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China Economic Daily Pours Cold Water on Bitcoin as Rally Extends

First it went through $20,000, 10 days later, it broke through $25,000, and then it broke $30,000, and now in just the first week of 2021, another major milestone has been reached as bitcoin price surpasses $40,000.

With bitcoin’s meteoric rise in price and showing no signs of abating, it is capturing greater attention from not only potential investors but also regulators.

News of bitcoin’s successes radiating beyond cryptocurrency circles has touched the nerve of Chinese regulators. China’s state media once again came out to warn people to be skeptical of bitcoin’s recent rise.

“At present, bitcoin trading is still in a gray zone. With the launch of legal digital currencies in various countries in the future, the control or suppression over cryptocurrencies will be intensified, and the investment room for bitcoin will be greatly squeezed. Lacking sovereign backing and not tied to any physical asset, bitcoin could be worthless when a sovereign state outlaws it.” Commented China Economic Daily, a political party newspaper directly under the Communist Party.

Days ago, state media People’s Daily has warned investors against leverage trading bitcoin amid the latest bull run.

Along with the warnings from media, a lot of industry insiders also remind people to be skeptical of bitcoin’s astonishing rise and to be braced for a lot of volatility, warning market could be in for steep fall after running so far and fast.

Its rapid rise invokes memories of the bloody crash on March 12. Jiang Zhuoer, founder of crypto mining pool, believed there’s a chance that a crash like that would occur again where bitcoin might jump 50% in 24 hours and warned investors to be cautious.

Bobby Lee, the founder and CEO of crypto wallet Ballet and BTC bull, also shared his prediction that a correction might be ahead. While Lee believed that after that it would rush to another peak.

After reaching an all-time high above $40,000 on Friday morning, bitcoin slid to as low as $36,618 on Bitstamp. The second largest cryptocurrency Ethereum sank more than 10% to as low as $1,064.

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