Although China banned banks from dealing with cryptocurrencies in 2013, the latter’s statement reiterated that Bitcoin, Ethereum and other virtual currencies are disrupting the financial system and are used for money laundering and other crimes.
Some specialists considered that the new announcement is a prelude to a process of endless decline in the value of virtual currencies, while others expected that the Chinese Central Bank’s decision may be an obstacle that can be easily bypassed.
In the wake of the Chinese warning, the market value fell by about 130 billion dollars, and the value of Bitcoin fell to about 42,000 dollars, to eventually record a general decline of about 12 percent within 7 days, according to the “Coin MarketCap” website that specializes in analyzing this type of currencies.
The retreat continues
In addition to the decline in the market value of virtual currencies, economist Ahmed Moati says that there has been damage to the shares of cryptocurrency companies registered on a number of exchanges, following the decision of the Chinese Central Bank.
Maati adds to Sky News Arabia, that the Chinese government’s decision is of a special nature, given the solidarity of 10 Chinese government agencies in implementing it; In pursuit of the eradication of virtual currencies, he pointed out that there are prosecutions for individuals who promote this trade through social networking sites.
Despite this, the economist believes that the virtual currency market will not collapse, but he expects this market to witness an accelerated pace of rationing operations, during the coming period.
He also points out that the divergence in the positions of China and the United States on virtual currencies, while China is taking a tough stance on it, the United States is showing a less severe stance, and there are efforts to legalize it, referring to the statements of Federal Reserve Chairman, Jerome Powell, who hinted at the possibility of regulating virtual currencies. Trade virtual currencies.
Maati explains that “any legalization of virtual currencies will lead to their decline as well, given that the current situation does not give any legal cover for government intervention, which leads to extensive manipulations that raise their value,” expecting that the virtual currency market will witness a continuous decline during the coming period, in conjunction with operations rationing.
On the other hand, the head of the Egyptian Forum for Political and Strategic Studies, Rashad Abdo, says that the Chinese government’s decision is not different from the many negative news that the virtual currency market has been exposed to during the past periods, recalling Elon Musk’s tweets that affected this market remarkably.
In his statements to Sky News Arabia, Abdo indicates that the impact of the Chinese statement has already occurred, and virtual currencies have declined, but the coming period may witness another decision from a strong central bank, allowing the trading of digital currencies legally; Which could push its value up again.
The head of the Egyptian Forum for Political and Strategic Studies adds that the future of virtual currencies depends on several criteria, the most important of which are supply and demand, which is affected by negative and positive news, as is the case in the stock market completely.
Abdo says that Bitcoin in particular has several strengths, the most important of which is that it has a fixed number of units estimated at 21 million units, which is a fixed number that is not subject to manipulation.
One of the most important strengths of the Bitcoin currency is retail, as its customers can spend a small part of each unit, which expanded the scope of dealing with it, and made it easier for its holders to spend on many services.