risks prolonging the depression in cryptocurrencies, ”the strategist of Exante suggested.
The founder of the Kuna exchange, Mikhail Chobanyan, connects news feeds from China with the upcoming launch of the digital yuan:
“There are versions that the PRC authorities want to make it an analogue of USDT for the crypto world. A sort of global CBDC. For me, this is an expected process. Everything goes according to plan”.
According to Chobanyan, the following picture perfectly illustrates the current situation:
Data: Reddit.
Also, the founder of Kuna is optimistic about the price of bitcoin.
“Even $ 30,000 per bitcoin is three to four times more than the average in 2020,” he said.
Gleb Kostarev, director of Binance in Russia and the CIS, admits that restrictive measures by China were an “unexpected blow”, but market participants do not see them as a global threat:
“Despite the volatility, large crypto investors believe that the current downturn does not indicate any fundamental shifts in the long term. It is necessary to wait for the market stabilization, which can show the further mood of its participants. ”
The founder of Credentia Stepan Gershuni on his Facebook called the attempts to link the fall of the first cryptocurrency with the statements of the PRC authorities or Elon Musk as “rather stupid”.
Among the real reasons for the correction, he identifies three:
overheating of the market;
slowdown in the growth rate (if 10% per week does not grow, then people start to get nervous and sell);
crazy volumes of margin trading and belief in the “endless native”.
Gershuni believes that these factors will influence the price of the asset in the coming months.
“In the next 3-9 months, there will be a great sale. It’s a great moment to buy your favorite cryptocurrency, ”he wrote.
He also recalled that a significant share of the entire modern DeFi market was created at an Ethereum price of $ 100. Therefore, in the coming years, he expects the appearance of “even cooler products and projects.”
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